Distribution on the S&P – (SLV)


Stocks plummeted on Tuesday erasing Monday’s gains. The market gapped down at the open and closed near the dead lows of the day. All five major indices ended in the red. The small-cap Russell 2000 led the retreat as it plunged 3.0%. The S&P MidCap 400 dropped 2.4% while the Nasdaq followed closely as it fell 2.3%. The S&P 500 slid 2.0% and the Dow Jones Industrial Average shed 1.7%.

Market internals ended mixed for a third straight day. Volume fell on the Nasdaq by 2.3% but surged on the NYSE by almost 9.0%. However, declining volume led advancing volume by a factor of 10.4 to 1 on the NYSE and 4.9 to 1 on the Nasdaq. Because of the higher volume, yesterday qualifies as a distribution day for the NYSE.

Yesterday, via intraday alert, we entered a long position in the iShares Silver Trust ETF (SLV) as it rallied above resistance of its 20-day EMA on a big spike in volume. Trade details are available to our subscribers in the open positions segment of the newsletter.

The iShares MSCI U.K. Index Fund (EWU) formed a reversal candle and closed near session lows on higher volume yesterday. A drop below yesterday’s low of $16.48 could present a shorting opportunity in this ETF. We are placing EWU on the watchlist. Trade details are posted in the watchlist section of the newsletter for our subscribers. For those who cannot enter short positions, the ProShares UltraShort MSCI Europe (EPV) provides a reasonable proxy for EWU.

The distribution day on the S&P 500 is concerning as it casts some doubt on the overall health of the market. As mentioned in yesterday’s newsletter, we expected a pullback from the current levels, but a pullback on increasing volume is never a good sign. Still, the Nasdaq did not see a distribution day yesterday and that is positive. Because of yesterday’s price and volume action on the S&P, for the moment, we’re shifting our market opinion from modestly bullish to neutral.

Today’s Watchlist:


Shares = 800
Trigger = 16.42
Stop = 17.04
Target = 15.40
Dividend Date = n/a

Notes = See commentary above

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 SLV on a breakout above the 20-day EMA.
  • 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.
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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader