--> Another Distribution Day ($SRS) ($USO)

Another Distribution Day ($SRS) ($USO)

ETFs and market commentary:

Stocks got slammed on Tuesday on brisk trade. All five major indices closed in the red by more than one percent. The small-cap Russell 2000 and S&P MidCap 400 plunged 2.1% and 1.9% respectively. The Dow Jones Industrial Average slid 1.6% while the S&P 500 lost 1.5%. The Nasdaq fared the best, but not by much. The tech-rich index ended the session down by 1.4%. All of the 104 sectors that we follow ended the day lower, with heavy construction, automotive, financials and oil services leading the plunge. Semiconductors and retailers showed the most strength as they contained losses to less than .5%.

Market internals were decidedly bearish. Volume spiked by 11.3% on the Nasdaq and 22.6% on the NYSE. Declining volume overwhelmed advancing volume by a whopping 25 to 1 on the NYSE and 5.7 to 1 on the Nasdaq. Yesterday was a definitive distribution day across the board. Institutions were selling from the opening to the closing bell.

UltraShort Real Estate (SRS) has been drifting sideways in a tight range at the 20-day EMA the past few weeks after breaking the daily downtrend line. The price action on March 5 served as a minor shakeout, which was followed by a higher volume reversal day on March 6. We are placing (SRS) on the watchlist. Trade details are posted in the Watchlist section of today’s report.

Since topping out on March 1st, the United States Oil Fund LP (USO) has pulled back into support of its 20-day EMA. If USO can stabilize at this level, it could provide a buying opportunity above yesterday’s high of $40.40. However, USO will probably need a few days to set up for a potential entry. We will continue to monitor this ETF for a potential long entry.

For the moment, we are keeping XLU on the watchlist. Although XLU gapped below support of its 20-day EMA, it worked its way back to close near session highs. However, if XLU trades below $34.69, we will nullify the setup. Yesterday’s price action was quite bearish and we must now be watchful of further distribution. We now have four distribution days on the NYSE and three on the Nasdaq in the past 20 trading days. We will become concerned for the potential of a bigger market correction if either or both of these indices reaches more than 5 distribution days in a consecutive 20 trading day timeframe.

Today’s ETF Watchlist:


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 DailySubscriber 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. SRS was added to the watchlist.

  • 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.

Stocks:

As mentioned above our distribution count stands at 4 days for the NYSE and 3 for the Nasdaq. The odds of the market selling off sharply over a short period of time increases with each distribution day we log especially when they cluster together. We reduced our long exposure from 70% last week to only 6% as of Tuesday’s open. With a 94% cash position we can afford to be patient and see how the market reacts to Tuesday’s plunge over the next few days.

When the market is in pullback mode our primary concern is how stocks with bullish chart patterns hold up. They can pullback and even undercut important support levels, but they can not blast through support and fall apart. Here are a few charts we are monitoring this week (these setups are not official):



Today’s Stock Watchlist:


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 model account size. Changes to open positions since the previous report are listed in red text below.

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

Notes:

  • No trades were made.


Relative Strength Watchlist:

The Relative Strength (or RS) Watchlist makes it easy for subscribers to import data into their own scanning software, such as Tradestation, Interactive Brokers, and TC2000. The list is comprised of the strongest 100 (or so) stocks in the market over the past six to 12 months. The scan is based on the following criteria and is updated every Monday:

  • Stock is in a well defined uptrend, trading above both the 50-day and 200-day moving averages, with the 50-day moving average above the 200-day moving average (both moving averages should be in an uptrend as well).
  • Today’s close is less than 20% off the 52-week high
  • Close is greater than $5.
  • Volume is greater than 200,000 shares per day (using a 50-day volume moving average).

Click here to view this week’s Relative Strength Watchlist in excel

Click here to view this week’s Relative Strength Watchlist as a text file

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