ONE EGG Scan for October 24th

Thursday closes higher as the buyers step back in after the worries concerning the Canadian shootings. I am not sure that was the cause, but we will let the media have their say on it as today negated the day of selling anyway. Stay focused on what is working and keep your stops in place to manage your short term risk.

Running the EGG Scans

The results for Thursday revert back to the upside trades showing up. This negates the selling from Wednesday and puts the upside in control again. The ‘V’ bottom is in play and could run to the previous highs and stall. Let it play out for now.

Thursday heads higher:

Semiconductors (SOXL) Filled the gap left on the downside move tested and move up again… We still nee to clear 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.

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 gained momentum and we are back near the previous highs from September. The EGG is IYR and found more upside today. Watching as this approaches the previous highs and we will determine what to do from there.

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. The upside continues to push back towards the previous highs. Nice gain on Thursday hitting $105.50 resistance. Upside still in play.

Moves of interest today: 

Russia (RUSS) short trade returns to favor and is testing the near term highs. Looking for a break higher and potential trade on the confirmation move. (Watching… risk is high)

Biotech (BIB) broke to new high on the trading day. If this confirms looking to add s short term trade on the leveraged ETF. (added to the pattern trade list)

Crude (SCO) is the short trade in oil back? Flag pattern on the uptrend of the ETF… if we break higher look for the trade entry on the move. (added to pattern trade list)

Natural Gas (DGAZ) short trade set up for a second entry on the ETF. Cleared the July high of $5 and held on the close. Watch for this to confirm and add to the position as natural gas continues to struggle. (added to pattern trade list)

Treasury bonds (TBT) bonds move lower as stocks rally and dollar remains strong. The break above $51.80 was the entry point for a short term trade. Nice follow through today and we will adjust our stops and look for follow through. (Pattern Trade Model)

Upside Trends to Watch: 

NASDAQ 100 Index (QLD) Got the move through the next level of resistance ($113.60) and gapped higher past the target posted on Monday at $119. Attempting to take out the downtrend from the September highs. Take what the market is willing to give and put the stop at the target of $119 and see how far it runs.

Homebuilders (ITB) solid bounce and move through the $22.90 level was the initial entry point for the tradel. Boost from the home sales data on Tuesday helped. $23.80 resistance level broken on Thursday with solid move to the September high. Target is $25 for now.

Current EGG:

Traded the IYR position for the move in REITs on Monday. See table for the post. Added nice upside on Tuesday and still upside for trade short term. Traded higher on Thursday with the broad index and we raised our stop to protect the position profits. Upside remains, but a bump in interest rates may put the sector in check again.