ONE EGG Scan for July 1st

End of the quarter… Greece and economic data on tap… followed by earnings. Some attempt at a recovery on Tuesday, but not enough to convince anyone that the buyers were back on the move. We did see some rotation to new leaders, some return from old leaders and lethargy to go with the buying. Not a bad day, not a good day, just the last day of the quarter and some window dressing for all. Today maybe we get a true response to where investors stand in relationship to the markets and willing to put money to work or take it off the table.

On the daily scan seeing where money is going short term perspective. Longer scans still looking for the leaders to resume or the sellers to rise up. Patience is still the biggest trade of all.

Result for the Daily EGG Scan: 

Potential leadership results our scans produced for today…

  • VXX – Volatility index spikes higher on the news and VIX index moves above 18 in a blink after less than a week ago hitting 12.2 on the low. Held steady in trading Tuesday, but still some issues on the table to resolve.
  • YANG – short China… this was the EGG on Friday, but the big gap was a pass on the day. We look to Monday for a better entry point. Gapped again and shows the downside risk in the country. Tested on Tuesday, but the downside momentum is still in play… watching today.
  • ERY – short energy is back on the upside was crude fades? Watch the $20.45 level to break high and possible trade. Hit the entry and retraced on Friday… Followed through on Monday and tested Tuesday. Stops at the $20.50 mark.
  • TLT – Treasury bonds jumped on the decline in yields… temporary my view… still like the downside and this move gives better entry points on TMV or TBT trades. Put the trade in the short side in motion today if follows through on the selling.
  • EDZ – short emerging markets is back on the table with bottom reversal last two days. 31.75 possible trade entry point. Definitely has played out on the short side. Resistance at the $33.50 level… watching the move on the day.
  • DBA – nice break to the upside as agg commodities start moving upside? another follow through day on Tuesday.
  • SPXS – Short S&P 500 index showed on list with the selling below first level support on Monday.
  • SDOW – Short Dow Jones Industrial – showed on list with the selling below support and key moving averages. Watching for confirm.

Moves of interest trailing ten days: Big rotation in place near term.

  • DBA – jumped to the top of the list as other leaders lose their gains.
  • REK – short real estate. negative for awhile and continues to show weakness.
  • WEAT – wheat is running higher and created short term opportunity with move higher.
  • SOXS – short relative to the semiconductors selling lower. $48 entry for adding to the position worth watching.
  • INDL – India making another attempt to break higher. $20.75 entry point or speculation for lower entry.
  • DUST – short gold miners continues to show interest on upside. Gold back at $1172 per ounce…
  • Balance are regrouping relative to leadership currently as a result of the selling on Monday. The move was enough to shift the table relative to the longer term views of the markets.

Current EGG Position:

Downside risk is still in place as investors decide which side offers the better opportunity to trend near term. Still looking at the scan result for direction and we continue to see high risk opportunities, but prefer to be patient for the near term and let it all unfold.

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.