Moving Higher But Be Careful? – (XRT) (FXD)


On whipsaw price action, stocks rallied strongly after early session selling, to close near the highs of the day. The day began with the market gapping higher followed by sharp selling in the first half hour of trade. However, stocks recovered quickly and rallied virtually the entire day and surged into the close. All five major indices closed well in the black with high beta issues leading the charge. By the closing bell the small-cap Russell 2000, S&P MidCap 400 and the Nasdaq were up 2.5%, 2.4% and 2.2% respectively. The S&P 500 tacked on 1.9% while the Dow Jones Industrial Average finished 1.8% higher.

Market internals were bullish on Thursday. Volume increased on the Nasdaq by 9.2% and on the NYSE by 10.4%. Further, advancing volume outperformed declining volume by a factor of 5.5 to 1 on the NYSE and 3.5 to 1 on the Nasdaq. The higher volume and strong price action into the close suggest that institutions were actively buying. Thursday was a clear accumulation day on Wall Street.

Our watchlist candidate, PPH, hit its trigger price yesterday and we entered the trade. PPH performed well yesterday and by the close we were up about 0.7%. Via an intraday alert we also entered a long position in the SPDR S&P Retail ETF (XRT). We liked the trade because XRT had formed a reversal candle on Wednesday after early session selling pressure. XRT offered a reasonable risk/reward entry just above Wednesday’s high. Trade details are available to our members in the open positions section of the newsletter.

The First Trust Consumer Discretionary AlpaDEX ETF (FXD) appears ready for another move higher. Since losing support of its 200-day MA on November 1st, FXD has undercut and tested support of its 20-day EMA twice but both times managed to rally and close near session highs. A volume assisted move back above yesterday’s high of $20.59 could provide a buying opportunity in this ETF.

The market continues to demonstrate resiliency. In the face of overwhelmingly negative news it continues to consolidate near the highs of this recent run. Nonetheless, as stated in yesterday’s newsletter, we must remain keenly aware that a significant number of distribution days have occurred over the past two weeks and it would only take two or three more days of distribution over the next two weeks to put the current rally in jeopardy.

Today’s Watchlist:

There are no official setups for today. As always, 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

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  • PPH triggered the buy entry after the first five minutes of trading. Per intraday alert, the XRT buy stop 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.

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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader