Commentary:

Stocks slid lower on Monday amidst higher trade. All five major indices ended the session in the red. Price action was negative for most of the day as the vast majority of shares opened at the high and closed near the low of the session. The small-cap Russell 2000 led the move lower as it fell 3.3%. The S&P MidCap 400 shed 2.9% while the Dow Jones Industrial Average, Nasdaq and S&P 500 lost 2.1%, 2.0% and 1.9% respectively

Market internals were bearish across both exchanges but the Nasdaq once again showed relative strength to the broad market for much of the session. Volume increased on the NYSE by almost 10.0% but on the Nasdaq by a more modest 1.2%. By the closing bell, declining volume topped advancing volume by a ratio of 9.1 to 1 on the NYSE and by 3.9 to 1 on the Nasdaq. Monday was a distribution day for the market as trade increased during the selloff. However, the price and volume action was a far cry from the capitulation we witnessed in the market several weeks ago.

For the fourth time in as many days the Market Vectors Junior Gold Miner ETF (GDXJ) found resistance at its 20-day EMA yesterday. Further, GDXJ closed near session lows and at the bottom end of the six day trading range. A volume fueled move below the six day low of $29.60 could provide a shorting opportunity in this ETF.

Yesterday, on a burst in volume, the Direxion Daily Emerging Markets Bear 3X Shares ETF (EDZ) reversed off its nine day lows and closed near session highs. A move above resistance at $24.49 could present a buy entry trigger for EDZ. We are monitoring this setup closely for a possible long entry.

Via intraday alert we entered a long position in ProShares UltraShort Euro ETF (EUO) yesterday. Trade details are available to our subscribers in the watchlist segment of the newsletter.

As anticipated the market fell under selling pressure at key resistance yesterday. The uptick in volume that accompanied the selloff suggests that market bears may not be quite yet ready to relinquish control. The next few sessions will give us critical insight into the commitment of bulls in most recent move higher and we remain cautious with respect to the short side of the market. Earnings season is once again in force with AAPL and INTC set to announce today.

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Today’s Watchlist:

There are no new setups for today. As always, we will send an intraday alert if any new trades are made.

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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:

• Per intraday alert, bought EUO above the 200-day MA.
• 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