EGG Scan for September 5th

A intraday chart of the S&P 500 index shows the current chop in the market and how neither side seems to be willing to take control of the direction currently. Moving up nearly 11 points early the index gave back the gain and continued to fall an additional 8 points before closing down 3 points on the day at 1997. How do your read the short term indicators for the broad index? Answer… you don’t. We just have to be patient currently and let this unfold. As I stated in the video update last night there is a topping pattern in play that could produce a test of the 1985 level, but anything beyond that is going to take a catalyst of some kind. I believe it is best to be patient, manage the risk of our current positions and let this unfold one day at a time.

Running the EGG Scans – First the daily winners…

It is still all about the news and from my view that is not the best environment to test direction or attempt to track any type of trend. There is a level of uncertainty in the markets currently and that is a challenge and rationale for the choppy events.

Russia Long (RUSL) up 17.6% on Wednesday and down 3.9% on Thursday. That puts us just 10.6% below the high from August. I stated that I didn’t expect the upside to hold as the lack of clarity in the announcements were a concern. The news driven country remains difficult to trade.

Natural Gas (DGAZ) was doing well on the upside and gets rocked by the worries relative to demand in light of the economic data on Tuesday in Europe and China. We did follow up on the short trade setup with a follow through on the upside for DGAZ, but still a news game no fundamental data to validate at this time. Leader on the downside Wednesday and lower on Thursday. High risk trade.

Energy (ERY) reacted to the selling in commodities Tuesday and bounced back on the Russia news. This is developing a trend of worry on the charts and the downside trade opportunity if this follow through. Energy commodities are impacting the stocks short term.

Gold miners (DUST) as gold creeps lower the miners broke support on the downside today and the short trade accelerated higher to break on the upside. If gold is to continue on the downside this could get ugly quickly.

Solar (TAN) the upside has returned with the sector continuing to accelerate. Couldn’t hold the move above $45 and that is the next level to watch on the upside.

China (YINN) continued the bounce back and broke above the consolidation range near the highs. FXI was up 1.2% to add to the 3.3% gain on Wednesday. All is well in the country… right? Not really, but the momentum is in the chart and the uptrend remains in play. Watch for a test of the upside move.

Still interesting: 

Biotech (XBI) Still in a short term uptrend with plenty of volatility along the way. A test of the $158 support is in motion. Watching to see how this progresses moving forward.

Financials (XLF or FAS) held the upside with the short term uptrend in play. The test of the $23 level could take place and if it holds would be of interest short term.

Brazil (EWZ) solid break from the trading range and move higher. The country is giving the emerging markets a lift overall. Watch for the opportunities in the specific country ETFs. Small test of Thursday…

Latin America (ILF) more focus on the emerging market growth. Positive upside and break higher. Got small test on Thursday…

Utilities (XLU) tested lower on Tuesday after hitting resistance and reacting to the selling in the bond sector on higher yields. Could test lower if the yield issues persist. Move above $43.25 on upside is goal.

Current EGG:

NO EGG in play currently.