ONE EGG Scan for November 6th

Sectors Worthy of Attention: 

Energy (XLE) is still reacting to oil (USO) as prices on the commodity climbed back above the $77 mark on Wednesday and we watch to see what the future holds for the commodity. Oil is off the newly minted low from Tuesday and the future of pricing has not gained any near term clarity only speculation on consumption, demand and outlook. USO moved off the near term lows and working on a bottom reversal? ETFs to Watch: USO, XOP, OIH, IEO.

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

Natural Gas adds to the upside bounce off the lows in the commodity and creating a trade opportunity on the upside. Look for some resistance at the $22.30 mark for UNG. Watch FCG to respond as well on the move in the commodity if it holds the gains. ETFs to Watch: BOIL, UGAZ, FCG, UNG

China is 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. 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. 

Running the EGG Scans: Results for Wednesday night…

Gold broke lower losing 1.8% and confirming again the downside pressure on the metal. Silver was down 3.4%. Miners off 3.2% and junior miners 5.4%. After a couple of flat trading days the sellers stepped back in to push it lower. 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. Short trade in GLL is still working well.

Natural Gas (BOIL/UGAZ) nice bounce off the lows in the commodity and creating a trade opportunity on the upside. Another gain on Wednesday with UNG up and pushing back near resistance at the $22.30. 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.

Financials (FAS) we stated the financials were looking ready to break higher and that is what they did last week. 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.

Current EGG:

1)  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. No real test to speak of and holding near the highs of consolidation.

2)  Very little not showing highs or topping. Need to exercise patience for now.