Commentary:

For the fifth time in six days stocks forged higher. The major indices all closed in positive territory with biotechs and precious metals leading the move. Both the Dow Jones Industrial Average and the Nasdaq tacked on solid gains of 0.8%. The small-cap Russell 2000 added 0.7% while both the S&P MidCap 400 and S&P 500 improved by 0.6%.

Market internals continue to remain sound. Volume moved higher across the board. Turnover was fractionally higher on the Nasdaq, but improved by almost 5% on the NYSE. For a second consecutive day advancing volume outpaced declining volume. By the closing bell the advancing volume to declining volume ratio was 2.2 to 1 on the Big Board and 1.7 to 1 on the Nasdaq. Although internals were not spectacular they were solid and continue to corroborate the presence of institutional buying.

The SPDR S&P Oil & Gas Equipment ETF (XES) formed a bullish reversal candle yesterday as it sold off sharply in the first hour of the session, undercut the four day low but rebounded to close in the top quarter of the trading range. The importance of this price action is that it serves to sweep most stops, shake out the weak hands and encourage shorting activity. A volume fueled move above yesterday’s high of $43.86 could provide a buy trigger for XES. We are placing XES on the watchlist. Trade details can be found in the watchlist segment of the newsletter.

The US Commodity Index ETF (USCI) also formed a bullish reversal candle by undercutting the four day low and filling the gap formed from the April 20th gap up. A move above yesterday’s high of $72.06 should present a long entry for this ETF. We are placing USCI on the watchlist. As always, trade details are available for our clients in the watchlist section of the newsletter.

With yesterday’s performance all indices but the Russell 2000, have clearly established new 52 week highs. Now that the Nasdaq, DJIA and S&P 500 have all found higher ground the odds favor the market moving solidly higher from current levels.

---

Today’s Watchlist:

USCI
Long

Shares = 300
Trigger = 72.14
Stop = 70.72
Target = New swing highs
Dividend Date = n/a

Notes = see commentary above

XES
Long

Shares = 300
Trigger = 43.92
Stop = 42.36
Target = New swing highs
Dividend Date = n/a

Notes = see commentary above

IEO
Long

Shares = 200
Trigger = 72.69
Stop = 70.89
Target = New swing highs
Dividend Date = n/a

Notes = see commentary from April 27th report

---

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

Having trouble seeing the position summary graphic above? Click here to view it directly on your Internet browser instead.

Notes:

• There were no changes to the open positions section.

• 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