ONE EGG Scan for April 2nd

Sellers return and the tug-o-war continues. The futures are pointing lower again today, but not too much. The headlines are 50/50 with sell and buy speculation. It is the last day before a three day weekend and I would expect it to be a quiet day. Russia, silver, China, treasury bonds, and telecom were the leaders on Wednesday. Defensive stocks and emerging markets are the sectors of choice. Watching how the US equities respond today to the modest selling and key support levels. Be patient and don’t rule out a bounce just to confuse the technicians.

Result for the Daily EGG Scan: 

Leadership outlook…

YINN – China stimulus pushed the country higher… watch this is a volatile trend, but it has moved up nicely short term. The positive PMI data is confusing investors and could get a test today.

RUSL – Russia is moving higher, but the volatility is a challenge for many. Buyers put in effort to break higher technically. Working so far on the upside.

SOXL – downside in play. Needs to clear resistance and follow through… otherwise the short side will gain the control.

DUST – Gold is holding steady, and the miners bounced back on Wednesday. NUGT was the trade as the shorts were scrambling to cover. If NUGT breaks the downtrend could shift the tide the other direction.

SPY – Support is $204.50 and a break lower is going to bring the sellers into play. I like the short trade if the break occurs with some volume favoring the sell side. SPXS.

Possible EGG Position:

No direction lasting longer than a day. SOXS, NUGT, SPXS and other show some promise, but we need to follow through otherwise we just chop around. Patience as it unfolds.

Downside trades are showing interest, but they are not ready to get engaged yet.