The market on Friday failed to find direction and ended the day lower. The SOX index held positive and again shows some weakness, but when it was all said and done it managed to hold near the 10 DMA showing some hope going forward. QQQ held above the $109 level of support and we now look to see how the new month unfolds. The negative revision to GDP at -0.7% for Q1 put investors in a negative frame of mind. Look at the facts surrounding the economy for Q1 with all the revisions in… and it is just plain ugly! Those facts are hard for investors to ignore and as time progresses the facts will eventually matter.
As we start the week we are back in cash hitting our stops on the trade in TQQQ. If the SOX can’t bail out the balance of the market this may get ugly before it gets pretty again. Thus, we start the week with a cautious outlook and more of a prove stance for the upside moves.
Result for the Daily EGG Scan:
Potential leadership results our scans produced for today…
- UWTI – crude jumps higher? Speculation? Absolutely. Watching for some confirmation… XLE was negative with crude higher showing I am not the only one with disbelief about the move in crude… watch.
- EDZ – emerging markets continue to move lower… short trade still working for now.
- SOXL – Semi’s attempt to break through resistance and offer some leadership. Less selling that the other sectors. Positive for technology. Follows through with big upside move and trade opportunity on Wednesday.
- TNA – Small caps made nice move on Wednesday… no follow through only a consolidation pattern to watch. The rebalance of the Russell 2000 didn’t help matters… watching how today unfolds.
- RUSS – short side of Russia in play with the move lower in oil prices and disruption geopolitically relative to Greece, Spain, and Emerging Markets. Continued higher on and now faces the 50 DMA as resistance?
- YCS – strong dollar send yen lower. Nice confirmation on the break higher.
- UUP – dollar making moves on the upside causing disruption. Testing the $25.50 level of resistance? Watching the dollar.
Moves of interest trailing ten days:
- DGAZ – short natural gas is running as the commodity seeks the previous lows.
- BIB – biotech at resistance and break higher is of interest.
- CURE – down trending channel? break through the upside a positive. stalling at high? Watching for continuation of upside and opportunity to add.
- SOXL – messy, but making money on the upside short term. Big follow through on the trade Wednesday and jumps to the top of the list. Held gains into the weekend…
- YCS – short yen on strong dollar working very well on the upside. Another move higher on Wednesday.
- TECL – technology jumped up the list with nice move and watching the new high opportunity despite the test lower on Friday.
- TQQQ – NASDAQ 100 winning from technology pushing the index higher. Tested lower bounced, sold into the close on Friday… looking for the bounce back.
Possible EGG Position:
- TECL – $40 with test of the move is good entry point.
- BIB – $89 with test of the move on Wednesday for entry point.
- TQQQ – $117.25 with test of the move higher for entry point.
This is clearly a traders market. Wednesday – Friday last week showed that it is not a friendly market for trends. The shortened holding periods makes risk more imperative to manage. Not convinced that either side has control of the direction. We are looking for trades only at this point and we will manage the positions more aggressively.