ONE EGG Scan for October 6th

The broad indexes bounced on Friday as oversold conditions invite the buyers to attempt to put a happy face on a market that remains without direction. The jobs report did not disappoint, but that was hardly the catalyst to bump markets higher, however it did give a reason for the buyers wanting to put money to work to step in and buy. How long term are those buyers? That is the key question as we start a new trading week. Jury is still out and we will be patient enough to let this unfold to start the week.

Running the EGG Scans – First the daily winners/losers…

Watching the Monday morning futures for some indication on investors view to star the week.

Gold miners (DUST) as we stated the downside bias remains in play. the short trade is trending higher if you are willing to accept the risk of the trade. Treading water the last two days as gold holds steady, but Friday fell 4.5% and gold fell 1.8% showing more weakness and hitting support at $114.60 on GLD. Definitely oversold, but no support seems good a this point.

Crude Oil (DTO) was looking like it wanted to go higher, but reversed big on the day to lead the downside charge in price moving back below $90 barrel. Volatility making it tough to trade. Not interested in the volatility of pricing. Big daily swings are good for day trading.

Natural Gas (UGAZ) back on the upside after a couple of days of selling. Again a volatility issue inside a tight trading range.

Financials (FAS) back on the upside gaining on Friday’s rally. Watching to see how it moves from here.

Biotech (IBB) back n the upside again Friday after couple of days of selling. Watch the move going forward.

Treasury bonds (TMF) reversed the buying on Friday following some selling on Thursday (TBT rose 1.7%). The ECB provided a reason for bonds to test lower again, but we expect more volatility on both the up and downside of interest rates.

Downside still worth our attention: 

VIX index declined to 14.5 and watching if this continues to start the week. Rally on?

Energy (XLE) still trekking lower on crude oil back below $90 mark.

Healthcare (XLV) broke support at the $63.50 level and tested lower. Will it now follow through on the bounce short term?

DSLV – Short Silver ETF steadily climbing as the commodity falls in price.$60 stop is advisable on the vertical move now.

Current EGG:

Intraday reversal on Thursday still in play on the bounce Friday. The futures are trading higher pre-market Monday and this could follow through on move higher into earnings and then sell. Speculation is not a strategy and we look for some confirmation today on direction as the scans all reversed on the move Friday. Watching for good entry signals versus speculating on news.