Bullish consolidation in the market (XRT)


Stocks ended the day mixed as trade waned. Stocks struggled to gain traction throughout the session and the day ended with only the Nasdaq closing higher. By the closing bell the tech-rich index managed to tack on a meager 0.2%. The S&P MidCap 400 ended the session flat, while both the small-cap Russell 2000 and the S&P 500 slid 0.3%. The Dow Jones Industrial Average was the day’s worst performer. The blue-chip index closed lower by 0.5%.

Internals were mixed on Friday. Volume fell on the Nasdaq by 7.5% and on the NYSE by over 16.0%. Declining volume outshined advancing volume on the NYSE by a ratio of 1.7 to 1, while on the Nasdaq advancing volume held the upper hand by a margin of 1.4 to 1. Based on Friday’s light volume, it is apparent that institutional players were on the sidelines.

On Friday, via intraday alert, we closed our long position in EUO and bagged a 1.6% gain on capital. We decided to exit the position since EUO has gapped up three consecutive sessions. We are playing the odds for a pullback in this ETF because, statistically, EUO has rarely rallied in the wake of three consecutive gap ups. Further, a 1.6% addition to capital is significant in what has been a rough trading environment. We will look to re-enter EUO if it pulls back.

On Friday we sent an alert that we were placing a buy stop on the SPDR S&P Retail ETF (XRT) just above the two day high of $52.76. On Thursday, XRT formed an impressive reversal candle on a significant spike in volume. If XRT can get above this critical mark, it has the potential to test the October 2011 high near $55.00.

Friday’s price action should favor market bulls, as the broad market consolidated near recent highs, in a tight range. Further, for the first time in months, we are beginning to see stocks that have held relative strength since last summer’s blowout, begin breaking out to new highs. At least for the moment, we are seeing price confirmation in the market.

Today’s Watchlist:


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

Notes = see commentary above


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

Notes = see commentary from January 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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  • PCY was removed from the watchlist. Per intraday alert, sold EUO to lock in a + $800 gain.
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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader