Continued relative strength in JP Morgan Alerian MLP Index (AMJ)


A roller coaster ride of a session concluded with the major indices finishing lower across the board yesterday. After opening substantially lower, stocks managed to claw their way into positive territory by mid-day, but the bears resumed control in the afternoon, causing stocks to slide back down and settle near their intraday lows. The Dow Jones Industrial Average lost 0.7%, as the S&P 500 and S&P MidCap 400 indices declined 0.8%. The Nasdaq Composite exhibited relative strength by staying in the plus column for most of the day, but it ultimately fell victim to the broad market selling pressure and closed 0.3% lower. Conversely, the small-cap Russell 2000 showed relative weakness, with the index shedding 1.20%. It was the third consecutive day the broad market lost ground, making it the longest “losing streak” in approximately a month.

Total volume in the NYSE was on par with the previous day’s level, as turnover in the Nasdaq eased 10%. The lighter volume “down day” was positive, as it prevented the S&P and Nasdaq from registering another bearish “distribution day.” In the NYSE, declining volume outpaced advancing volume by 3 to 1. Declining volume also exceeded advancing volume on the Nasdaq, but at a more moderate ratio of 3 to 2. Despite the losses, market internals over the past three days have not been negative enough to suggest a change in trend has occurred.

As the main stock market indexes have moved lower over the past three sessions, the JP Morgan Alerian MLP Index (AMJ) has demonstrated relative strength by holding near the high of its consolidation. [NOTE: For traders not familiar with AMJ, it tracks the performance of the energy MLP (Master Limited Partnership) sector. Click here to download a factsheet from the JP Morgan web site, which more clearly explains this ticker.] Since its inception, AMJ has been in a solid uptrend, and there are presently signs this ETF is still being accumulated. As mentioned, AMJ has exhibited relative strength to the broad market over the past 3 days. In addition, the volume on the “up” days has been strong over the past week. Since early July, AMJ has also been consolidating in a tight, sideways range, near its highs (which is bullish). Additionally, the Accumulation/Distribution line has remained flat, even during high volume selling days, for the past two months. Although this ETF is presently not on our watch list, a rally above the September 22nd high could present a buying opportunity. The daily chart of AMJ is shown below:


Yesterday’s broad-based decline caused the S&P 500 to slip back below the important 1130 mark discussed in our September 21st commentary. However, it’s too early to declare a bearish failed breakout, as the past three days of selling have not been met with a spike in volume that would imply a trend reversal. Nevertheless, the major indices are at an important crossroad that presents the possibility of a trend change if further losses are sustained. Still, if stocks find support at yesterday’s lows, and consolidate from here, odds are good the recent uptrend will remain intact. As we have stated several times over the past week, caution is advised right now.

Today’s Watchlist:

There are no new setups in the pre-market today.

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.


  • Per Intraday Trade Alerts, we made a judgment call to cut the loss on SSG ahead of the original stop. It now appears as though the $SOX Index is losing its relative weakness, and is poised to snap back above its 50-day MA. Even weak sectors will eventually move higher with enough buying pressure from the broad market.
  • 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.
    Have you had your free 1-month trial to Morpheus Trading Group’s additional ETF and stock trading newsletters?

      Edited by Deron Wagner,
      MTG Founder and
      Head Trader