ONE EGG Scan for November 5th

Candlestick doji’s for everyone. With the selling early some buying off support and a close near the open you create these candles. The question is relative direction tomorrow. More upside or more testing on the downside? The follow up to this candle determines short term direction? We will see it follows true to form and gives us some short term indication.

Running the EGG Scans

No real change other than the intraday movement. Thus, we remain patient to see how it unfolds.

Friday gaps higher & No Changes on Monday:

Natural Gas (BOIL/UGAZ) nice bounce off the lows in the commodity and creating a trade opportunity on the upside. Another gain on Tuesday with UNG up 2.3% for the commodity. Watch FCG to respond as well on the move in the commodity if it holds the gains.

Short Oil (SCO) breaking from the consolidation on the downside and the short ETFs break higher. Followed through on the Saudi Arabia news to cut prices to the US. Price war in crude? Worth watching as target shifts to $75 per barrel near term.

Gold has traded flat the last two days and the miners were higher on Monday… didn’t last as the sellers were back today to take back the gains.

Semiconductors (SOXL) jumped back from the selling on Thursday and followed through on Monday. Stimulus in Japan I am sure will help the profits in this sector. (kidding obviously) This is still a key leadership sector for the broad markets going forward. Hit entry price among selling intraday… passed, but watching.

Financials (FAS) we stated last night the financials were looking ready to break higher and that is what they did on Thursday. Missed the entry on the small gap at the open, but still positive more for the sector. Nice gain on Friday to add to the upside and held Monday. (yes, I should have bought it, but you still have to follow your discipline… good and bad days) Holding the move watch for follow through tomorrow.

China (YINN) global sector getting lift from stimulus and strength in the US as ripple effect. Trade setups in these areas are growing with each event. Don’t forget this is going to be volatile, but setting up nicely short term. Nice test on Monday… watching for upside trade in the country ETF. Entry $31.30 on Wednesday? 

Russia (RUSS) another day of the sellers controlling the trading direction on the country ETF.

Still Tracking Potential Upside Moves:

Semiconductors (SOXL) Filled the gap left on the downside move tested and move up again… We cleared 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. Upside returned Friday and continued this week with small test today.

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. Paused at the highs on Friday and we continue to test the move for now. Watching $115 support.

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. Not a big leader last few days, but remains positive.

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. Testing at the highs, but the tech sector remains a primary leaders for the markets.

Small Caps (TNA) lead the way higher. This was the leader off the low and it is back in that role today. Break above $66 offered renewed entry point to trade the move higher. Some give back along the way, but still upside looking positive. Patience and stop management is the key to holding the position.

Midcap (MVV) Following through on the move through the $66 level and target of $72.50 near term. Patience as it unfolds.

S&P 500 index (SPXL) moved all the way back to the previous high as the index methodically added on the move higher. Still showed positive upside 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.

Current EGG:

SOXX – Semiconductors bounce back on Friday eludes to the strength in the sector as we have discussed in other models. A test of the move on Friday would present an attractive opportunity on the upside move. Looking for $85.50 -86 test level and entry for trade on this upside momentum. Watch how this unfolds on Wednesday.