ONE EGG Scan for March 20th

Investors return to their roots of what was happening prior to the FOMC meeting. Why? The shoe is more comfortable? They had buyers remorse? Watching how today unfolds relative to this very topic. Large caps vs Small caps? Dollar? Interest rates vs bonds? How this unfold will give the direction for where we go short term. Patience as this expiration Friday and it has been a busy week for news and events.

Result for the Daily EGG Scan: 

Leadership outlook…

So much for the dollar correction and rally in the emerging markets. Still watching, but needs to convince me there is more there than a one day news event.

BIB – biotech remains the primary leadership of the market currently. Plenty of talk about the valuations and overbought techincals, but ride the horse until it’s time to dismount.

TMF – treasury bonds run on the lack of threat for now from the rate hikes. How far do they run? Stalled Thursday and watching to lock in short term gains.

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. Nice consolidation on Thursday.

SCO – oil trade flipped on FOMC announcement. Oops, didn’t mean it! back to the downside on Thursday.

Honorable mention to Russell 2000 small cap index for resuming upside leadership… will it continue? Watch the sentiment today as we look for follow through to the Fed… good or bad.

Current EGG Position:

Wednesday I was watching Europe, Emerging Markets, S&P 500 index and NASDAQ for follow through. Didn’t get it, but we see how it goes today and what opportunity this gives heading into next week. Chasing one day events is not a good strategy, thus we let this unfold further.