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
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Notes:
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:
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:
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
market timing model: BUY Signal generated on close of Sept. 21 Market timing model is…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…