ONE EGG Scan for November 4th

Flat day as investors digest the news and tread water. No big changes on the day and we head to tomorrow with the same focus in looking for a test of the move and catalyst to sustain the upside move.

Running the EGG Scans

New highs hold with the economic data in line and not real news to speak of on the day.  Take if for what it is and keep your head in the game while everyone else loses theirs. Upside runs present as much risk as downside runs create opportunity.

Friday gaps higher & No Changes on Monday:

Natural Gas (BOIL) nice bounce off the lows in the commodity and creating a trade opportunity on the upside. Watch FCG to respond as well on the move in the commodity if it holds the gains.

Short Oil (SCO) breaking from the consolidation on the downside and the short ETFs break higher.

Gold broke lower again on Friday adding to the short trade added Wednesday (GLL) in the ONLY ETF Model. Flat inside day on Monday. The real play is still in the short gold miners ETF (DUST). DUST is now up 61% in five trading days. JDST is up 76%. As equities rally on news, gold accelerates the opposite direction. Gold and silver may still have downside as the dollar hits multi-year highs.

Semiconductors (SOXL) jumped back from the selling on Thursday and followed through on Monday. Stimulus in Japan I am sure will help the profits in this sector. (kidding obviously) This is still a key leadership sector for the broad markets going forward. Attempted entry today on SMH, but will to be more patient on the buy.

Financials (FAS) we stated last night the financials were looking ready to break higher and that is what they did on Thursday. Missed the entry on the small gap at the open, but still positive more for the sector. Nice gain on Friday to add to the upside and held Monday. (yes, I should have bought it, but you still have to follow your discipline… good and bad days)

Small Caps (TNA) nice confirmation and reversal from the move lower on Wednesday. The upside remains in play and could be worth adding to the trades in the sector short term. Nice runaway gap on Friday… tested some on Monday, but manage the risk of the position now.

China (YINN) global sector getting lift from stimulus and strength in the US as ripple effect. Trade setups in these areas are growing with each event. Don’t forget this is going to be volatile, but setting up nicely short term. Nice test on Monday… watching for upside trade in the country ETF.

Stronger dollar on Fed actions (UUP). That meant rally in short yen (FCS) and short euro (EUO). Worth watching as well on the dollar rally. Multi-year high (YCS trade did well on Friday.)

Still Tracking Potential Upside Moves:

Semiconductors (SOXL) Filled the gap left on the downside move tested and move up again… We cleared the $95 resistance to move higher. How much more upside is there in the move? Only time will tell, but the upside has the bias for now. Cleared the $100 mark and tested with some convincing selling early. Watch as the upside remains in play. Upside returned Friday.

Biotech (BIB) hitting new highs as the sector follows through on the upside and is setting the pace for the broad markets. Momentum is still gaining in the sector. Still a leaders following the breakout move and upside follow through. Still moving higher, but paused at the highs.

Healthcare (CURE) the upside in the sector rallied as the follow through moves back to the previous highs. This will now be the indicator for how the market will potentially respond to reaching the previous highs. Nice gain hitting $111 and above the previous highs. Upside still in play. Not a big leader on Friday, but still adding to the upside move.

NASDAQ 100 index (QLD) in position to break through the next resistance level and worth a trade if it makes the move with momentum intact. Still like the upside momentum and bounce off the selling on Wednesday. Small gain added on Thursday.

Small Caps (TNA) lead the way higher. This was the leader off the low and it is back in that role today. Break above 1120 offered renewed entry point to trade the move higher. Some give back on Wednesday, but still upside looking positive. Nice confirmation of upside move on Thursday.

Midcap (MVV) following the small cap stocks higher after lagging the last week. Nice break higher and gave solid entry opportunity. Still positive outlook for the sector.

S&P 500 index (SPXL) upside struggled to keep up with the NASDAQ, but still showed positive move with the leadership spread across the board.

Industrials (XLI) solid move to regain some leadership for the broader market index. Second sector to push back to the previous highs along with healthcare. Look for them both to offer indication of where the broad markets are heading. Need upside follow through.

Current EGG:

FAS was the right trade… wrong entry point. I can only learn from these events not cry over them. Still opportunity on test back to the $110 level this week as a trade on the upside move. Still like the momentum and rotation in the sector and worth trading on the right setup.

SOXX – Semiconductors bounce back on Friday eludes to the strength in the sector as we have discussed in other models. A test of the move on Friday would present an attractive opportunity on the upside move. Looking for $85.50 -86 test level and entry for trade on this upside momentum. Watch how this unfolds on Tuesday.