ONE EGG Scan for July 31st

ONE EGG Scan Results for Today:

Another positive day for the markets, but it still lacks conviction on the move. It did post green numbers and the NASDAQ moved above the previous support levels and remains a positive overall. But… you knew it was coming, there needs to be some level confidence in the markets to trade if we are going to put our money at risk. I am willing to remain patient for now and see where the opportunities unfold going forward. More below on what opportunities are lining up.

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

  • FAS – financials were back on the upside trek and show some promise with the move above the $34.50 level again on Wednesday.¬†held the move and remains positive… $34.75 entry level to hold.¬†
  • SPXL – the S&P 500 index upside trade offer a entry point for the brave of heart. We will continue with in our knitting of looking for the opportunity. Patience.¬†Held and that is the best we can say.¬†
  • SVXY – inverse of the VIX played out well on Tuesday. hit the entry point $88 on the reversal and moved higher on the day. Stop at break even and watching.¬†Wants to break higher, but the VIX would have to break support on the downside? Watching.¬†
  • CURE – healthcare jumped back from the selling as biotech and providers both moved higher on the day. $41.75 point of interest for upside trade.
  • YANG – Followed through to the break lower. Short trade¬†tested and stop at $86.55. Hit the stop, but the downside risk of China remains of interest moving forward.¬†short trade still possibility… watching.¬†
  • 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 $114.80. Another short trade that hit the stop, but the worst of this is not likely done… we will continue to watch how it unfolds.¬†Some selling in crude with dollar on upside. Watching.¬†
  • 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. Selling returned, but holding up it the pennant pattern. ¬†Big move as gold struggled against stronger dollar. Nice gain and manage the risk of the trades.¬†
  • 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.¬†Tested lower on Tuesday… stop at $39.¬†Stop hit as rally in the EEM upside.¬†¬†Stronger dollar my put the short trade back in play again.¬†
  • 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. TBT still entry at $46.60 on yield rising.¬†Yields fell on the day? Bonds still finding buyers as global story remains bleak. patience on short side trade.¬†
  • Others moves on the scan worthy of watching today: RUSS – back on short side with slide in crude. TMF, bond moving higher. TQQQ – index moved above key level on Thursday. XLU – break through resistance. INDL – nice move on upside… watch and see.

Moves of interest for the trailing ten days: 

  • SVXY – nice move higher as the volatility is sucked out of the market. overbought? Watching.
  • YANG – short China followed through upside¬†and need to manage the risk of the trade near term. Tested on Tuesday and moved lower on Wednesday. Trend is still upside¬†watching for the sellers to return.¬†
  • 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. Stop at¬†$31. Nice gain on Thursday to extend the gains.
  • 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.¬†More buying on Wednesday triggers stops on the short oil trades. Watching to see how it unfolds near term.¬†Dollar could bring back the sellers.¬†
  • TZA – short small caps is retracing as well… double bottom setup, but failed on the breakout. Watching as opportunity.¬†Reversed off low, but lacks conviction still watching the downside risk.¬†
  • BAB – Build America Bonds – break from the base on the upside. Interest rates are declining putting this opportunity in place.
  • 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. This reversal puts even the short term ten day outlook in limbo. Transition put the previous sellers on top and we have to let it all unfold.

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.

The broad indexes bounced and followed through again on Thursday. Still needs to show some¬†conviction from the buyers and it needs to step up. I am not a buyer on the bounce. No real leadership. Biotech did bounce nicely off the near term support, but still want to see the push from the buyers. Herein lies the issues with the current cycle… by the time we get some conviction or momentum in a direction… the opposite side steps in to reverse whatever good was done relative to the trend. Thus, remain patient and let this all unfold going forward.¬†Friday ends the trading week… use caution on adding any positions.¬†