today’s watchlist (potential trade entries):
Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Net P/L figures are based on two separate $50,000 model portfolios (one for ETFs and one for stocks). Changes to open positions since the previous report are listed in a pink shaded cell below. New entries are shaded in green cells. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits.
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ETF position notes:
- KBE was removed from the watchlist.
stock position notes:
- ORCL short entry triggered.
- MDVN stop triggered and we are out with a small loss.
- TISA stop on full position is now at 4.35.
SPECIAL NOTE: Just to clarify, in case there was any confusion, there will NOT be a reduction in the number of trade setups provided with our service. The plays will simply be listed in the “today’s watchlist” section every day rather than entered without notice in the middle of the trading day. As always, the number of trades entered will depend on market conditions.
ETF and broad market commentary:
Stocks gapped down yesterday but closed well off session lows on light trade. All five major indices ended the session in the red. The small-cap Russell 2000 led the decline, as it fell 1.5%. The S&P MidCap 400 slid 1.1% while the Nasdaq posted a 1.0% loss. Both the S&P 500 and the Dow Jones Industrial Average fell 0.8% on the session. With the exception of the Nasdaq, all of the major indices managed to hold their recent swing lows (April 10th swing lows).
Market internals were mixed on Monday. Volume fell on the Nasdaq by 7.2% and on the NYSE by 19.7%. Declining volume overpowered advancing volume by a ratio of 5.5 to 1 on the NYSE and 4.7 to 1 on the Nasdaq. Due to the light volume, both exchanges avoided a distribution day.
Over the past several weeks, the Market Vectors Vietnam ETF (VNM) has demonstrated excellent relative strength, as it has been one of the few ETFs to hold support of its 20-day EMA during the recent round of selling pressure. Yesterday, VNM undercut, but managed to reclaim support of its 20-day EMA. If VNM can form a reversal candle or post an “inside day”, it could present a possible buying opportunity particularly if the market finds support at the current levels.
Yesterday, on an uptick in volume, the Direxion Financial Bear 3x Shares (FAZ) gapped up but found resistance at its 50-day MA. A move above yesterday’s high of $23.44 could provide a buy entry trigger for this ETF. FAZ offers a more conservative buy entry point over the April 10th high of $23.78.
SOXS found resistance at the March 6th high of $39.71 but held its morning gap. DUST traded as high as $56.53 but closed three points off its high. EPU narrowly missed hitting its stop and closed in the upper third of its daily range. The price action we saw in SOXS and DUST was common for a big gap day. Quite often, when securities gap significantly, they spend the remainder of the day in consolidation mode. This is precisely the price action we saw in both of these ETFs. The Nasdaq lost a key support level yesterday (2,976) and it now appears likely that the tech-rich index may need to build a base if it is to move to higher ground. If the S&P 500 loses its April 10th swing low of 1,357, the broad market could easily see a more protracted sell-off.
We added one new short position yesterday in ORCL. We liked the stalling action around 29.50 along with last Friday’s ugly reversal bar:
With the broad market averages setting (or about to set) new swing lows we must be patient on the long side and wait for the price action to stabilize. Our short-term plan is to take advantage of short setups when available and slowly build a relative strength watchlist.
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