E-mailed to you each morning before the market opens, The Wagner Daily provides brief, but comprehensive commentary and technical analysis on the ETFs, major market indices, and industry sectors that are setting up for potential trade entry. Rather than focusing on only the popular ETFs such as the S&P 500 SPDR (SPY) and the Nasdaq 100 Tracking Stock (QQQQ), Morpheus Trading Group monitors and looks for trade setups from the complete universe of ETFs traded on the U.S. markets. If you have not already done so, please download and print the free Morpheus ETF Roundup guide, an excellent reference tool designed to help you get the most out of your Wagner Daily subscription.

The user-friendly format of each edition of The Wagner Daily consists of the following three sections that are explained in detail below:

• Commentary - This section discusses how the previous day's action may affect the next trading session, highlights the technical state of the broad market, and highlights specific sectors and ETFs that we are stalking for potential entry on both the long and short side of the market.


• Today's Watchlist - When clear ETF trade opportunities present themselves, this is where the specific details of the technical setup are explained. An annotated graph, explanation of the setup, share size, trigger, stop, and target prices are all provided. The frequency of setups provided is dependent on both market conditions and our current number of open positions, but we typically target one to two new ETFs for entry each week. Holding times vary, but average between 1 to 3 weeks. Rather than inundating you with an unrealistic number of trades to follow, we use an actual model account that ensures we are never positioned beyond its maximum buying power. The model account is $50,000 that can use 2 to 1 margin, giving a total buying power of $100,000. Traders can simply divide or multiply our pre-determined share size in order to match the proportionate size of their own trading account. Here is an explanation of the terms used in this section:
  
  
  • Shares - The share size we are targeting for entry, based upon the $50,000 model account explained above. Maximum risk per trade (share size times the number of points to the stop) is 2% of the model account size ($1,000). However, most trades are sized for a risk of approximately 1% of capital.
  
  
  • Trigger - Exact price that the ETF must trade through before we will enter the trade. For a "long" setup, the ETF must trade at or above the trigger price. For a "short" setup, it must trade at or below the trigger price. Unless informed otherwise via intraday e-mail alert, we will only enter the position if the trigger price is hit. Entering a trade before it trades through its pre-determined trigger price substantially increases the risk of loss.
  
  
  • Stop - If the setup triggers, this is the initial price at which we will have a protective stop market order. As a position becomes profitable, this stop price will often be trailed higher in order to lock in profits. If any changes occur intraday, an intraday e-mail alert will be promptly sent. Adjustments to the stop price are also reported in the following day's newsletter, under the "Daily Performance Report" section.
  
  
  • Target - This is the roughly anticipated price we expect the ETF will move to. Unless informed otherwise, we automatically close trades as soon as they hit their target prices. However, this does not mean we will always hold the ETF to that price. When conditions warrant, we will sometimes take profits before the target price. Again, any pre-market changes to the target price are reported under the "Daily Performance Report," while you will be informed of intraday changes via e-mail alert.
  
  
  • Dividend Date - In recent years, dividend payments have become a key benefit to trading certain types of ETFs. While dividends in most broad-based or industry sector ETFs are not substantial, certain families of ETFs pay rather large dividends based on the underlying manner in which they are composed. Just like individual stocks, the prices of ETFs are always adjusted lower by the amount of the dividend payment on the date they trade "ex-dividend." Since you get paid the cash dividends, you're not losing any money on such transactions, but the price adjustment can affect the stop and target prices of our technical setups. Therefore, we automatically adjust our stop and target prices for the trade if we are holding any ETFs through their "ex-dividend" date. When this occurs, changes to the dividend-adjusted stop and target prices will be noted under the "open positions" section of the "Daily Performance Report."


• Daily Performance Report - An overview of all open ETF positions, as well as a performance report on all closed positions, is listed here. For the sake of simplicity, only positions that have been closed since the previous day's newsletter are reported each day. A cumulative performance report of all past trades can be found on the MTG web site. When changes to open positions such as stop or target prices have been made, they are highlighted in red text for easy reference. "Unrealized P/L" of open positions is based on the closing marked to market value of the most recent trading day. "Net P/L" of closed positions is based on the model account size and includes realistic commission fees of one cent per share. When reporting closed positions, we use realistic entry and exit prices that account for normal slippage, rather than the exact, theoretical prices that were listed in the setup.