ONE EGG Scan for November 11th

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. Followed through on Monday with a 8% gain. Now that is a reversal. Thanks to the comments from Japan about restarting their nuclear energy fleet. CCJ is the company who announced the plans for the 48 reactors in Japan. There are only 11 stocks in the ETF fairly easy to scan.

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. That was Friday and today the price of oil fell, worries returned as Saudi Arabia made statements to not worry about prices… plenty of supply. This took the speculation out of the markets relative to China’s rise in imports of oil last month. Uncertainty is still a challenge for any trades in the sector.¬†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 Рmove 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. MONDAY… tested the 22.30 level again as support? Watch for a reversal back into the trading range and negative for the break higher. FCG responded on Friday with a solid 5% gain. Gave up 3.5% on Monday. Welcome to the volatility. 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. Monday was rocky start, but managed to push back towards the high of the day.

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 Welcome back to the upside which stalled the rolling top developing. Watch for consolidation or further upside.

SOXX РSemiconductors 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. (Monday started higher and held the move. Still no trade as unwilling to chase in the tight range.)

Running the Daily EGG Scans: 

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

Volatility index (VIX) fell below 13 to 12.6 and moving towards the previous lows near the 10 mark. SVXY was the upside leader to short the VIX index.

Gold reversed course on the jobs report? 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? What happened? DUST was the leader on Monday? Up 18% as the minders (GDX) declined 6%. Gold down 2.2% and silver off 1.1%. Easy come, easy go! Watch to see how this unfolds the later part of the week. 

Biotech (IBB) return to the leadership list on positive gains Monday. Stopped the rolling top and put the upside consolidation back in play short term.

Healthcare (CURE) back on the list following a test lower in the sector.

Natural Gas (FCG) stocks jump 5% to join the commodity on Friday. Tested lower today and back in the consolidation pattern. Patience as this unfolds, but still upside opportunity in the sector short term.

Utilities (XLU) followed up on the gains from Friday and pushed back to the previous high.

Energy (DUG) downside is the winner today as the sellers stepped into the price of crude taking it lower following the positive news from Main land China’s rise in imports for oil? Dollar stronger offset the news along with comments from Saudi Arabia stating not to fret over supply or price. Pulled the speculation rug out from under the price of oil.

Back and forth on the leadership, but still lacking a leadership move without excess risk.

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)  ITB РHome 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.

2)  YINN РChina 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. Solid economic data from China on Monday put this back on the radar and added a 1/2 position. ETFs to Watch:  Entry YINN $30.70 or FXI entry $39.50. ADDED see table