market timing model:

sell

today’s watchlist (potential trade entries):

open positions:

Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Net P/L figures are based on two separate $50,000 model portfolios (one for ETFs and one for stocks). Changes to open positions since the previous report are listed in red shaded cells below. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits.

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closed positions:

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ETF position notes:

• No trades were made.

stock position notes:

• We lowered the stop in CRM to breakeven and raised the target to 135.00 just to be safe.

ETF and broad market commentary:

Yesterday, stocks lost ground on higher trade and closed near session lows. Higher-beta issues led the decline as the small-cap Russell 2000 and the S&P MidCap 400 fell 2.0% and 1.9% respectively. The S&P 500 lost 1.4%, while the Dow Jones Industrial Average slid 1.3%. The Nasdaq showed the most resiliency on the day but still dropped 1.1%. Of the one hundred and four sectors that we track, only the computer hardware sector closed in positive territory.

In a reversal of Tuesday’s action, market internals ended the day on a bearish note. Turnover rose on the Nasdaq by a modest 0.4% but on the NYSE it climbed by 2.2%. Declining volume overwhelmed advancing volume by a ratio of 13.8 to 1 on the NYSE and 5.6 to 1 on the Nasdaq. Based on market internals, we would classify yesterday as a distribution day for the market.

Yesterday, the S&P Select Consumer Discretionary SPDR ETF (XLY) surrendered support of its 20-day EMA, as it gapped down and closed near session lows. A volume assisted move below yesterday’s low of $43.07 could provide a short entry trigger for this ETF. We are placing XLY on the watchlist. Trade details are posted in the watchlist section of the newsletter. There is no inverse ETF for the consumer discretionary sector.

Wednesday’s price action quickly put a damper on the positive momentum the market gained on Tuesday. For the moment, it appears as if market bears are not yet ready to relinquish control of the market.

stock commentary:

 

We have one new short setup on today’s watchlist in DKS, which bounced off the swing low and stalled shy of the 20-day EMA a few days ago. The setup offers a respectable 2 to 1 reward to risk ratio if it can reach its target at 42.00, which isn’t unreasonable.

 

If you are a new subscriber, please e-mail rick@morpheustrading.com with any questions regarding our trading strategy, money management, or how to make the most out of this report.
relative strength watchlist:

Our 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. This list is comprised of the strongest 100 (or so) stocks in the market over the past six to 12 months. The scan is updated every Sunday, and this week’s RS Watchlist can be downloaded by logging in to the Members Area of our web site.