ONE EGG Scan for July 28th

Markets turn lower for fifth day and the scans shift to downside bias. The choppy markets make it a challenge to keep any position longer than 2-4 days. We keep the scans going one day at a time and continue to take what the market gives.

We added the short S&P 500 index trade on Monday with SPXS. Took a half position on the move at the open that hit the entry point. Still need to manage this a we go forward and I do expect some volatility with the markets going forward.

Result for the Daily EGG Scan: 

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

  • YANG – Followed through to the break lower on Friday. Short trade accelerating $29.75 target and resistance short 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. Stops in place. Supply data accelerated the downside move, followed by more selling to start¬†the week.
  • RUSS – short crude trade overlapping into the Russia short trade. $34.15 entry hit on Wednesday… watching $35.30 as next entry point also hit. Continued move higher to start¬†the week. Manage your stops.
  • DUST – the break lower for gold is a big negative for the miners. The downside accelerated, but managed to bounce late on Friday? hope springs eternal for the gold bugs.¬†Bounced back near the highs on Monday keeping the downside pressure on the gold miners.¬†
  • EDZ – short emerging markets showing up on scan again. We have to watch $35.50 as the entry point? Hit the entry point on Thursday. Nice follow through on short trade.¬†Nice follow through move as well on the downside in emerging markets.¬†
  • VXX – volatility returned at least for the day on Friday. $16.80 entry level hit and watching how it unfolds to start the week. VIX back at 14.5 and watching. Added to the upside move started on Friday. Up the stop on the trade to $17.15.¬†
  • TZA – short small caps jumped on Friday… needs follow through.¬†Another solid gain¬†on the short trade.¬†
  • BIS – short biotech as the selling accelerated on Friday and impacted the small caps as well.
  • TMF – Treasury bond rallies again on the move to safety? Breaking from a double bottom on the upside? BUT, does this have an upside opportunity? This is of interest going forward.¬†Followed through as well with additional selling. Watching the downside risk.¬†

Moves of interest for the trailing ten days: 

  • YANG – short China followed through to the entry point 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. Raise your stop to $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. Watching the impact of the analyst comments on the upside for crude.
  • ERY – short energy trade continues to show positive upside trend. Crude moving lower accelerating the trade again. Continues upside trek.¬†Manage your risk of the move higher is short period to time.¬†
  • BAB – Build America Bonds – break from the base on the upside. Interest rates are declining putting this opportunity in place.
  • TZA – short small caps is building a double bottom and reversal on the move would be worth trading short term.¬†Nice follow through to the downside risk trade.¬†
  • 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.

Current EGG Position:

Volatility¬†returned to start¬†the week. Rotation away from growth started as seen in tech, small caps, retail and biotech. This put more question marks on the market and reintroduces worries and risk and… As we start the week the downside will have to validate the reversal or the buyers show up and restore the upside move. Flip-a-coin based on the data and the speculation on who will drive the direction. This puts news back in the driver seat and that is not a good thing for putting money to work or risk. Discipline is the key and thus, we will start cautious and see how the week starts. Look for clues and don’t over extend your risk relative to the volatility.