Yellen and company decide they want to take the dollar lower and defend the buck by stepping back from rate hikes. This is like waving the green flag at the start of the Daytona 500 speedway. Game on. Today we look for the follow through to validate investors are on board with the gift and then see how far it runs. Global bounce is expected as well. Start your engines this is going to get interesting. We never assume anything, but the setup is for the next leg higher to kick in on the news.
Result for the Daily EGG Scan:
RUSL – global reprieve on the weaker dollar and stronger oil prices. Sustainability is the question moving forward for Russia… watch oil prices.
EDC – emerging markets get boost from the weaker dollar as well. Big jump and looking for follow through today.
TMF – treasury bonds run on the lack of threat for now from the rate hikes. How far do they run?
YINN – noted the reversal setup last week and it did make move with nice follow through on Monday. Big move on the FOMC meeting. Took entry for the trade on Pattern Trading Strategy. Raise stop (50 DMA) and manage risk on trade.
UCO – oil trade flipped on FOMC announcement. Question is the sustainability near term.
JNUG – gold miners were struggling as gold threatened to break the next level of support short term. FOMC announcement reversed that and now upside back? watching for follow through and conviction.
UNG – natural gas bounce? Still needs to clear the $14.50 level to be of interest for a trade upside.
Watch the sentiment today as we look for follow through to the Fed…
Current EGG Position:
Europe, Emerging Markets, S&P 500 index and NASDAQ are on watch list today for follow through. Leadership under these major components will be equally important to establish the next run… assuming it materializes. Need confirmation or test and confirmation to the response relative to the Fed announcement on Wednesday… plenty of work left to do.