Light Volume Necessitates Caution


Equities closed strong amidst light volume for the second consecutive day. Price action was impressive as all five major indices saw gains of 1.2% or more. The small-cap Russell 2000 led the charge by posting an impressive 1.8% gain. The tech rich Nasdaq and the S&P MidCap 400 both improved by 1.5% as the S&P 500 and the Dow Jones Industrial Average advanced by 1.3% and 1.2% respectively.

For the second day in a row strong price action was dampened by mixed internals. Volume was down across the board following a very light volume day on Monday. Turnover on the NYSE fell by almost 4.0% and on the Nasdaq by 2.1%. However advancing volume overpowered declining volume by a factor of 5 to 1 on both major exchanges. Tuesday’s mixed internals suggest a lack of institutional participation in the rally. Due to the very light volume we would not classify Tuesday as an accumulation on Wall Street.

EWM hit its buy trigger and then rallied to close at the high of the day. Trade details are available to our membership in the watchlist segment of the newsletter.

The broad market as measured by the S&P 500 is now at the key psychological resistance level of 1,300. If the S&P 500 find its way above this key mark then it will likely continue its advance to the 50-day moving average. If the S&P finds its way to this key mark we would expect it to be met with formidable resistance.

The iShares MSCI Italy Index ETF (EWI) has been in a massive sell off since early May. Since that time it has lost support of all of its key moving averages and has broken below a two year uptrend line. Although EWI has managed to keep pace with the market over the past two days, it has done so on very light volume. EWI now faces serious resistance at the convergence of its 20-day EMA, 200-day MA, former uptrend line and current downtrend line. A rally into these key marks could provide a shorting opportunity for this ETF.

The market continues to struggle with gaining volume momentum. If hundreds of stocks were breaking to new highs we would be less concerned with the unimpressive volume. However, in light of the recent sell off the market now has considerable overhead and strong volume is generally needed to reclaim former support levels.

Today’s Watchlist:

There are no new official setups for today. We will send an Intraday Alert if any new trades are made.

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

    position summary

    Having trouble seeing the position summary graphic above?
    Click here to view it directly on your Internet browser instead.


  • EWM triggered a buy entry after the first five minuts of trading.
  • 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.

    Have you had your free 1-month trial to Morpheus Trading Group’s additional ETF and stock trading newsletters?

      Edited by Deron Wagner,
      MTG Founder and
      Head Trader