ONE EGG Scan for June 16th

Selling starts where last week ended… selling? Worries about Greece, the Fed and the economic picture. The movement shows in the scans as they fail to have much in terms of leadership making the trades for EGG strategy harder to come by. Patience remains the theme.

Today we are not expecting much with the beginning of the FOMC meeting and all the rhetoric around what they will do or not do relative to interest rates. We will know the next step on Wednesday as Chairperson Yellen explains the Feds view on the economy and other political persuasions as needed.

Expect this to be a slow day of trading and water treading as the crowd determines what they believe going forward with interest rates and the economy. One day at a time is all we can do for now.

Result for the Daily EGG Scan: 

Potential leadership results our scans produced for today…

  • UNG – (UGAZ) jumped to establish a bottom reversal trade. Hit the stop on Friday as some profit taking surfaced from buyers. Watching for reversal and entry relative to the move higher. $2.45 entry for UGAZ.
  • 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, but tested on Monday.
  • KRE – regional banks get big pop on upside move with jobs report strength. Consolidation at the highs. Testing with some volatility.
  • VNM – Vietnam break higher off double bottom… needs follow through on new push higher. Nice move on Friday.
  • YANG – short China showed up in the scans from Monday. Break higher shows the growing weakness in China. $63 entry looks good if the downside remains.
  • SIL – bottom reversal move on Monday and worth watching to see if it unfolds.
  • IHF – healthcare providers moved back to the previous highs and ready to continue the uptrend.

Moves of interest trailing ten days:

  • UGAZ – sustaining the upside has not made the list as one of the leaders with momentum.
  • 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.
  • ERY – short energy trade continues to trend higher. Uncertainty about oil prices has the sector stalled. Take it for what it is.
  • QID short the NASDAQ 100 index is showing some upside promise. Watch for follow through on the selling.

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.