ETFs and market commentary:
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.
Both IYR and XLU closed near session highs yesterday and IYR is now poised to break its previous swing high set on February 3rd ($62.02). IYR provides and important trading lesson as it was entered after we closed out a losing trade in its inverse cousin, SRS. Once we recognized that we were on the wrong side of the real estate trade, we quickly reversed the trade and now are well in the money. Flexibility in trading is important, as well as the ability to not dwell on a losing trade. The Russell 2000 is finally showing signs of life. If the Russell can “catch up” to the rest of the market and break to a new 52 week high, this could set the stage for another big move higher for the broad market.
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
Having trouble seeing the position summary graphic above? Click here to view it directly on your Internet browser instead.
Notes:
- No trades were made. Per commentary above, DIG 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.
VFC triggered a long entry for us over the opening five minute high. Although there was no follow through after our entry, the action recovered nicely into the close. We also added to our position in SLXP as it broke out to new highs on heavy volume. We now have 125 shares total with a new average price in the open positions section below.
Yesterday’s heavy volume accumulation day was a bullish sign for the market. We’ll continue to build up our long exposure until the evidence suggests otherwise. While we may have one or two stop outs along the way, we should see the majority of stocks pushing higher (60-75%).
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:
- VFC long triggered off the watchlist. Per intraday alert, we added 50 shares to our position in SLXP.
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