ONE EGG Scan for July 7th

Short side trades are starting to dominate the scans as the sellers take control based on the emotions of Greece and other worries. I am not convinced the downside risk is as great as published in the headlines, but we do have to respect the moves in progress. Semiconductors, S&P 500 and the NASDAQ 100 all show weakness that is pushing the technical data towards negative territory for short term trading. That is what this strategy is based on… thus, we are looking at the short side trades, but we have to be aggressive in managing the risk of the trades.

Does the selling resume today? That is the big question as we move towards the open.


Result for the Daily EGG Scan: 

Potential leadership results our scans produced for today…

  • VXX – Volatility was back in play on Thursday and looking at more based on the outcome and reaction to the Greek vote. hit the entry point at the $20.60 mark.
  • XLU – Utilities bounced off the low? any upside for the sector despite interest rates? Big question mark going forward. Held the move higher to start the week…
  • ERY – short energy is back on the upside with crude selling to the bottom of the range. Watch the $20.45 level to break high and possible trade. Hit the entry and retraced, but has played out nicely on the downside trade. Stops at the $21.50 mark. Still looks positive.
  • DBA – nice break to the upside as agg commodities start moving upside? another follow through on upside.
  • SPXS – Short S&P 500 index showed on list with the selling below first level support on Monday. Still setting up currently. Setting up for the move lower?
  • QID – Short NASDAQ 100 index. bear flag on index and sets up a potential short trade as the tech sector weighs on the index.
  • 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.

  • SQQQ – short trade on the NASDAQ is setting up. see above.
  • DBA – jumped to the top of the list as other leaders lose their gains. JJG leading.
  • WEAT – wheat is running higher and created short term opportunity with move higher.
  • SOXS – short semiconductors setting up on trend reversal. $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.
  • TECS – short side of technology showing some positive… watching for follow through.
  • TZA – short small caps setting up as well with bottom reversal and break above the $9.85 level worth trading.

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. Short side could establish a foot hold if the downside continues this week.

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.