ONE EGG Scan for October 9th

The broad indexes really liked the FOMC minutes as it agreed with their thinking about delaying the hike in rates for 2015 to mid-year or later. That qualifies as an ‘event’ and events trump ‘news’. Europe and China’s weaker economic data was a news event since the fundamentals have been priced into both stock markets. Bounced off the 1926 support on the S&P 500 index and produced another intraday reversal and bounced back to the previous resistance. This could last short term and test the 1985 mark on the index upside. Expanded on this idea in the notes published tonight on the blog (Jim’s Notes).

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

The buyers stepped in or the short covering pushed the indexes higher on the day and the recovery looks to have some legs short term.

Small caps (TNA) stopped the bleeding and jumped back above the 1090 level on the Russell 2000 index. The rebound was positive, but still has work to do on the upside to reverse the micro downtrend in play. TNA $63.50 level of interest.

Volatility Index (SVXY) moved lower as fear turned to greed and the buyers stepped in to buy stocks. The inverse VIX ETF was a benefactor jumping 8.1% on the day. If we rally further short term target is $88 on the ETF.

Gold Miners (NUGT) big rally as gold bumps higher, but the fear factor evaporated in owning gold and the miners jumped 7%, NUGT was up 21.6% as it is three time leveraged. Nice reversal. Overextended on the downside. How much does it rally? Watch the dollar short term along with gold prices.

Biotech (BIB) solid recovery following the selling the last couple of days. The sector remains in play and resilient.

Natural Gas (DGAZ) the long side can’t find any legs to move higher and as a result has moved back to the bottom of the current trading range. If we break lower the short side is of interest on the commodity.

Financials (FAS) Upside bounced back today and that opened the upside trade again. $104.50 is level to watch on the upside going forward.

Other Sectors of Interest:

Crude Oil (DTO) was looking like it wanted to go higher, but reversed on Friday moving back below $90 barrel. Monday moved to $90.49? Volatility making it tough to trade. Tuesday moved to $88.82 again lower? Patience as the downside plays out along with the volatility.

Current EGG:

The volatility is keeping the scans from building any momentum in key sectors. Based on tonight’s scans we are interested in several potential trades above, but with the current uncertainty hanging over direction we have to take the path of patience and conservatism. I will update this further in the AM right here below this post. If the futures gain further overnight we would look for upside trade.

DBA trade is posted with the entry near the current close, but need to confirm the upside opportunity. Watching to see how it looks early as well.