Commentary: 

Stocks ended the day mixed on light trade. Following Wednesday’s explosive move higher, the major indices spent yesterday consolidating near the previous day’s highs. The Nasdaq was the only index to end the session higher, as it posted a modest 0.2% gain. The small-cap Russell 2000 fell 0.9% while the S&P MidCap 400 slid 0.6% on the session. Both the Dow Jones Industrial Average and the S&P 500 posted small losses of 0.2%.

Market internals also ended the session mixed. Turnover dropped sharply on both exchanges. By the closing bell volume on the Nasdaq was down by 24.0% and on the NYSE by 32.1%. Declining volume slightly outpaced advancing volume on the NYSE by a ratio of 1.4 to 1. However, advancing volume edged out declining volume on the Nasdaq by a factor of 1.3 to 1. Yesterday’s price and volume action was typical for a market coming off of a big reversal day.

In Thursday’s newsletter we stated that AGA may present a buying opportunity with, “…an undercut of the 20-day EMA”. Yesterday, on an expansion in volume, AGA formed a reversal candle as it undercut its 20-day EMA and rallied to end the session in the top third of its trading range. A move back above Thursdays high of $19.71 could provide a buy entry trigger for AGA.

The United States Oil Fund ETF (USO) has demonstrated excellent relative strength over the past several weeks. While the broad market struggled to regain support of the 200-day MA, this ETF reclaimed and maintained support of this key moving average. A move above the two day high of $39.25 could present a buying opportunity in this ETF.

In the wake of a big breakout day, the markets performed as might be expected yesterday, as they consolidated at the two day high. This type of price action is typical for a market preparing for a move higher. With the immediate fear of a European meltdown apparently in check, the broad market appears ready to make another move higher.

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Today’s Watchlist:

There are no new official setups for today. As always, we will send an intraday alert if any new trades are made.

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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

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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 support@morpheustrading.com if not already set up for this value-added feature we provide to subscribers.

Edited by Deron Wagner,
MTG Founder and
Head Trader