Commentary:

Wednesday was a good day on Wall Street, as stocks surged higher and closed near session highs. Four of the five major indices that we track closed more than one percent higher. The DJIA was the sole holdout. The blue chip index lagged on the session but still managed a 0.8% gain. High beta stocks led the charge as the small-cap Russell 2000, S&P MidCap 400 and the Nasdaq climbed 1.8%, 1.6% and 1.5% respectively. The S&P 500 tacked on a solid 1.1%. Semiconductor, emerging market, retail and most technology ETFs showed the most relative strength yesterday. On the other hand, natural gas, utilities, oil and precious metals were underperformers on the session.

Market internals were strong on Wednesday, confirming the bullish price action. Volume spiked on the Nasdq by 11.8%, while on the NYSE it rose by a modest 1.1%. However, the ratio of advancing volume to declining volume was greater on the NYSE. By the closing bell the spread ratio stood at plus 5.8 to 1 on the Big Board and plus 3.4 to 1 on the Nasdaq. With all internals pointing in the same direction, it was clearly an accumulation day on Wednesday. The rising volume suggests institutional buying.

The Direxion Daily Financial Bull 3x Shares (FAS), on a burst of volume yesterday, rallied to close just below the four day high of $77.63. FAS has been consolidating in tight range for the past six sessions just above its 10-day moving average. In a strong market, it is not unusual for ETFs to track the 10-day, rather than the 20-day moving average, for extended periods of time. This ETF is on the cusp of breaking out. If the market cooperates and FAS sees solid volume tomorrow, it could present a buying opportunity above the four day high. We are placing FAS on the watchlist. Trade details can be found in the watchlist section of the newsletter.

All of our positions moved higher yesterday, and based upon the close, it appears as if we should see upside follow through tomorrow. TNA performed particularly well, as it surged 5.2%. Yesterday’s accumulation day placed a bullish stamp of approval on the market. Although we would not be surprised to see a pullback sometime soon, the bulls appear to be clearly in control of the market.

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Today’s Watchlist:

FAS
Long

Shares = 100
Trigger = 77.75
Stop = 71.60
Target = New swing high
Dividend Date = n/a

Notes = see commentary above

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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 trades were made.
• 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