ETFs and market commentary:
Stocks moved higher yesterday but on mixed trade. All five major indices closed well in the black with higher beta stocks showing the most strength. The small-cap Russell 2000, S&P MidCap 400 and Nasdaq tacked on gains of 1.3%, 1.2% and 1.2% respectively. The S&P 500 closed up 1%. The Dow Jones Industrial Average lagged on the session, as it rose by a modest 0.6%.
Internals put in a mixed performance. Volume rose 2.3% on the Nasdaq but slid just shy of 1% on the NYSE. However, advancing volume easily outpaced declining volume on both exchanges. By the closing bell, the spread ratio stood at a plus 5.2 to 1 on the NYSE and a plus 2.3 to 1 on the Nasdaq. The higher volume accompanied by the higher advancing volume led to an accumulation day on the Nasdaq. The NYSE did not earn an accumulation day due to the lighter total volume on Thursday for this index.
The iShares Russell 2000 Index ETF (IWM) is now at a critical crossroad, as it approaches resistance of both its 20-day EMA and the lows of its prior trading range. The small-cap index needs to get back into the prior trading range over the next few sessions or it could be in jeopardy of making another move lower. However, also notice on the weekly chart (second chart below) that IWM has, thus far, formed a nice reversal on the week. The weekly charts for all of the other indices are also showing the same reversal pattern. We would like to see the Russell “catch up” to the other indices as this would increase the odds for another move higher. Looking at different timeframes is important when analyzing market conditions.
SRS traded in a tight range on Thursday and showed relative strength as it closed higher. Nonetheless, if we trade below yesterday’s low of $31.84 we may consider exiting the position. XLU continues to trade in a tight range and may now offer an alternative entry just above the February 27th high of $35.12. Although this in not the official entry for XLU, we may consider entering a partial position above this mark. We will send an intraday alert should we decide to enter early. The market has shown signs of resiliency over the past two sessions in light of the big distribution day on Tuesday. However, we still remain cautious because the two day recovery has been on much lighter volume than Tuesday’s selloff. Both Wednesday’s and Thursday’s volume came in well below the 50-day volume moving average. Our overall outlook for the market remains bullish but we are mindful of further distribution days.
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.
- 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.
We added one new long position via intraday alert yesterday. SWI pulled back and undercut the 20-day EMA, forming a decent reversal bar on March 6. For those who were unable to act on the intraday alert, SWI is still in play with an entry 10 cents above the March 8 high (using the same stop listed in the open positions section).
Our scans continue to produce solid setups, which is a good sign for the health of the market. With the Nasdaq and S&P 500 running into a little bit of resistance yesterday, the short-term plan is to lay low and see how the market holds up over the next few days. If the market refuses to correct and moves higher on heavier volume, then we will look to buy stocks breaking out from bullish patterns. If the market does correct and the selling is contained, then we should see a handful of lower-risk pullback entries develop.
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 SWI. For those who missed the alert, set a buy stop order 10 cents above the March 8 high. Wait for the price action to get above this level as confirmation.
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