ONE EGG Scan for September 30th

The day-to-day swings in the broad market indexes creates a challenge for trading strategies that look longer than 1-2 days. The EGG Scans are not designed to to find day trades, but momentum in sectors. Based on my scans that is not existing currently except in outliers that have elevated risk. They do show up in our scans, but we evaluate the risk of putting our money into high volatility positions in a high volatility market, and take note that if we are wrong the cost or loss is to great potentially to take on the risk of the trade. Simply put, this is not an environment that is conducive to how we trade the ONE EGG Model.

With that in mind we look at the activity on Friday in light of looking forward this week.

Running the EGG Scans – First the daily winners…

Intraday volatility is keeping investors in limbo. We have to be patient and let all of the news, events and confusion unfold. Once it settle the opportunities will be simple to spot and trade.

Volatility index (VIX) jumpy intraday, but remains one piece to watch this week.

Gold miners (DUST) as we stated on Friday the downside bias remains in play. the short trade is trending higher if you are willing to accept the risk of the trade.

Financials (FAS) bounced on Friday, but the damage of the selling remains a watch and see. need to clear the $105 mark.

Treasury Bonds (TMF) the jump in bond prices comes from a decline further in yields… again.

Emerging Markets (EUM) downside jumps as the Hong Kong issues unsettle investors.

Downside from Thursday still worth our attention: 

Russia (RUSS) sellers return to the downside trade. more below. Big jump on short trade Monday as the global news was nervous.

Emerging Markets (EDZ) the sellers dumping stocks as this moves even lower. Moved lower on Hong Kong.

Small Caps (TZA) short term working well (Pattern Trading Model) Small bounce on Monday.

Energy (ERY) short energy trade working well also (Pattern Trading Model) holding steady with little movement.

Natural Gas (UGAZ) the long side moved higher today and still in the trading range or base short term. Monday close to break higher from the trading range.

Continued Watch Points: 

Gold miners (DUST) short side is exerting itself as the selling gains momentum once again. Gold and silver continue to push lower and little optimism in terms of the upside. The short trade is working well for now. Small test as gold moves on politics… tight stops on this trade if you have position. Watch the optimism the media has for stocks based on the current sentiment towards stocks.

Gold (DZZ) short side continues in the uptrend established off the August lows. (High for gold) Watch base to build short term.

Healthcare (CURE) bounced back to a new high and resumed the uptrend. Can’t follow through the last week and we still need some momentum if the upside remains intact.

Russia (RUSS) short side of Russia back as the pattern attempts to complete a move and establish the short trade for now. downside continues to accelerate on the worries globally.

Technology (TECL) Testing lower and back towards the bottom of the current trading range. watching for some clarity short term. No clarity on Wednesday, but we did bounce back near the high of the trading range. Thursday broke support on the downside and Friday bounced back to support. We have to look at TECS on the break above $13.60.

Semiconductors (SOXL) testing the conviction of the buyers currently. Watch. Nice bounce on Wednesday. Failed to follow through and a break of the 50 DMA look at short trade. SOXS  $19 entry.

Financials (FAS) testing the move higher and causing questions. At support again? Small bounce on Wednesday. Broke support on Thursday and bounced on Friday. We have to look at FAZ to capitalize on the downside if it unfolds.  $16.50 entry. But, don’t rule out the upside at this point. Patience.

As I stated in the market notes… patience and let this unfold.

Trade Considerations: 

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

Current EGG:

No Egg as we stopped out of the XLF positions. Watching for the volatility to calm and offer some clarity.