Commentary:

Tuesday’s trading saw the first significant slide in the major indices in almost two weeks. Small-cap and mid-cap stocks led the day’s decline. The small-cap Russell 2000 shed 1.5% and the S&P MidCap 400 slid 1.1%. The S&P 500, Nasdaq and Dow Jones Industrial Average posted losses of 0.9%, 0.7% and 0.5% respectively. The major averages moved in a choppy range for the first 90 minutes of trading. At the 11:00 am reversal period the markets sold off sharply the majority of the day. The market did manage to pare some of its losses, as it bounced into the close.

Volume spiked significantly on Tuesday. Turnover on both the NYSE and the Nasdaq skyrocketed in Tuesday’s session. Volume was up 22% on both the NYSE and the Nasdaq. On the NYSE, declining volume outpaced advancing volume by 4.2 to 1, while the saw declining volume beat advancing volume by a ratio of 2.2 to 1. Tuesday’s market internals suggest Institutional distribution.

As discussed in Tuesday’s newsletter, the Japanese Yen was showing signs of weakness. In Tuesday’s trading session, the CurrencyShares Japanese Yen Trust (FXY) formed a significantly bearish reversal candle and plummeted below the 20-day EMA. In a single day of trading FXY dropped and closed below the September 19th low. The selloff was accompanied by a big spike in volume. The inverse of FXY demonstrated a mirror pattern. The ProShares Ultra Short Yen (YCS), blasted through resistance on Tuesday on massive volume. It closed well above the 20-day EMA. In the November 8th newsletter, we used the YCS chart to provide an example of a reversal setup. It was a timely example. Although YCS is not officially on the watchlist, we will be monitoring it closely for a possible buy entry. We will send out an alert should we enter the trade.

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Today’s Watchlist:

There are no official setups for today. As always, we will send an Intraday Alert if any new trades are made.

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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

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Notes:

• 
  No changes to our open positions at this time.
  
  
• 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 support@morpheustrading.com if not already set up for this value-added feature we provide to subscribers.

Edited by Deron Wagner,
MTG Founder and
Head Trader