Reaction to jobs report or a reason for sellers to take action. I am going with the later. The jobs report was positive in the top line numbers, but the wealth of the jobs being created are not economically impacting. Markets are extended in price and therefore the jobs/Fed connection was a good reason to head to the exits for traders. Investors are still evaluating based on time horizons and risk. Don’t assume the selling will accelerate… let it unfold, put your stops in place and take one day at a time.
Scans are showing support lines in place and how it responds from here will determine the short term view. Longer term will take time to unfold.
Result for the Daily EGG Scan:
DUST – gold miners fall as GLD tests the $111 support. Strong dollar and rising rates don’t help gold and thus the reaction from the miners.
TLT – downside risk back for Treasury bonds. TBT or TMV short trade surged. Cup and hangle pattern off the low in position. TBT cleared the $45.50 resistance on the gap open. More upside is expected as rates rise in expectation of the Fed actions.
TAN – solar went vertical last week as it leads the sectors. The Thursday exhaustion gap could be the top as shown with the Friday move. Banking profit is prudent as we discussed last week.
BIB – biotech leadership remains, but the warning move on Friday is worthy of attention. Technically overextended on the upside, but let it run and tighten your stops and see how far it goes.
Current EGG Position:
Downside trades in SPY, QQQ, DIA or IWM could evolve depending on how today plays out. Watching to see if trades are worth risk.
Short treasury bonds is the other trade opportunity if we get a test of the move from Friday