ONE EGG Scan for January 15th

Earnings are not starting out very well and that has put the market in a mood. What that means to me is the volatility intraday is a bit much with some large swings up and down. If you are day trading that is great, but since we are not focused in the realm it keeps me on the sidelines willing to wait it out for now. The risk/reward of the short term trades is elevated due to the volatility and thus, we will be patient for now.

Sectors Worthy of Attention: 

Crude oil¬†has been in a progressive downtrend hitting a low of $47 last¬†week.¬†NO RALLY? Nice bounce on Wednesday late in the trading day, but a short squeeze got the credit. That isn’t likely sustainable, but it is worth watching moving into today’s trading.

FXI¬†is volatile, but working it’s way to a new high. It is one of those positions that is like riding a roller coaster. Still looking at the upside trade.

Gold minders are attempting to make a break higher as gold makes a move. Just when you think a sector will offer some trading opportunities in turns into the same psycho as the over all market has been the last couple of weeks. Watching to see if the downside continues to accelerate beyond the 5% drop the last two trading days.

Downside views in S&P 500 index (SPXS) $21.10 entry is interesting. Hit the entry on Monday’s selling. Still showing downside vulnerability.

NASDAQ Index on downside is renew selling. QID $40.20 entry is selling continues. Hit the entry on Monday’s selling. Still gaining some downside momentum.

UNG bounced 5% Tuesday? followed it with a 11.6% gain on Wednesday! Interesting and worth attention going forward.

Result for the Daily EGG Scan: 

UNG – big jump higher the last two days… could offer test and trade opportunity.

TMF – treasury bonds continued move higher on yields moving lower.

DUG or ERY – Short energy sector trades broke out on Monday and followed through on Tuesday. Some testing on the gains in crude on Wednesday, but that is likely a short opportunity on the rally. Watch.

VXX – Volatility index trade broke higher on Monday. Followed through on Tuesday and Wednesday.

SOXS – short side of semiconductors setting up.

SKF – short financial trade is setting up following the wreck on earnings from JP Morgan.

Markets are still playing the worry game as the uncertainty is the name of the game. The selling this week has been mixed with investors still uncertain of trusting the data and oil price worries. Trading environment as long term views remain a flip of the coin with a bias on the downside. Risk/Reward remains to high on the risk side and willing let the volatility calm some and some confidence return on either side short or long.