Chop, Chop? – (DUST) (PCY)


In a sleeper of a session, stocks ended mixed, on mixed trade. The small-cap Russell 2000 closed 0.5% higher while the S&P MidCap 400 and the Nasdaq both added 0.3%. The S&P 500 advanced a meager 0.01% while the Dow Jones Industrial Average ended the day fractionally lower.

For the fourth time in as many sessions market internals were mixed. Volume rose by 1.6% on the NYSE but fell by 1.4% on the Nasdaq. Interestingly, both exchanges saw declining volume slightly outpace advancing volume. By the closing bell, the spread ratio stood at -1.4 to 1 on the NYSE and -1.1 to 1 on the Nasdaq. Yesterday’s lackluster trade points to an absence of institutional participation in the day’s action.

Since Breaking above resistance of the 200-day MA on December 14th, the Direxion Gold Miners 3X Bear ETF (DUST), has been consolidating above this key mark, as its price action has tightened. Twice over the past three sessions, DUST has found resistance near $42.60. Ideally, we would like to see DUST form an inside candle as this could serve as a launching pad for a move higher. A breakout above the three day high of $42.65 on an uptick in volume, could present a buying opportunity in this ETF.

Yesterday, on a burst in volume, the PowerShares Emerging Markets Sovereign Debt ETF (PCY) formed a reversal candle as it undercut its 50-day MA, but reversed to close near session highs. A volume powered move back above yesterday’s high of $27.30 could provide a buying opportunity in this ETF. We are tracking PCY closely for a possible long entry.

The market showed little signs of life during yesterday’s post holiday session. However, it is promising that all of the major indices are consolidating at the two day high. Nonetheless, if we are to move higher from the current levels, it is likely that we will need to see institutions re-enter the market. We would not be surprised to see choppy price action until after the New Year.

Today’s Watchlist:


Shares = 1,000
Trigger = 20.11
Stop = 19.67
Target = 21.90
Dividend Date = n/a

Notes = see commentary from 12/27


Shares = 70
Trigger = 90.66
Stop = 85.80
Target = 99.70
Dividend Date = n/a

Notes = see commentary from 12/23

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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  • Per intraday alert, bought IWM with a tight stop. We either want to be right or right out.
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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader