ONE EGG Scan for November 10th

Sectors Worthy of Attention: 

Uranium (URA) welcome to the party. With commodities gaining some favor of late and comments about building nuclear power again in Japan the price jumped more than 13% on Friday. Watch to see if it holds and if there are further upside opportunities.

Energy (XLE) is still reacting to oil with the price now just above the $78 level. The stocks moved back through the $87 level and offered a short term trade on the other models. This is still a sector of uncertainty, but for now it continues to show positive momentum. ETFs to Watch: USO, XOP, OIH, IEO, ERX.

Basic Materials (XLB) commodities, and the energy sector have been a weight on the sector, but it setting up technically to break higher if the both of these sectors can lend just a small helping hand. ETFs to Watch: XLB – move above $48.50. Hit the entry point on Friday. 

Natural Gas adds to the upside bounce off the lows in the commodity and creating a trade opportunity on the upside. No resistance to speak of at the $22.30 mark for UNG as it jumped 4.2% Thursday and tested the move on Friday, but held up well. FCG responded on Friday with a solid 5% gain. ETFs to Watch: BOIL, UGAZ, FCG, UNG

Consumer Discretionary/Retail tested lower to start the week, but is holding up and in position to break higher and take on a leadership role into the year end holidays. A move through the $68 level on XLY is of interest to the upside catalyst. XRT is of interest as well with move above the $90 level.

China was attempting to reverse off the recent lows, but the economic data keeps stalling the starts on the upside. Double bottom pattern with a consolidation on the breakout is the current look, but that is testing lower again. Need a follow through catalyst to push the sector through resistance and maintain the move higher being attempted short term. ETFs to Watch:  Entry YINN $31.30. 

Biotech fell on Wednesday in response to the elections on belief the Republican control Senate would attempt to make changes in the Affordable healthcare bill. Reality of that happening short term is not great assuming a democratic president who passed the legislation. Could present opportunity on the selling short term. ETFs to Watch: IBB, BIB, BIS, XBI

Running the EGG Scans: Results for Thursday night…

Uranium (EFA) jumped 13% on news in the space with Japan at the center of the conversations.

Treasury bonds (TMF) yields fall and the money flow back into the sector to end the week… watching for trade opportunity if this continues.

Gold reversed course on the jobs report? At least that is the rationale for now. Gained 2.8% on Friday and watching to see if we get any follow through. GDX (gold miners) jumped 8% on the day as well with silver up 1.9%. Precious metals on the move or just a bounce?

Natural Gas (FCG) stocks jump 5% to join the commodity. This is what we were discussing earlier in the week.

Utilities (XLU) up more than 1% on the day and continues the solid upside move.

Coal (KOL) the stocks were up 1.8% on Friday and in position to continue the positive upside near term.

Commodities were the story line on Friday and the balance of the market struggled to hold the line. Watching to see how it all plays out on Monday.

Current EGG Proposed:

We are tracking these to trade on the setups and we will take the one that works for the entry. Be patient and don’t force any trades.

1)  SOXX – Semiconductors bounce back, but on Friday showed more of a rounding top than a sector ready to run higher. A test of the move on Friday could present an opportunity on the upside as we start the week of trading. Looking for test level and entry for trade on this upside momentum. IF we hold the test from Friday and make a push towards the upside we will take trade in SMH as posted on the table. You can trade SOXX as well, but for volume purposes we will use SMH.

2)  ITB – Home Construction wants to break from consolidation and looks ready to move higher. Positive news in the sector the last two weeks has been keeping the upside as a possibility. Looking for a move in ITB at $24.30. Friday opened above the entry tested and then ran to the upside as we suspected due to the positive outlook short term. We did not take the trade due to volume issues. Very thin volume on the test and could not get the fill we needed on the trade. If you took the entry manage it out based on the post. Use stop of $24.15 currently.