ONE EGG Scan for August 12th

ONE EGG Scan Results for Today:

Sellers are back. This time China offers the catalyst and it is one that should be watched closely. The back and forth is still news driven, but looking for something gain traction. Until it does we remain patient and look for the trends that are already in place with the probability of continuing. Either way focus, discipline and pateince have to be practiced or you will get smacked in the head.

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…

  • 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. Shifted gears quickly on Tuesday… watching today.
  • 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. Downside back on Tuesday. 
  • 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. Downside back on Tuesday.
  • SDOW – short side for the Dow hit the scans as well today. Watching for confirmation. Downside back on Tuesday. 
  • 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. Downside back on Tuesday. 
  • YANG – watching the downside on news again? 
  • 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. Downside back on Tuesday. 
  • EDZ – short emerging markets showing up on scan again. Downside back on Tuesday. 
  • 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. Upside back on Tuesday. 

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. Reversed on Tuesday. 
  • YANG – short China followed through upside and need to manage the risk of the trade near term. Downside back on Tuesday. 
  • 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. Downside back on Tuesday. 
  • XLU – utilities are moving off the lows and advancing. Money rotating on interest rates dropping. holding the trend on upside short term.

Current EGG Position:

The downside returned on China’s news. Need to let the last two days filter out and then look at where the opportunities exist. Patience is the key for now. Let it unfold on Wednesday. 

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.