Commentary:

Stocks closed lower on Tuesday on higher trade. For the second time in as many days all five major indices closed in the red. The Dow Jones Industrial Average led the decline as it shed 0.7% on the session. The S&P MidCap 400 and the S&P 500 fell by 0.6% and 0.4% respectively. The small-cap Russell 2000 fell by a modest 0.2% while Nasdaq slid fractionally.

Market internals were bearish on Tuesday. Volume increased by 8.6% on the Nasdaq and 9.4% on the NYSE. Declining volume held the upper hand on both exchanges. By the closing bell the Spread Ratio was at 1.6 to 1 on the NYSE and 1.2 to 1 on the Nasdaq in favor of declining volume. Tuesday’s internals point to a modest distribution day on both exchanges.

Over the past two weeks, the SPDR S&P Retail ETF (XRT) has been bullishly consolidating above its 20-day EMA. A volume fueled moved back above the July 21st high of $55.31 could present a buying opportunity in this ETF. We are placing XRT on the Watchlist. Trade details are available to our subscribing members in the watchlist segment of the newsletter.

The SPDR S&P Select Health Care ETF (XLV) has been consolidating in a tight trading range near its all time highs since May of this year. XLV is now in the midst of a pullback to the lower edge of this trading range. Should XLV hold support at the current level, it may provide a buying opportunity with a move back above the July 21st High of $31.79. We will continue to monitor this ETF for a possible long entry.

The market continues to struggle to find direction. Because of the choppy price action our daily scans are revealing few quality trading opportunities on either side of the market. We are patiently awaiting the next news out of Washington.

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Today’s Watchlist:

XRT
Long

Shares = 300
Trigger = 55.38
Stop = 53.85
Target = New swing high
Dividend Date = n/a

Notes = See commentary above

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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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Notes:

• Per intraday alert, we canceled the EPU trade as we were unable to locate shares to short in our account.
• 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 support@morpheustrading.com if not already set up for this value-added feature we provide to subscribers.

Edited by Deron Wagner,
MTG Founder and
Head Trader