ETFs and market commentary:
Stocks recovered from Wednesday’s poor performance but on light trade. All five major indices closed up on the day but for the most part, off session highs. After recapturing most of Wednesday’s losses, the small-cap Russell 2000 plunged in the afternoon session and closed near session lows. After being up over 1.5% the Russell end up posting a meager 0.5% gain. The DJIA suffered a similar fate as it added 0.2% and closed near the day’s low. The S&P 500 tacked on 0.6%, while the S&P MidCap 400 rose 0.8%. The Nasdaq closed higher by 0.7%. Homebuilders and airlines showed relative weakness, while financials, transportation and gaming all outperformed.
Internals ended the session mixed. Turnover dropped by 10.2% on the Nasdaq and 12.8% on the Big Board. Still, advancing volume outshined declining volume by a factor of 2.4 to 1 on the NYSE and 1.7 to 1 on the Nasdaq. The selling into strength yesterday and the fact that the Russell 2000 was pummeled into the close is cause for concern. If volume were higher, we would have been inclined to label yesterday as a distribution day. At a minimum, the lack of follow through in the market is making it quite difficult to trade.
Over the past two sessions, the iPath Dow Jones AIG Commodity ETN (DJP) has formed back to back reversal candles, as it has tested support of its 10-day and 20-day moving averages. A move above the two day high of $44.69 could present a buying opportunity in this ETF. We are placing DJP on the watchlist. Trade details can be found in the watchlist portion of the newsletter.
PPH closed near session highs yesterday but on unimpressive volume. If PPH begins showing signs of weakness we may look to close the position. Profits have been hard to come by over the past few sessions and we are therefore inclined to take profits quickly due to the lack of follow through in the broad market.
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 had quite a busy yesterday, as we closed out all open stock positions to lock in some gains and limit our losses. In Thursday’s report we provided several reasons why we wanted to take a break from establishing new positions when we already had 70% long exposure (as of Wednesday’s close). The main reason being that our stocks have not acted well the past few weeks and have struggled to follow through past an initial surge of 3-5%. We made a judgement call to use yesterday’s bounce in the market to exit long positions such as IACI and N with a profit, while limiting losses in LKQX and CELG. GBX and CONN were sold with small scratch gains.
Those who were unable to sell positions intraday can sell at the open on Friday morning. More aggressive traders could hold on to N, IACI, CONN, and GBX with breakeven stops and/or reduce share size by half or a third. If you decide to hold these positions look for targets of 7-10% from the entry point. Do not try for outsized gains in this market.
By going to cash (on the stock side) we can take a quick step back and evaluate the market without any bias. That being said, we could re-enter the market as early as tomorrow if we feel that a setup is above average. If we decide to re-enter the market we will limit the exposure to one or two long positions.
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, closed all open stock positions.
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