ONE EGG Scan for October 29th

No guessing on direction today! The NASDAQ led the upside along with the Russell 2000 Small Cap index. The buyers remain willing to commit the capital to keep the trend moving to the upside. The break through resistance today is another positive for the bounce off the lows and heading towards the completion of yet another ‘V’ bottom. Tomorrow is the FOMC meeting conclusion and some words of wisdom from the Fed on direction looking forward. Promises to be fun for all.

Running the EGG Scans

S&P 500 index clears the 1970 resistance, NASDAQ jumps through 4520, Russell 2000 takes out 1120 and NASDAQ 100 takes out the 4040 mark… Next? Upside still in play.

Tuesday Makes Break Higher:

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.

NASDAQ Index (TQQQ) solid move higher through resistance and upside remains in play near term.

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

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.

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 on Tuesday and looking positive for now.

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.

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.

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. Made the move on Monday – Added as EGG and moved up nicely today.

Moves of interest today: 

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) Moved higher through resistance and to new high.

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) Bounce in crude, but not downside may not be done yet.

Natural Gas (UNG) Short trade has been working until today! The buyers stepped in and pushed the price off the lows. Clears $19.90 it would be of interest as an upside play.

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 and we will adjust our stops and look for follow through. (Pattern Trade Model) Added this on the test Friday.

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. (added to the list below as added EGG since we still have some cash available for the trade.)

Homebuilders (ITB) solid bounce and move through the $22.90 level was the initial entry point for the trade. Boost from the home sales data and housing data overall. $23.80 resistance level broken on Thursday with solid move to the September high. Target is $25 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 settled even on the day, but still moving higher. Watching as this approaches the previous highs and we will determine what to do from there.

Current EGG:

Traded the IYR position for the move in REITs on Monday. See table for the post. Added nice upside last week and still upside for trade short term. Traded higher and we keep our stop in place to protect the position profits. Upside remains, but a bump in interest rates may put the sector in check again. FOMC meeting results Wednesday.

Normally only have one EGG, but as we did not get a full position in the IYR trade willing to add the QLD breakout as a second egg going forward. Entry $125, Stop $122. Target $129. Momentum is rising in the large cap index despite the missed earnings from Amazon and Chipotle’s warnings. Patience and discipline in managing the trade. ADDED the trade on Monday as the move higher was at the entry, but staled. Made up for the move today.