ONE EGG Scan for July 15th

As stated in the Research Notes, I am traveling today to the west coast and thus, the update done prior to the close. Thus, watch to see how it finished the and compare the notes. See on Thursday…

Result for the Daily EGG Scan: 

Potential leadership results our scans produced for today…

  • CURE – healthcare moving back into the uptrend. I like this sector going forward.
  • SOXL – not a leader on the scan, but the reversal is in place and looking for a follow through on the upside.
  • 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. Analyst comments are helping build bottom in oil? Watching to see if the upside finds any legs.
  • SVXY – volatility gets taken out of the market on the buying to start the week. nice follow through on Tuesday with the VIX back near the 13 mark.
  • UNG – positive move in natural gas and could setup a upside trade short term. No upside follow through, but held the gains… watch.
  • BIB – Biotech made gap move higher and in position to test the June high. Nice follow through on Tuesday upside in play.
  • FAS – Financials gapped higher as well and looking for banks (KBE) to lead. Still moving higher, but bank earnings were not much of a catalyst???
  • TNA – Small caps made follow through move to the start upside on Friday. Nice follow through this week and looking for the sector to regain leadership.
  • Momentum is rising relative to the recent bounce on Greece. Need the fundamentals and data to take over is we are going to push through the June highs.

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. Watching the impact of the analyst comments on the upside for crude.
  • VNM – Vietnam moving back to the previous high and looking for the upside indicators. Nice follow through on Tuesday.
  • FXP – short China trade is fading with the bounce… watching how it unfolds.
  • Looking at the 10-day scans we see little in terms of opportunity based on the chop the seven day downside move is now being counteracted by the three days of buying? Patience is key… upside is shifting the bias back to the buyers or upside trades. This is exactly the issue we discussed above… too much movement to trade any conviction moves. Still patiently watching for the decisions on either side.

Current EGG Position:

Volatility 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. Greece is only one worry to be resolved… there are others, not the least of which is earnings and fundamentals. We have posted above trades that make sense, but still have not met the entry requirements relative to the EGG strategy. Three positive days helps restore some confidence and we will watch how this unfolds going forward.

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.