Breakout Around the Bend – (DUST)


Stocks closed modestly higher on increased volume. Stock meandered in a tight range for the entire session. Each of the major indices finished in higher territory, as smaller cap stocks showed the most resiliency. By the close, the small-cap Russell 2000 added 0.6%, while the S&P MidCap 400 rose 0.5%. The Dow Jones Industrial Average, S&P 500 and Nasdaq managed gains of 0.3%, 0.2% and 0.1% respectively.

Internals ended the day on a modestly bullish note. Volume increased by 5.5% on the Nasdaq and by 2.0% on the NYSE. Advancing volume outpaced declining volume on both exchanges by a factor of 2 to 1. In order to have an accumulation day, our rules require that volume be higher and that the index must close up by 0.3% or more. This only occurred on the DJIA, S&P MidCap 400, and small-cap Russell 2000. Nonetheless, at a minimum, we likely witnessed a bullish day today.

Since the pullback began on December 29th, the Direxion Daily Gold Miners 3x Bear ETF (DUST) has pulled back into support of its 50-day MA. If DUST can clear $38.00 on a burst of volume, it could be a potential long candidate. Further, a move above $39.00 could provide a secondary entry point or a safe place to acquire additional shares. It could make sense to “leg” into the position by taking a partial position above $38.00 and adding to it above the next resistance level. Entering small size above different resistance levels is a good strategy in a choppy market, as it minimizes risk if the initial entry fails. We are placing DUST on the Watchlist. Trade details are posted for our subscribers in the watchlist segment of the newsletter (note the two trigger prices and stops).

Following a false breakout and sharp reversal on January 3rd, the SPDR Dow Jones Wilshire REIT (RWR) has pulled back and undercut support of both its 200-day and 20-day moving averages. It then quickly recovered to reclaim support of these key levels. A volume fueled rally above the three day high of $64.79 could present a buy entry in this RWR. We will be monitoring RWR closely for a possible long entry.

Neither of our watchlist candidates triggered today (XRT, IWB) but both setups remain intact. Our open positions in IYT and IYZ both held support for a third consecutive day. They both also closed near session highs. If IYT and IYZ can each clear their respective 3-day highs, both should see strong rallies. All in all, it was an uneventful day on Wall Street. However, with each day the market consolidates at the current levels, the more likely it appears that the market will move higher. We continue to be impressed by the number of high relative strength stocks that have been holding their breakouts over the past several sessions. This is a good sign that we may be headed higher.

Today’s Watchlist:


Shares = see triggers 1 & 2
Trigger 1 = 60 shares at 38.13
Stop 1 = 35.33
Trigger 2 = 100 shares at 39.04
Stop 2 = 36.34
Target = n/a (will send alert)
Dividend Date = n/a

Notes = see commentary above


Shares = 250
Trigger = 52.86
Stop = 51.17
Target = 55.50 – 56.00 area (will send alert)
Dividend Date = n/a

Notes = see commentary from Jan. 9


Shares = 300
Trigger = 71.02
Stop = 69.62
Target = 74.80
Dividend Date = n/a

Notes = see commentary from Jan. 6

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

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  • No trades were made.
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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader