ONE EGG Scan for July 21st

Market continues to find optimism… test today as earnings set up in the technology sector with Apple, Microsoft and Yahoo all reporting. How they unfold short term will set the mode for the near term outlook on the NASDAQ. We are not sounding the all clear signal currently and we have plenty to deal with looking forward. Still taking it one day at a time and willing to accept what the market gives.

Result for the Daily EGG Scan: 

Potential leadership results our scans produced for today…

  • DUST – the break lower for gold is a big negative for the miners. The downside accelerated on Monday. GLD down 2.7%.
  • CURE – healthcare moving back into the uptrend and hit new highs. I continue to like this sector going forward.
  • INDL – India moves higher and broke through resistance, but now challenging the move higher. Watch and mange the risk of a trade.
  • 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. Stops in place. Analyst comments are helping build bottom in oil? The downside remains the strength for now.
  • SVXY – volatility gets taken out of the market on the buying to start the week. The index has now moved to 12.1 and posted a solid gain on the trade… overbought? raise your stops on this position if you own it. Watching for bounce in volatility… tighten stops on SVXY.
  • BIB – Biotech made gap move higher and in position to test the June high. Nice follow through on upside in play. Like the outlook
  • FAS – Financials gapped higher as well and looking for banks (KBE) to lead. Still moving higher, but bank earnings were a catalyst. Still doubt in the charts.
  • EURL – Europe broke above resistance on the bottom reversal. I like the near term at least technically.

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 to add positions and now managing the stops if it reverses at any point soon. Raise your stop to $30.
  • 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.
  • TQQQ – Nasdaq 100 index remains upside move currently hitting new highs. Earnings are driving and today will give clarity on the move with earnings.

Current EGG Position:

Volatility has evaporated near term as the upside takes control of the direction. We have posted above trades that make sense. Upside in place and the trades favor the technology sector near term. Watching how this all unfolds going forward.

This is clearly remains a news driven market which making trading a challenge. We have hit new highs on the NASDAQ and some leadership is showing in Financials, Healthcare and Consumer Discretionary sectors. We are making progress on other indexes, but it is starting to stall near term. Not convinced that either side has control of the direction, but the upside holds the momentum for now. Manage positions aggressively based on risk and discipline.