ONE EGG Scan for October 21st

The buyers followed through on Monday to the Friday upside bounce and continuation of the move. Despite the news from IBM prior to the open the broad indexes managed to put together a solid move on the upside gaining 1.3% on the NASDAQ and 0.9% on the S&P 500 index. Positive start to the week and now look for the bounce to be positive to retrace off the current lows.

Running the EGG Scans

The results below from Monday was on the upside, but you still have to be aware of the micro trend being on the downside. Because our bias in the trend is lower we have to take the necessary precautions in our selections process.

Semiconductors (SOXL) moved back the high posted on Friday prior to the giveback as the day progressed. Today we closed at the highs. Now comes the challenge of getting through resistance and filling the gap left on the downside sell off.

REITs  (DRN) the REIT sector rallied on the move lower in interest rates and money rotated to safety in the sector. The follow through upside today shows momentum and we added the position in IYR this morning. Challenged by the execution on our limit order, but we will trade out the position as usual.

Healthcare (CURE) the upside in the sector rallied as the follow through steps up. Take what the market gives as this previous leaders is needed if the bounce is to continue from here.

NASDAQ 100 Index (QLD) Got the move through the next level of resistance ($113.60) and now look at target of $119.

S&P 500 index (SSO) The broad index posted a positive day on the upside and cleared resistance for the entry point at $107.60.

Homebuilders (ITB) solid bounce and move through the $22.90 level would be a breakout on the bottom reversal. Got the follow through move and trade opportunity in the ETF.

Trades hit on intraday reversals we discussed last week that still look good as we start the week:

Small Caps (TNA) the reversal off the intraday low as tradable for those willing to accept the risk. Watch for the ETF to clear the $58.90 mark for a trade higher. That happened on Thursday for the small caps. Test Friday gives a new opportunity to trade up to $65.

Semiconductors (SOXL) nice reversal off the low intraday. $77.40 was the level to clear on the upside to trade the bounce. Hit this on Thursday as well. Need momentum to continue in the sector if it is going to close the gap left on the downside move.

Biotech (IBB) solid bounce back above the 200 DMA and $257.40 is the level to clear to trade the bounce. Hit this on Thursday as well. Looking for move to go to $280.

S&P 500 Index (SPXL) the index bounced off the lows and pushed back towards the 200 DMA and that would make a good target with a $65.85 entry point on the bounce. Hit this level, but no real conviction in the move to this point.

Watch the trade setup opportunities below as well:

Natural Gas (DGAZ) joined the selling commodities as it fell back to the bottom of the range and support. More selling to break lower and the short side trade is worth out attention. UNG broke support ($20.50) setting up the downside trade. Took the downside trade short term.$4.50 entry on DGAZ is the trade. Hit on Thursday at the open last week. Nice acceleration today and looking at taking some off the trade as profit near term.

Treasury bonds (TBT) rally in the bond and the decline in the yield gives reason for concern moving forward. The break above $51.80 is the entry point for a short term trade is the bond sells short term in light of that is surrounding the move of late.

Coffee (JO) back on the list as the move higher pushed the commodity back to a topping flag pattern. A break higher would have been a continuation, but that failed on Friday and the trade to $36.50 could be on. $38.30 short entry. (hit the entry point on Monday as set up and now the target is $36.50 and then $34.

REITs (IYR) they are completing a bottom reversal and break higher. The sector sold off on fear of higher rates from the Fed, but that has actually been the opposite. Thus, the buyers are back and the upside entry looks attractive at the $71.60-72 mark. Got the entry on Monday and added as the EGG trade today.

Current EGG:

The bounce is still just a bounce in the micro trend downside. Take the trades and then look for the resistance to stall the move and a decision on direction to result from a longer term perspective. Patience is the key for any trading short term.

IF you added the QID post from last week the stop was hit on the last part at $49.50. Target hit on the post and took a 1/3 off (sold at $51) to lock in some profit. Wednesday took another 1/3 off on the move near $51.50 or higher. (sold $51.50) let the tail run and hit the stop at $49.50. Nice trade for those willing to take the risk of the trade.

Traded the IYR position for the move in REITs on Monday. See table for the post.

DRN is attractive from our scans with entry at $60.25. This hit the entry as well for the leveraged version of the sector.