ONE EGG Scan for July 13th

Market moves higher on Friday in response to the Greece negotiations again. Will it happen? Does the market hold the gains and move higher? Volume on the move was not impressive. Gap open and drifted sideways balance of the day. Held the gain versus what happened on Thursday… Watching… Waiting… Patiently for some clarity. Bounce put short trades in stop territory. News is driving and the chop is getting worse versus better. Asia, Europe on Sunday will set the tone for the open on Monday. Let it unfold and don’t chase the high risk trades.

Result for the Daily EGG Scan: 

Potential leadership results our scans produced for today…

  • SOXS – short semiconductors are still in play and the move lower on Thursday and modest bounce on Friday?  Watching.
  • DWTI – short crude trade is back in play as the price of the commodity comes under pressure on the supply/demand side of the equation. Consolidating move higher. Stops in place.
  • VXX – Volatility was back in play on Wednesday, but this time it stuck with VXX closing at the $21.35 mark. upside in place. Buying on Friday pushed VIX lower… illustrates the lack of clarity.
  • ERY – short energy is now in wedge near the highs. Rumors/speculation that oil prices are going to move higher? hit the stops locked in the profits and now watching how this unfolds.
  • Too much chop and lack of directional trend even over two days. Let this settle and then we can develop new positions on what the outcome shows. Unless you are trading intraday the chop is way to big to deal with.

Moves of interest trailing ten days: Big rotation in place 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 gets interesting with break from the cup pattern.
  • 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.
  • SOXS – short semiconductors setting up on trend reversal. $48 entry for adding to the position worth watching. Look for how this plays out with stop at break even.
  • TECS – short side of technology showing some positive… watching for follow through. Semi’s are the weak link.
  • Looking at the 10-day scans we se little in terms of opportunity based on the chop day to day. Patience is key… the trades worthy of the risk will setup… focus on discipline and not chasing or feeling you are missing something other than a headache from banging your head against the wall.

Current EGG Position:

Volatility intraday and day-to-day is keeping us from much trading currently. It elevates the risk/reward on positions as anything can transpire overnight to disrupt the markets. Too many worries in place and for that reason we are willing to be patient. We have posted above trades that make sense, but still have not met the entry requirements relative to the EGG strategy.

This is clearly remains a news driven market which making trading a challenge. It has been challenging to hold trades and let them develop, but we have hit new highs on the NASDAQ and some leadership is showing in Financials, Healthcare and Consumer Discretionary sectors. We are essentially in an extended sideways market that is not attempting to break higher. News is driving the day to day activity. The shortened holding periods makes risk more imperative to manage. Not convinced that either side has control of the direction. Manage positions aggressively based on risk and discipline.