today’s watchlist (potential trade entries):

open positions:

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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closed positions:

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ETF position notes:

• No trades were made.

stock position notes:

• No trades were made.

ETF and broad market commentary:

Stocks ended the session mixed on light trade. With the exception of the Nasdaq, all of the major indices ended the day higher. The small-cap Russell 2000 closed higher by 0.4%, while the S&P 500 rose by 0.3%. The Dow Jones Industrial Average tacked on 0.2% and the S&P MidCap 400 added a modest 0.1%. The Nasdaq, the day’s sole loser, closed fractionally lower.

Market internals were mixed yesterday. Volume slid on the Nasdaq by 2.9% and on the NYSE by 15.9%. Advancing volume topped declining volume by a ratio of 1.5 to 1 on the NYSE. However, on the Nasdaq, declining volume held the upper hand by a ratio of 1.5 to 1. Needless to say, yesterday was an uneventful day in the market.

Over the past five sessions, the Direxion Financial Bear 3x Shares ETF (FAZ) has been consolidating at support of its 20-day and 50-day moving averages. FAZ has also tested resistance at $23.70 three times in the past five weeks. A move above the two day high of $23.69 could present a buying opportunity in this inverse ETF. We are placing FAZ on the watchlist. Trade details are posted in the watchlist section of the newsletter.

Despite today’s higher finish, it is noteworthy that all of the major indices closed near session lows. The market continues to struggle as leadership stocks are being hit hard. Yesterday, CRM fell over 10% while PCLN dropped almost 6.0%. For the moment, more and more short setups seem to be developing and we are finding fewer and fewer potential long candidates during our nightly research. Our bias remains on the short side of the market but patience is required to allow setups to unfold.

stock commentary:

Not much has changed this week, as our timing model remains on a sell signal with the market showing no signs of life. A short-term bounce in the market could provide us with decent short setups, but until that happens we plan to lay low on the short side.

Below are a few more potential leadership stocks on our top watchlist. We will have a full watchlist available for scanning by next Monday.

If you are a new subscriber, please e-mail rick@morpheustrading.com with any questions regarding our trading strategy, money management, or how to make the most out of this report.