ETFs and market commentary:
For the second time in as many days, stocks ended the session mixed. The major indices were under pressure for most of the session but a late day rally salvaged what could have been a very negative day on Wall Street. For the most part the broad market held up well but there were signs of selling into strength. This is the second time we’ve seen this type of price action in the past seven sessions. The DJIA and the S&P 500 showed the most resiliency as both indices closed higher by 0.1%. The Nasdaq shed 0.1% while the S&P MidCap 400 and small-cap Russell 2000 dropped 0.4% and 0.7% respectively. The top performing sectors included gold, gold miners, oil & gas, computer hardware and internet services. Underperforming sectors included retail, airlines, biotechnology, semiconductors and homebuilders.
Internals ended mixed on Tuesday. Volume slid by 7.2% on the Nasdaq and 13.1% on the NYSE. However, advancing volume managed to outpace declining volume by a ratio of 1.1 to 1 on the Big Board. On the Nasdaq, declining volume held the upper hand by a factor of 1.8 to 1.
Since October of 2011, the ProShares UltraShort Real Estate ETF (SRS) has been in a significant downtrend. However, over the past 2.5 weeks, SRS has been consolidating in a tight range as it has set a sequence of higher lows. Further, SRS has rallied above its 10-day MA and is now poised to break above its 20-day EMA. A volume fueled move above yesterday’s high of $32.41 could provide a buying opportunity in this ETF.
Over the past two weeks the iPath Goldman Sachs Crude Oil ETN (OIL) has been showing relative strength to the broad market. Yesterday, OIL broke to new highs on a massive spike in volume. The ideal entry point for this trade would have been on February 13th when OIL broke above its short term downtrend line. Now that OIL has surged higher, it is not advisable to “chase the trade”. Instead, we will be looking at a possible long entry into a pullback. An undercut of support near $26.30 could provide a buy entry for this ETN. We are montoring OIL closely for a possible long entry.
We exited our long positions in DVY and SOXL yielding solid profits. We also exited XLU for a small loss. We made a judgment call to reduce our exposure to the market due to the negative price action in the early afternoon session. In addition, SOXL and XLU were exhibiting relative weakness and it therefore made sense to exit both trades given market conditions. IAU hit its adjusted trigger and we entered the trade yesterday. IAU closed at the high of the session. Although we remain bullish on the market, it appears that we could see a pullback, or at a minimum, sector rotation. We believe that it is best to stay mostly in cash until new setups develop.
Today’s ETF Watchlist:
Note: The old watchlist is replaced by the excel graphic below:
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 DailySubscriber 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:
- IAU long entry triggered over the 5-minute high. PPH has been removed from the watchlist. Per intraday alert, we sold DVY and SOXL to protect gains. XLU was sold for a small loss due to the false breakout.
- 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.
Lack of follow through! That pretty much sums up the past few weeks of trading. Although there were a handful of promising buy patterns in February, we did not see the explosive price action that we normally associate with momentum stocks while the market is in an uptrend. Our short-term plan is to continue to lay low and wait for new setups to emerge.
Today’sStock Watchlist:
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 model account size. Changes to open positions since the previous report are listed in red text below.
Having trouble seeing the position summary graphic above? Click here to view it directly on your Internet browser instead.
Notes:
- Per intraday alert, we first raised the stop in BWLD to breakeven. Shortly thereafter, we sent an alert to sell for a small gain. BWLD failed to follow through from our entry point so we felt it was best to exit with a small gain. For those of you who were unable to to sell BWLD, please move the stop to breakeven at 85.17.
Relative Strength Watchlist:
The Relative Strength (or RS) Watchlist makes it easy for subscribers to import data into their own scanning software, such as Tradestation, Interactive Brokers, and TC2000. The list is comprised of the strongest 100 (or so) stocks in the market over the past six to 12 months. The scan is based on the following criteria and is updated every Monday:
- Stock is in a well defined uptrend, trading above both the 50-day and 200-day moving averages, with the 50-day moving average above the 200-day moving average (both moving averages should be in an uptrend as well).
- Today’s close is less than 20% off the 52-week high
- Close is greater than $5.
- Volume is greater than 200,000 shares per day (using a 50-day volume moving average).
Click here to view this week’s Relative Strength Watchlist in excel
Click here to view this week’s Relative Strength Watchlist as a text file