ONE EGG Scan for August 7th

ONE EGG Scan Results for Today:

Consumer sector leads the downside along with healthcare and biotech. These are two of the key leaders for the broad market indexes and that could lead to some challenges short term should the trends break. We have to be patient, but with the jobs report out this morning that may shift the tide quicker that expected. Sentiment shifted for the day… will it continue. That is what we are watching as let this all unfold near term.

Scan results¬†based on the last close of the markets…

  • BIS – short biotech showed up on the scan today with the 8% gain helping. Biotech selling big again on the worries.
  • TZA – short side for small cap showed up in the scans as the sector continues be under downside pressure.
  • SDOW – short side for the Dow hit the scans as well today. Watching for confirmation.
  • RUSS – oil moves lower and the selling returns. Gap higher and back near the previous high. Looking for follow through. Oil still playing havoc on the ETF. Added some back to resistance at the $41.30. ¬†
  • VXX – volatility picked up on the day and watching for a follow through or reversal back to the previous low.
  • CURE – healthcare jumped back from the selling as biotech and providers both moved higher on the day. BIG reversal on Thursday and back at the bottom of the trading range.¬†
  • 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 $121¬†to give some room.
  • 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. Inching near the breakout level 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. Downside? Watching how¬†this yield move works out near term.
  • Important to note the list is not accelerating in either direction and patience is key to success in this environment.

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.
  • 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.
  • 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.¬†The selling on Thursday only serves as a reason to not pursue the upside moves… patience

Current EGG Position:

The broad indexes bounced and followed through¬†to complete the reversal on the upside last week. This week we are working as of Thursday on a reversal of the move higher in stocks. Trading range remains in play and the movement up or down is a part of the uncertainty in the markets looking forward. I am not a buyer on the reversal. We will pick and choose any trades based on the defined strategy. 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.