Don’t Have A COW If the Selling Continues


Stocks closed lower on Wednesday on mixed volume. Stocks were slightly higher to flat for most of the session before succumbing to late session selling. All five major indices closed in the red with the small-cap Russell 2000 sustaining the most damage. The Russell shed 1.2% on the day. The Nasdaq, S&P 500 and Dow Jones Industrial Average all slid 0.7% while the S&P MidCap 400 lost 0.5%.

The day ended with market internals mixed. Volume rose on the NYSE by 2.0% but fell on the Nasdaq by 13.3%. Declining volume outpaced advancing volume on both exchanges. The spread ratio ended the day in favor of declining volume by a factor of 2.4 to 1 on the NYSE and 1.5 to 1 on the Nasdaq. Wednesday’s volume data suggests institutional involvement in the selloff on the NYSE but not on the Nasdaq. Consequently we would classify yesterday as a distribution day on the Big Board.

In the June 20th Newsletter we stated, “The iPath DJ-UBS Livestock Total Return Sub-Index ETN (COW) recently lost support of its 10 month uptrend line on May 3rd and sold off sharply. Over the past two weeks COW has recovered from the lows but is now at resistance of its 50-day MA, 200-day MA and the former uptrend line. Now that COW is testing resistance we will be watching carefully for a reversal candle and other signs that the downtrend may continue.” Yesterday COW gapped down and closed near session lows just below its 200-day moving average. A move below the two day low of $30.04 provides a potential short entry trigger for this ETF. We are placing COW on the watchlist. Trade details are available to our subscribing members in the watchlist segment of the newsletter.

The ProShares Short Financials ETF (SEF) gapped up yesterday but just as quickly, sold off and undercut its 200-day MA. However, by the day’s end SEF had reclaimed support of its 200-day MA and closed near session highs. A move back above yesterday’s high of $37.40 may provide a buying opportunity in this ETF.

For the moment the recent rally appears to be short lived. As of this writing both the Nasdaq and S&P Futures are down 0.4%. When combined with yesterday’s late session sell off, we have to assume for the moment that the downward pressure on the market will likely continue.

Today’s Watchlist:


Shares = 700
Trigger = 29.99
Stop = 30.65
Target = 28.44
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

    position summary

    Having trouble seeing the position summary graphic above?
    Click here to view it directly on your Internet browser instead.


  • No new positions were established yesterday.
  • 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