ONE EGG Scan for April 20th

Global selling of stocks in light of reality? Not likely, just a day of the stars aligning and those with profits taking them as they headed into the weekend. China got the blame somehow for allowing short selling on stocks? I am sure the economic data from around the world had nothing to do with it. Thus, we start the week looking for answers to Friday. Follow through on the selling or bounce? The futures are pointing to bounce on the announced cuts in China bank’s reserves being lowered. Again it is all about China? Be patient and watch how the first 30-60 minutes of trading unfold.

Result for the Daily EGG Scan: 

Leadership outlook…

Short trades came into view on Friday with the drop in the major indexes. They all rose to the top of the daily list, but the sellers are going to have to confirm there a definitive shift in momentum and sentiment. SDOW, SQQQ, SOXS, TECS, FAZ were all on the top of the list. The rotation to bonds TMF was in place on Friday as well. Watching to see how they unfold to start the week. This is also the biggest week of earnings announcements and they will have some input as well. Patience as it all plays out and defines our next actions.

YINN РChina fell more than 4% Friday. Still a leader on the scans, but watching how today unfolds. Booked some gains on Thursday, adjust stops higher and watching (hit our stops and willing to buy back if moves positive).

RUSL РRussia fell hard on Friday as well. Hit support at $27.87. Upside is still in play, but the volatility is back on the worries. Took some profits last week and hit our stops on Friday. Trade upside if bounce holds.

EDC – Emerging markets have benefited from the positive global money rotation. The negatives on Friday tested $28.25 support and held. Remains above the 200 DMA. Raise stops to $27.25 and watch.

ERX РEnergy is trying to push higher, but the volatility in crude oil is keeping the progress slow and steady. Early selling on Friday was in reaction to the broad markets. Trend off the March low still in play and $66 the target hit on the trade Wednesday (booked some profit). $62.50 stop in place.

Watching this week: Short trade if it unfolds. SOXS, SQQQ, SDOW. If we bounce the shift is back to watch was trading on Thursday (see above).

Possible EGG Position:

ERX hit target at $66 and watching. Tested and looking for opportunity to add.

OIH hit entry and added solid gain on Wednesday. Test of $36.50 support is of interest to add position.