ONE EGG Scan for August 5th

ONE EGG Scan Results for Today:

Interesting day for the markets again on Tuesday with the economic data, earnings, forecast, speculation and Apple pushing the uncertainty into a paralysis mode. Crude oil is challenging the psyche of the markets as well breaking key support on Monday and a small bounce on Tuesday, but not enough to change the psyche for now. The domino effect may be lining up for the markets near term as I stated yesterday. Watching to see how today unfolds, but willing to be patient currently.

Scan results based on the last close of the markets…

  • RUSS – oil moves lower and the selling returns. Gap higher and back near the previous high. Looking for follow through.
  • 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.
  • SPXL – the S&P 500 index upside trade offer a entry point for the brave of heart. We will continue with in our knitting of looking for the opportunity. Patience. 
  • SVXY – inverse of the VIX played out well last week. Hit the entry point $88 on the reversal and moved higher on the day. Stop at break even and watching. Complacency setting in for near term.
  • CURE – healthcare jumped back from the selling as biotech and providers both moved higher on the day. Hit the $41.75 point of interest for upside trade.
  • YANG – Followed through to the break lower. Short trade still setting up to continue near term.
  • 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 $114.80 on the bounce back.
  • DUST – the break lower for gold is a big negative for the miners. Big flag at the top… should continue higher, but watching.
  • EDZ – short emerging markets showing up on scan again.
  • 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. But, still not a believer.
  • Short side is still hanging tough as the buyers are not willing to exert much effort. Watching how this unfolds.

Moves of interest for the trailing ten days: 

  • SVXY – nice move higher as the volatility is sucked out of the market. overbought? Watching.
  • YANG – short China followed through upside and need to manage the risk of the trade near term.
  • 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.
  • 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.
  • BAB – Build America Bonds – break from the base on the upside. Interest rates are declining putting this opportunity in place.
  • TMF – treasury bonds continue to move higher as yields fall and money rotates. upside in play short term.
  • The 10-day scans are not showing much in terms of trends which only validates the short term trading cycle we are in… as well as the sideways market as seen in the charts since March. Additional parts to watch as this unfolds based on scans are RUSS, and EDZ.

Current EGG Position:

The broad indexes bounced and followed through to complete the reversal, but remain well within the trading range that has been in place since March. Still needs to show some conviction from the buyers and it needs to step up the volume. I am not a buyer on the bounce. No real leadership. Short side of some sectors are gaining momentum, but we remain cautious about the recent lack of conviction on either side. Trades are winning, but they remain random as well based on news and events. 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 upside and look to see how it start the new week.