The sellers stepped in to take control on Wednesday shifting the balance of power. Thursday was a weak intraday reversal, but it was enough to watch today. Buyers tried to push the indexes back into the green, but failed in the last hour to hold the move. Worries are caused by a lack clarity and that is where we find ourselves currently. You can read other posts to catch up on the worry list, but for today we watch to see how the morning unfolds and if the short side is gaining momentum. Patience as we end an interesting week of trading.
Result for the Daily EGG Scan:
Dollar dumped hist support at the support at $25.38 on UUP. Small bounce on Thursday and looking for a follow through today. Global issues have not changed and that leaves the dollar as reasonable default choice. I still believe looking forward the buck will bounce back, too much stimulus in play around the world. $25.75 level to clear moving higher. Watch the effect to commodities.
SOXS – semiconductors dumped 4.9% on Wednesday 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. Hit entry and could continue to run to $15 target.
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. The stocks are not responding to the rise in crude… many still see this as temporary move on speculation. That said DGAZ did move higher on Thursday.
UCO – crude oil wants to bounce on speculation? Does the trade unfold? The answer on Wednesday was YES! Crude moved up 4% Thursday. The $6.80 level of entry was hit (Wednesday) and now it runs… at least for a few days. Trail your stops.
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.
TMF – treasury bonds run higher on the lack of threat 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. HIT STOP on Thursday… of interest relative to rotation in play. Follow the money. TBT entry in place with confirmed move above the $42.65 mark.
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. Got a move higher on Thursday… follow through higher is of interest for trade.
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. Hit entry, but reversed into the close. Still downside opportunity on trade.
Current EGG Position:
Too much uncertainty on either side. The short side is setting up, but lacks clarity as much as the upside… Patience as we see how today unfolds. Break of the short-term trend off the October lows and short side could gain the momentum.