Wagner Daily Lite for March 14, 2012 – Big Accumulation Day for Market: ($IYR) ($XLU) ($DIG) $$

Stocks surged higher on Tuesday on fast trade. The small-cap Russell 2000 was the day’s big winner, as it tacked on 2.1%. However, the small-cap index is the only index that has yet to set a new 52 week high in the past five sessions. The S&P MidCap 400 followed the lead of the Nasdaq, DJIA and S&P 500 as it set a new 52 week high yesterday and posted an impressive 2.0% gain. The Nasdaq added 1.9% while the DJIA and S&P 500 rose 18.% and 1.7% respectively. Of the 104 sectors that we monitor, gold miners and drug retailers were the only two that closed lower on the day. The impressive broad based rally was led by banks and real estate. Seventy eight sectors closed higher by one percent or more.

Tuesday’s rally was quite bullish as it occurred on a massive spike in volume. Trade on the Nasdaq increased by 26.4% and on the NYSE by 39.7%. Advancing volume overpowered declining volume by a factor of 9.6 to 1 on the NYSE and 5.1 to 1 on the Nasdaq. Yesterday was a definitive accumulation day for the broad market and a good day on Wall Street.

Since September of 2011, the ProShares UltraShort 20+ Year Treasury (TBT) has found support at, and has been consolidating in a tight trading range between $17.80 and $19.90. Yesterday, on a burst of volume, TBT closed above the $19.90 mark for the first time since December of last year. If TBT can clear the December 1, 2011 high of $20.15, it could present a buying opportunity. We are monitoring this setup closely for a potential long entry.

The ProShares Ultra Oil and Gas ETF (DIG) formed a reversal candle on an increase in volume yesterday. At the open, DIG sold off and tested Monday’s low before reversing to close near the session high. A rally above yesterday’s high of $51.24 could provide a buying opportunity in DIG. We are placing DIG on the watchlist. Trade details are posted in the newsletter.

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