Commentary:
Stocks closed mixed on Tuesday in modestly higher trade. Large cap issues underperformed as the Dow Jones Industrial Average slid 0.2% while both the S&P MidCap 400 and the S&P 500 closed fractionally higher. The Nasdaq added 0.7% and the small-cap Russell 2000 eked out a 0.6% gain.
Market internals were positive but far from impressive. Volume rose by 5.3% on the Nasdaq and 3.0% on the NYSE. Advancing volume edged out declining volume by a factor of 1.4 to 1 on the NYSE and 1.6 to 1 on the Nasdaq. We once again failed to post a follow through day in the market and market internals were not strong enough to suggest that institutions were actively accumulating shares.
Yesterday we entered a long position in PowerShares DB Crude Oil Double Short ETF (DTO) but in the afternoon session our stop was hit and we exited the trade. Subsequent to our exit, DTO reversed and rallied strongly to close near session highs. It is apparent from our quick exit that we set the stop a bit too tight in this trade. When a trade is not successful you must always be willing to re-enter the position in the event that a new setup presents itself. Remember, each trade stands of its own merits. We liked the late session price action in DTO and are therefore adding it to the watchlist. A move back above yesterday’s high of $63.63 should present a buying opportunity in this inverse ETF.
The ProShares UltraShort Real Estate ETF (SRS) is once again in play as a potential long candidate. A volume fueled moved above yesterday’s high of $16.79 may provide a quality long entry trigger for this ETF.
The current rally appears to be reaching a point of exhaustion but there are still only a few sectors that have begun to form reversal candles. If the last five days are all the market has to offer in terms of bullishness, it seems likely that market bears will soon gain control of the price action.
Today’s Watchlist:
DTO
Long
Shares = 150
Trigger = 63.74
Stop = 59.21
Target = 72.70
Dividend Date = n/a
Notes = See commentary above
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
- Per intraday alert, we entered DTO and stopped out late in the afternoon.
- 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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Notes:
Edited by Deron Wagner,
MTG Founder and
Head Trader