Commentary:
Stocks moved higher on Tuesday on an uptick in trade. All major indices closed in the black with the Russell 2000 leading the charge. By the closing bell the small-cap index posted a 1.4% gain. The Nasdaq tacked on 1.1% while the S&P MIdCap 400 added 1.0%. The S&P 500 and the Dow Jones Industrial Average underperformed on the day but still posted gains of 0.5% and 0.1% respectively.
Market internals were bullish on Tuesday. Volume spiked on the Nasdaq by 21.5% and on the NYSE by 19.1%. Advancing volume topped declining volume on both exchanges, with the spread ratio ending at a plus 1.8 to 1 on the NYSE and 1.9 to 1 on the Nasdaq. The uptick in volume accompanied by the higher advancing volume, suggests institutional buying on Tuesday. We would therefore categorize yesterday as an accumulation day for the market.
The Direxion Small Cap Bull 3x Shares (TNA) has been consolidating along its 20-day EMA as it has been setting a sequence of higher lows. This contraction in price action is one of the things we look for in stocks that are potential long candidates. Yesterday, on a big spike in volume, TNA undercut its 20-day EMA but recovered to close back above this key mark and at the three day high. A move above yesterday’s high of $47.64 could provide a buying opportunity in this ETF.
XRT has spent most of the past three weeks consolidating at its 20-day EMA. Since establishing a higher-low on November 9th XRT has reclaimed the 20-day EMA and has been consolidating above this mark. Trade details are available to our subscribing members in the watchlist section of the newsletter.
It is noteworthy that the market was able to overcome an early morning gap down and a significant drop in the S&P and Nasdaq futures in overnight trading. This is precisely the type of price action that we like to see from a market that is preparing for a potential move higher. As we’ve stated many times recently, the key now is to avoid distribution days as this could quickly weaken any potential rally.
Today’s Watchlist:
XRT
Long
Shares = 150
Trigger = 53.76
Stop = 51.17
Target = New swing high
Dividend Date = n/a
Notes = See commentary above
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
- We are placing a buy stop order for 150 shares of XRT at 53.76. We incorrectly listed this as a buy limit order in yesterday’s alert.
- 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.
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Notes:
Edited by Deron Wagner,
MTG Founder and
Head Trader