ONE EGG Scan for June 15th

Some selling to end the week and keep the current market in perspective… No Direction and No Leadership. The markets have manage to drift higher with the S&P 500 index up just 2.1% for the year. As we start a new week of trading we are still looking for some definitive direction. Small and midcap sectors have held up well of late and both are in position to break higher and lead currently. The FOMC meeting this week may disrupt that as the leadership in both is coming from the regional banks and with interest rates at the heart of the meeting look for some volatility on the speculation of the outcome. Either way we approach the week with caution and with the attitude of patience. Big surprise, right? One day at a time remains the theme.

Result for the Daily EGG Scan: 

Potential leadership results our scans produced for today…

  • UNG – jumped to establish a bottom reversal trade. Hit the stop on Friday as some profit taking surfaced from buyers. Watching.
  • UCO – crude made move higher again? Watch the volatility of this move. Followed through to resistance on Wednesday. $46 stop on the move lower on Thurday.
  • DUST – short gold miners back on the list with break above the $15.20 level. watch for opportunity. Testing the move higher. Followed through nicely, but tested. Moved higher on Friday and move stop to $15.50.
  • KWEB – China internet stocks moving higher again and worth watching. Nice follow through last two days.
  • KRE – regional banks get big pop on upside move with jobs report strength. Consolidation at the highs.
  • VNM – Vietnam break higher off double bottom… needs follow through on new push higher. Nice move on Friday.

Moves of interest trailing ten days:

  • UWTI – upside in crude showing up in the 10 day scans. Watch for break above resistance in commodity.
  • EDZ – Short emerging markets. Consolidating near the highs. Stops hit. Resistance of the 200 DMA in place. Watching for this to resume the upside.
  • BIB – biotech at resistance and break higher is of interest. Consolidation at the high.
  • TMV – short treasury bonds continues to play out on the Fed threat to raise rates. Playing out nicely on the upside. Tested lower to end the week. Watch for resumption on the FOMC speculation early in the week.
  • KRE – regional banks taking on leadership role for the broader markets. Nice follow through on upside move.
  • SRS – Short REITS as interest sensitive assets still moving lower. Raise your stops on risk of this playing out short term. Tested on Thursday.
  • FAS – financials are creeping up the leaders column. banks are leading the charge.
  • Some rotation in the two week trend cycles. We want to capture the move that meet our criteria. Patience for now.

Current EGG Position:

IWM was the watch for Wednesday as the small caps have held up well in the midst of some selling in the broader indexes. Look for entry at the $124.85 level on the day. Got the move early on the day and it followed up with move higher on the day. Entry was $$125.10. Stop $123.70. Modest move on Thursday and Friday looking for the upside follow through to clear $126.53.

This is clearly a news driven market making trading a challenge. Swings trades are struggling to follow through and creating to many whips in and out. No trends or continuation of trends. Testing is the trend and it has extended into a sideways market. The week started out similar to last week… no direction near term. News is driving the day to day activity and the insecurity is showing in investor 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 the current environment.