The sellers stepped in to take control on Wednesday shifting the balance of power at least for now. The bigger question is will they stay in control? Based on the futures the answer is yes… they are down 0.8% currently and that will push through the next support levels and give the buyers plenty to consider. We have to manage stops to start the day and deal with the after shock as this settles. There is always opportunity in destruction… time to start looking.
Result for the Daily EGG Scan:
Dollar dump in progress… thus far is has endured and we are going to test the next level of support at $25.38 on UUP. I still believe looking forward the buck to bounce back, too much stimulus in play around the world. For now it is testing the resolve relative to the Fed interest rate and inflation talks.
SOXS – semiconductors dumped 4.9% on the day and that brought the short side into play. $12.60 entry is of interest if the sellers remain and the rotation from growth takes root.
ERX – crude is running again and this is the opportunity short term for stocks to respond. $56.30 is of interest for trade on upside.
SLV – silver is moving higher with the 50 DMA as support currently. Gold has joined the move as the dollar has declined short term. Take it for what it is with a tight stop to protect the reversal. GLD, SIL, GDX all moving higher.
RUSL – Russia moving again as the bottom reversal is holding and making upside progress. Gapped above the $22.20 trade entry, but watching how it plays today with oil up 4% pre-market.
UCO – crude oil wants to bounce on speculation? Does the trade unfold? The answer on Wednesday was YES! The futures are pointing up 4% today on oil. The $6.80 level of entry was their and now it runs… at least for a few days. Trail your stops.
TMF – treasury bonds run higher on the lack of threat for now from the rate hikes. How far do they run? Stalled for four days and watching? 50 DMA is support or stop how ever you see it currently… it is a stop for me.
DBB – base metals jump on the speculation craze in commodities. Break above $15.40 from the trading range and base is of interest. How does it follow through? Sustainable? The answer has been no, but still watching this.
BIB – biotech has been a primary leader of the market, but the current worries is stimulating rotation to commodities and global markets. Hit stops on Wednesday and now is in position to create a short trade. BIS $35.50 entry.
YINN – Tagged the stops on Wednesday…. watch for support.
Current EGG Position:
Russia (RUSL) is still of interest today for a 1/2 size position trade on the break through short term resistance. Dollar, oil and geopolitics at work. Manage the risk. $22.20 entry, don’t chase if gap open. Give open a chance and $20.40 level works.