ETFs and market commentary:
Stocks closed lower across the board on Thursday on mixed trade. All five major indices closed in the red. The S&P MidCap 400 led the decline as it slid 1.1%. The small-cap Russell 2000 dropped 1.0%, while the S&P 500, Dow Jones Industrial Average and Nasdaq slid 0.7%, 0.6% and 0.4% respectively. Only twenty of the 103 sectors that we cover finished up on the day and only one sector closed more than one percent higher. The weakest sectors included coal, transportation, insurance and non ferrous metals.
Market internals once again ended the day mixed. Traded quickened on the NYSE by 6.8% but fell on the Nasdaq by 2.0%. Declining volume overpowered advancing volume on the NYSE by a ratio of 5.8 to 1. The damage was not as bad on the Nasdaq as declining volume topped advancing volume by just over 2 to 1. For the second time in as many days, the NYSE fell under distribution. However, the Nasdaq once again escaped a distribution day due to the light volume on the technology rich index.
Yesterday, on a significant uptick in volume, the S&P Select Industrial SPDR Fund (XLI) formed a reversal candle as it undercut support of the 50-day MA. A move above yesterday’s high of $37.25 could present a buy entry trigger for XLI. We will be monitoring this setup closely for a possible long entry.
Earlier this week we stated that UGA was showing relative strength as it consolidated along its 20-day EMA. Further we noted that UGA was setting a sequence of higher lows during this consolidation. It is also noteworthy that UGA has been consolidating as volume is contracting. This is generally considered a bullish signal. Yesterday, UGA once again tested and held support at its 20-day EMA. We like the price action and relative strength in this ETF and are therefore placing it on the watchlist. Trade details are available to our subscribers in the watchlist section of the newsletter.
All three of our open ETF positions gapped down but managed to close well off the session lows. Via an intraday alert we raised our stop on half (125 shares) or our position in UWM. Details on the new stop are posted in the open positions segment of the newsletter. We are removing EWZ from the watchlist since, due to poor price action, the setup is no longer valid. The EPU setup remains intact. Back to back distribution days on the NYSE certainly raise some concern. However, as long as the Nasdaq continues to hold up, there’s no reason to shift away from our bullish view on the market. It’s always of concern when both indices are selling in unison.
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:
- UWM is listed twice due to the split stop. EWZ was removed from the watchlist.
- 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.
Per intraday alert, we sold CONN in to strength to lock in a 12% gain. Those who did not exit CONN may do so on the open today. WCG stopped us out beneath the 5-minute low at 65.14. The stock portfolio showed relative strength yesterday, with most stocks ignoring the selling action in the market.
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, Sold CONN to lock in gains. WCG hit the stop and we are out. Per intraday alert, sold RGR on the open but bought back in a few minutes later at 45.80.
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