ONE EGG Scan Results for Today:
Buyers are back. It is like it is almost on cue as either side gains control the other finds a reason to step in. The Fed did the honors once again with the interest rate chatter. At some point investors are going to treat this like the little boy who cried wolf. The gains stuck on the day. I thought maybe it would fade since it is all speculation about timing of when the Fed hikes rates. Be like Nike and JUST DO IT! Pull the band-aide off!
Patience is still a trade of choice… need to define direction. RED denotes the changes for today.
Scan results based on the last close of the markets…
- DBA – soft commodities moving higher. WEAT, SOYB, JO, CORN all reversed off the lows and look positive near term. JO broke the downtrend offered entry at the $21.70 level.
- EURL – Europe broke downtrend off the May high and showed positive moves near term. EWI – Italy added to the upside with solid technical breakout. EWQ – France has been leading. Watch EWG – Germany needs to participate on the upside move.
- BIS – short biotech showed up on the scan with the 8% gaing. Biotech selling big again on the worries. Added to the downside on Friday. Biotech bounced Monday… watch for the reversal to negate the short trade.
- TZA – short side for small cap showed up in the scans as the sector continues be under downside pressure. Hit the $10.45 entry mark. Reversal negates the short side trade. $10.25 break….
- SDOW – short side for the Dow hit the scans as well today. Watching for confirmation. Big reversal on Fed Monday.
- RUSS – oil moves lower and the selling returns. Gap higher and back near the previous high. Looking for follow through. Testing at the resistance levels. $42.35 needs to get through. Watching the test. Big reversal on Fed Monday.
- YINN – China reversed from the consolidation on the upside. Watching. Follow through?
- DWTI – short crude trade remains in play as the price of the commodity remains under pressure on the supply/demand side of the equation not equaling out. Stops in place $138.
- EDZ – short emerging markets showing up on scan again. Reversing, but uptrend still in place. Break and long side becomes of interest.
- TMF – Treasury bond rallies again on the move to safety? Breaking from a double bottom on the upside? Bring the Fed into question and the upside is realistic. Watch the downside risk as yield rise again.
Moves of interest for the trailing ten days:
- FAS – financials were back on the upside trek and show some promise with the move above the $34.50 level again. However they have stalled, but still looking positive on test. upside follow through? sustainable?
- SVXY – nice move higher as the volatility is sucked out of the market. Upside back in play on Monday.
- YANG – short China followed through upside and need to manage the risk of the trade near term. Reversed and looking for follow through reversal.
- DUST – short gold miners have been trending higher since the lows in June. It has some chop, but still worth the risk. Close above $21.50 to add positions and now managing the stops if it reverses at any point soon. Stop at $31. Reversed and looking for follow through reversal.
- DWTI – short oil is now in a flag pattern consolidating the gains. A continuation is worth trading, but plenty of news/speculation on oil rallying? Caution on the commodity is a must. Downside back in play and upside continues to move. Reversed and looking for follow through reversal.
- XLU – utilities are moving off the lows and advancing. Money rotating on interest rates dropping. Stalled on Monday… watchin interest rate impact going forward.
Current EGG Position:
As stated below the reversal on the downside was put in place and Monday shifted that again with the solid move higher on the Fed speculation. Negates the short trades and setups. Now the reversals are in place and based on the move Monday it will take some news to dislodge the hope relative to the Fed. Patience today as we see who wins on the trading day. Speculation reigns supreme.
The broad indexes bounced and followed through to complete the reversal on the upside. That lasted about a week and now the reversal is heading the other direction. Trading range remains in play and the movement up or down is a part of the uncertainty in the markets looking forward. The short side offers more interest this time as the sentiment is shifting. The rotation is kicking the leaders lower as well this time. If they break trends or support it would be a additive catalyst on the downside for the broad markets. Herein lies the issues with the current cycle… by the time we get some conviction or momentum in a direction… the opposite side steps in to reverse whatever good was done relative to the trend. Thus, remain patient and let this all unfold going forward. We ended the trading week on the downside and look to see how it start the new week.