ETFs and market commentary:
Stocks ended the session mixed with four of the five major indices closing lower. The small-cap Russell 2000 was the day’s holdout as it posted a 0.2% gain. The Nadaq was the big loser on the session. The tech-rich index slid 0.9% yesterday. The S&P MidCap 400 and S&P 500 both dropped 0.4%, while the DJIA fell a modest 0.1%. For a second consecutive day oil services, coal, precious metals and transportation took a beating. Sectors showing relative strength included REITs, select financials, real estate and mortgage finance.
For the second time in as many sessions, market internals were mixed. Volume rose modestly on the NYSE but dropped 4.3% on the Nasdaq. However, declining volume topped advancing volume on both exchanges. By the closing bell, the ratio of declining to advancing volume stood at 2.1 to 1 on the NYSE and 2.9 to 1 on the Nasdaq. Because volume was light, the market avoided another distribution day.
Since January of this year, the S&P Select Utilities SPDR Fund (XLU) has been consolidating along its 20-day EMA in a tight range. Yesterday, for the second time in four sessions, XLU formed a distinct reversal candle, as it undercut its 20-day EMA but recovered to close near session highs. A move back above yesterday’s high of $35.11 could provide a buy entry trigger for this ETF. We are placing XLU on the watchlist. Trade details are posted in the watchlist section of the newsletter.
Yesterday, on a spike in volume, the iShares Dow Jones Select Dividend Index (DVY) formed a reversal candle after undercutting its 20-day MA, and recovering to close near the day’s high. A move back the two day high of $55.53 could present a buying opportunity in this ETF. We are monitoring the setup closely for a potential long entry.
Despite the market’s recent slide, only the small-cap Russell 2000 has lost a key support level. The S&P MidCap 400 momentarily lost support of its 20-day EMA yesterday but recovered to close near session highs. Yesterday’s selling was not broad based and we therefore maintain our bullish stance. We continue to look for buying opportunities into this pullback.
Today’s ETF Watchlist:
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 DailySubscriber Guide for important, automatic rules on trigger and stop prices
Having trouble seeing the position summary graphic above? Click here to view it directly on your Internet browser instead.
Notes:
- No trades were made. XLU was added to the watchlist.
- 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.
With the market potentially in pullback mode, we should see some decent buying opportunities develop later this week or early next week. We continue to see bullish patterns in our scans, so any pullback in the market should be short-term and buyable. We plan to remain mostly in cash (at least 70% – 80% cash) for the next few days and re-enter the market as setups develop.
Per intraday alert, we established a long position in CONN yesterday with reduced share size. This is not an obvious breakout entry to new highs (which have struggled to follow through as of late), so the setup should have a little more room to breathe.
Today’s Stock Watchlist:
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 model account size. Changes to open positions since the previous report are listed in red text below.
Having trouble seeing the position summary graphic above? Click here to view it directly on your Internet browser instead.
Notes:
- Per intraday alert, bought CONN just above 14.00.
Relative Strength Watchlist:
The Relative Strength (or RS) Watchlist makes it easy for subscribers to import data into their own scanning software, such as Tradestation, Interactive Brokers, and TC2000. The list is comprised of the strongest 100 (or so) stocks in the market over the past six to 12 months. The scan is based on the following criteria and is updated every Monday:
- Stock is in a well defined uptrend, trading above both the 50-day and 200-day moving averages, with the 50-day moving average above the 200-day moving average (both moving averages should be in an uptrend as well).
- Today’s close is less than 20% off the 52-week high
- Close is greater than $5.
- Volume is greater than 200,000 shares per day (using a 50-day volume moving average).
Click here to view this week’s Relative Strength Watchlist in excel
Click here to view this week’s Relative Strength Watchlist as a text file