today’s watchlist (potential trade entries):
Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Net P/L figures are based on two separate $50,000 model portfolios (one for ETFs and one for stocks). Changes to open positions since the previous report are listed in a pink shaded cell below. New entries are shaded in green cells. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits.
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ETF position notes:
- SOXS setup triggered. The ETF portfolio is 30% long and 10% short (through SOXS inverted long).
stock position notes:
- Per yesterday’s commentary we lightened up (sold a half position) in DNKN, UA, and SWHC on the open. We also sold the remaining 350 shares of TISA on the open.
- NTES reports earnings after the close on May 16 (that is unconfirmed). We plan to be out by then with a 7-10% gain if the breakout is successful.
ETF and broad market commentary:
Stocks closed mixed on Wednesday on mixed trade. Both the Nasdaq and the small-cap Russell 2000 tacked on 0.3%, while the S&P MicCap 400 ended the session higher by 0.2%. The Dow Jones Industrial Average and the S&P 500 slid 0.1% and 0.3% respectively.
Internals ended the day mixed. Volume fell on the Nasdaq by 0.6% but closed higher on the NYSE by 2.3%. Advancing volume topped declining volume on the Nasdaq by a ratio of 1.4 to 1 but declining volume held the upper hand on the NYSE. By the closing bell, declining volume outpaced advancing volume on the Big Board by a factor of 2.1 to 1. The higher volume and higher declining volume on the NYSE suggests institutional selling and we would therefore classify yesterday as a distribution day on the NYSE. But for a late session rally, yesterday’s results could have been much worse.
Over the past month, on three separate occasions, the Market Vectors Indonesia ETF (IDX) has attempted to rally above the thirty dollar mark. Yesterday, on a burst in volume, IDX gapped down but reversed to close near session highs. A move above Tuesday’s high of $29.98 could present a buying opportunity in this ETF.
On May 1st, the ProShares Short MSCI Emerging Markets ETF (EUM) formed a reversal candle as it undercut support of its short term uptrend line and tested support of its 50-day May, before recovering to close in the upper third of its intraday range. A volume assisted rally above the four day high of $29.63 could provide a buy entry trigger in EUM.
At the open yesterday, SOXS triggered and entered the position. Both VNM and EPU struggled. EPU closed at the day’s low on higher volume. It now appears likely that EPU will hit its stop. However, after gapping down at the open, VNM managed to hold support of the 50-period MA on the hourly chart and eventually closed in the middle of its intraday range. The market continues to show signs of weakening. Nonetheless, one big accumulation day could change the complexion of things quickly. We remain cautious about the market and will continue to limit the number of trades we enter and keep position size small.
We are still opertating on a buy signal, but we haven’t seen much success with new entries and the S&P 500 has already logged two distribution days. A break of the 50-day MA in the S&P 500 along with another distribution day would more than likely force us to a 100% cash position.
We have two new buy setups on the watchlist today. One is to add to an existing position in SWHC over the highs, and the other is a new entry in NTES. The chart below details the NTES setup:
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