It’s Friday already and the market found a way to bounce… right or wrong the dollar is getting credit for the moves this week. Next week I am going out on a limb and saying the Fed will get the blame or credit for something. Regardless, the trendline was in play and it bounced… much more than I would have believed and as a result we hit the stop on SDS as the EGG. Not what I was looking for, but we have to go with the discipline that brought us to the dance. Today we end the week looking for a confirmation signal… up or down. Follow through on the buying from Thursday or return the selling from earlier in the week… thus, we will be patient and let the day unfold.
Leadership shift back to financials on Thursday and they could be the winner with small caps if this bounce finds strength and sustainability short term.
Result for the Daily EGG Scan:
YANG – China bear fund moving higher as economic data validates issues with economic growth. That aside the bounce off support on Thursday helped and overnight China was up slightly. This puts YINN on the watch list if the bounce follows through today?
ERY – Short energy sector as the price of crude fails to hold any move on the upside. Short oil trade is driving this again as crude test $46 today. More downside still expected near term.
DTO – short oil trade broke through resistance at the $100 mark and created trade as we stated this week. Watching the price of crude on downside short term as it breaks support and looks to retest the January lows. Manage your risk with stops and let it run for now.
Treasury bond bounce Tuesday is worth watching as well. TMF followed through on Wednesday as money rotated again to safety. Stop to break even and see what happens short term.
Hit entry on IWM as small caps made nice move on Wednesday and Thursday versus other indexes. Mid caps as well (IJH).
Watch the bounce today and see if the sellers come back?
Current EGG Position:
Watching as the chop is not helping our strategy for the EGG selection. Patient for now.