--> All Price + No Volume = Suspect Rally: (DJP)

All Price + No Volume = Suspect Rally: (DJP)


Commentary:

Stock put in a strong performance on Monday but on very light volume. All five major indices ended the session higher by more than 2.0%. Smaller cap stocks led the way as the small-cap Russell 2000 and the S&P MidCap 400 rocketed 4.8% and 3.90% respectively. The Nasdaq climbed 3.3% while the S&P 500 tacked on 2.8%. The Dow Jones Industrial Average underperformed as it posted a 2.3% gain.

Market internals ended the session at opposite extremes. Volume was down significantly on the session. On the Nasdaq turnover fell by almost 13.0% and on the NYSE by 20.3%. However advancing volume overwhelmed declining volume by an impressive 32 to 1 on the NYSE and 39 to 1 on the Nasdaq. Yesterday’s price action was likely a result of short covering as the light volume suggests a lack of institutional participation in the rally. Yesterday was a follow through day but far from an accumulation day for the broad market.

Since forming a massive reversal bar on August 9th the iPath Dow Jones AIG Commodity ETN (DJP) has clawed its way back into resistance of the 200-day MA. Yesterday DJP showed relative weakness to the market as it gapped above its 200-day MA at the open and then sold off to close in the bottom third of its trading range. A volume assisted move back below yesterday’s low of $48.51 could present a short entry trigger for this ETF.

Yesterday the iPath DJ-UBS Livestock Total Return Sub-Index ETN (COW) gapped up to open at the high of the day, immediately sold off and eventually closed near session lows. A move below the three day low of $28.89 could present a short entry for this ETF.

The anemic volume muted what was an otherwise excellent day on Wall Street. Rallies on extremely light volume are suspect particularly when they are parabolic. Without institutional participation, moves of yesterday’s magnitude are almost always unsustainable.


Today’s Watchlist:

There are no new official setups this morning. We will send an Intraday Alert if any new trades are made.


Daily Performance Report:

Below is an overview of all open positions, as well as a performance report on all positions that were closed only since the previous day’s newsletter. Net P/L figures are based on the $50,000 Wagner Daily model account size. Changes to open positions since the previous report are listed in red text below. Please review the Wagner Daily Subscriber Guide for important, automatic rules on trigger and stop prices

    position summary

    Having trouble seeing the position summary graphic above?
    Click here to view it directly on your Internet browser instead.

    Notes:

  • No trades were made.
  • Reminder to subscribers – Intraday Trade Alerts to your e-mail and/or mobile phone are normally only sent to indicate a CHANGE to the pre-market plan that is detailed in each morning’s Wagner Daily. We sometimes send a courtesy alert just to confirm action that was already detailed in the pre-market newsletter, but this is not always the case. If no alert is received to the contrary, one should always assume we’re honoring all stops and trigger prices listed in each morning’s Wagner Daily. But whenever CHANGES to the pre-market stops or trigger prices are necessary, alerts are sent on an AS-NEEDED basis. Just a reminder of the purpose of Intraday Trade Alerts.
  • For those of you whose ISPs occasionally deliver your e-mail with a delay, make sure you’re signed up to receive our free text message alerts sent to your mobile phone. This provides a great way to have redundancy on all Intraday Trade Alerts. Send your request to [email protected] if not already set up for this value-added feature we provide to subscribers.

    Have you had your free 1-month trial to Morpheus Trading Group’s additional ETF and stock trading newsletters?

      Edited by Deron Wagner,
      MTG Founder and
      Head Trader

      Follow us on Twitter

      Latest Tweets

      @MorpheusTrading