Crude oil data spooks the markets into the close on Friday. The major indexes sell down to support and leave plenty to question about the stability of markets short term. The emotions spiked higher with the VIX back near the 21 mark. Patience is the challenge in letting this unfold and the direction determined. Watching how today unfolds… a break of the 1992 mark on the close and it gets interesting going forward. A bounce and we remain in the current range and undecided.
Sectors to Watch:
The downside posses plenty of risk for looking forward. $198.60 is the level to watch on SPY… break and the downside may well accelerate to the $185.50 support from the October low.
SPY and support at the $198.60 mark. breaks… opens the downside trades.
QQQ and support at the $99.70 mark. breaks… adds to downside pressure.
XLK and support at $39.85 mark. breaks… leads the NASDAQ lower.
SOXX and support at $88.30 mark. breaks… leads the NASDAQ lower.
Result for the Daily EGG Scan:
VXX, USO and TZA were the leaders on Friday. Crude bounce is worth watching for follow through. Volatility may spike higher if the sellers maintain control. Small caps are at support and if the bottom falls out will take on a leadership role on the downside. Watching to see if sentiment change over the weekend and if the buyers see opportunity or they are willing to throw in the towel to the next support level? Patience.