Wagner Daily Lite – February 8, 2012 ($IAU)

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Equities ended the session mostly higher yesterday, as trade quickened for a second consecutive day. Four of the five major indices closed in positive territory. Larger cap issues fared better on Tuesday, as the DJIA added 0.3%. The S&P 500 and S&P MidCap 400 produced mirrored results, as they both added 0.2%. The Nasdaq closed 0.1% higher and the small-cap Russell 2000 was 0.1% lower. The oil and oil services sectors outperformed today, while the vast majority of sectors muddled sideways.

Market internals flashed a modestly bullish signal on Tuesday. Turnover moved higher by 5.6% on both exchanges. Advancing volume topped declining volume by 1.2 to 1 on both the NYSE and the Nasdaq. Although yesterday’s price action was not significant enough to officially call it an accumulation day, the price action was bullish. Given the fact that we are consolidating at the highs, and every round of selling continues to find a bid, it appears likely that we are headed higher. An index must increase by 0.3% or more on higher volume in order for an advance to be considered an accumulation day. None of the five major indices met these criteria yesterday.

In yesterday’s newsletter (February 7, 2012), we stated that “an undercut of the 20-day EMA could provide a possible buy entry point for IAU”. However, it appears that IAU may have completed the pullback with an undercut of the 10-day MA. As we have discussed in the past, if an ETF enters a strong trend, quite often the 10-day will serve as support for an extended period of time. Tuesday’s reversal in IAU has now provided us with a trigger to enter the trade. A move above the three-day high of $17.07 may provide a buying opportunity in this ETF. As such, we are placing IAU on today’s watchlist. Entry and stop price details for the trade are available to subscribing members in the watchlist section of the newsletter…

The commentary above is an excerpt from our nightly Wagner Daily newsletter. Subscribing members receive annotated ETF and stock charts, detailed entry and exit prices for potential swing trade entries, and additional technical market commentary.

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