--> Market Faces Stiff Test This Week (SPY, QQQ, DIA)

Market Faces Stiff Test This Week (SPY, QQQ, DIA)

ETFs and market commentary:

Stocks meandered on Friday to end the session mixed. The session began on a positive note as stocks rallied but the afternoon session brought with it selling pressure and, for the most part, the day ended about flat. The small-cap Russell 2000 cooled off following Thursday’s big advance and ended the session down 0.3%. The Dow Jones Industrial Average closed fractionally lower, while the S&P MidCap 400 closed flat. Both the Nasdaq and the S&P 500 managed modest gains of 0.2%.

Internals were mixed on Friday. Volume was down on the 7.2% on the Nasdaq and 16.7% on the NYSE. However, advancing volume edged out declining volume on the NYSE by 1.1 to 1 and on the Nasdaq by 1.3 t 1. Not much useful information can be gleaned from Friday’s price and volume action. The broad market continues to consolidate and will likely need to see a spike in volume in order to move to higher ground.

Despite Thursday’s bullish accumulation day, the market was unable to muster any follow through on Friday. A brief review of the S&P 500, DJIA, Nasdaq, small-cap Russell 2000 and S&P MidCap 400 should help to shed some light on the current state of affairs in the broad market. The S&P has formidable resistance at 1,370 but also has strong support at 1,350 and 1,340. The DJIA has a key resistance level at 13,015. The Nasdaq is finding 2,965 a difficult threshold to cross as it failed to hold this key mark two of the past four days. The S&P MidCap 400 has struggled with the 990 level. Three times in the past six sessions, the mid-cap index has been unable to rally above this key mark. The Russell 2000 is, in our opinion, showing the best price action of all of the major indices over the past three weeks as it has been building a base during this entire timeframe. If the Russell can clear 833, it should see a significant rally.





PPH and IYM both triggered on Friday and we now have open long positions in both. IAU continued to consolidate near the highs of its recent breakout. Although we remain bullish on the market, we are keenly aware that all of the major indices are at key resistance levels. Should another distribution day creep into the market early this week, we may consider reducing our long exposure.

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

position summary

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

Notes:

  • PPH and IYM longs triggered. 
  • 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.

Stocks:

We got busy towards the end of last week, as new setups emerged from our relative strength scan. The Russell 2000 (chart is shown above in ETF section) continues to consolidate in a very tight range and could possibly breakout within the next week or two. A breakout in the Russell should give our portfolio a nice lift, as most of our trades are in the small to mid-cap arena.

IACI is on our watchlist but we are monitoring the action for a lower risk entry point:

Today’sStock 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:

  • Added RAX to the watchlist. CONN buy setup triggered. Note the new stop price in CELG. CELG should breakout from this point….if not we want to use a tight stop and simply re-enter if the setup doesn’t work out. We plan to add to our position in CELG over the two-day high.


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

Follow us on Twitter

Latest Tweets

@MorpheusTrading