No Good Rally Goes Unpunished (FXP)


Stocks slid sharply on Thursday but on mixed trade. All five major indices gapped higher at the open, reversed at the 10 minute mark and slid haplessly into the close. Higher beta issues led the plunge as the small-cap Russell 2000, S&P MidCap 400 and Nasdaq fell by 2.6%, 2.2% and 2.0% respectively. The S&P 500 slid 1.6% while the Dow Jones Industrial Average ended the session 1.5% lower.

Market internals ended mixed for a second consecutive day. Turnover fell on the Nasdaq by 4.4% but increased on the NYSE by 7.1%. Declining volume ruled the day as it overpowered advancing volume by a factor of 3.5 to1 on the NYSE and 8.2 to 1 on the Nasdaq. The combination of higher volume and higher declining volume points to institutional distribution on the NYSE. The same cannot be said for the Nasdaq as volume was lower.

Yesterday, on a spike in volume the ProShares UltraShort Oil & Gas ETF (DUG) gapped down, undercut its 20-day EMA and reversed to close near the session high. A move back above $35.35 could present a long opportunity in this ETF.

Since its breakout move in early August the ProShares UltraShort FTSE China 25 ETF (FXP) has been consolidating along its 20-day EMA. Further, this ETF has seen a contraction in price action during this time frame. Yesterday, FXP gapped down and tested support of the 20-day EMA before it reversed and closed in the upper third of its intraday range. A move back above yesterday’s high of $34.70 may provide a long entry trigger for FXP. We are monitoring this setup closely for a possible long entry.

Yesterday we entered a long position in the inverse ETF, BZQ. Trade details are available to our subscribers in the open position section of the newsletter. The market continues to struggle in its attempt to build some positive momentum. After a meager two day rally the broad market was met with significant selling pressure yesterday. As a result many short setups presented themselves in our nightly research. Bears continue to set the tone for the market.

Today’s Watchlist:

There are no new official setups this morning. 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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  • Per intraday alert, we bought BZQ.
  • 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.
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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader