--> Options Expiration Tranquility

Options Expiration Tranquility


Commentary:

Equities closed higher on options expiration Friday but on mixed trade. Although all five major indices closed in positive territory they all finished lower for the week. The tech-rich Nasdaq showed the most strength as it gained 1.0% yesterday. The small-cap Russell 2000 posted a 0.9% gain while both the S&P MidCap 400 and S&P 500 improved by 0.6%. The Dow Jones Industrial Average posted a modest gain of just over 0.3%.

Market internals ended the session mixed. Volume rose by 15.2% on the Big Board but slipped 6.6% on the Nasdaq. Advancing volume edged out declining volume on the NYSE by a ratio of 1.3. On the Nasdaq the ratio fell in favor of advancing volume but by a wider margin of 2.9 to 1. The increase in volume combined with a positive spread ratio suggests institutional accumulation on the NYSE. The same cannot be said for the Nasdaq as volume fell on higher beta index.

A quick review of the 60-minute chart of both the S&P 500 ($SPX.X) and the Nasdaq ($COMPX) shows that we stabilized and rallied into the four day downtrend line on both indices on Friday. Both exchanges now have established support at the two day low and resistance at the three day high. A move above or below these key levels will likely determine the next significant move in the market. We will be watching the sixty minute chart carefully over the next several days.



The iShares MSCI South Korea Index ETF (EWY) has been consolidating for the past three days at support of the 20-day EMA and 50-day MA. A move back above the two day high of $66.06 could provide a long entry trigger for EWY. We are placing EWY on the watchlist. Trade details are available to our subscribers in the watchlist segment of the newsletter.


All in all, options expiration Friday was a lackluster day on Wall Street. Typically heavy volume follows options expiration but Friday provided an exception. For the past four sessions the S&P 500 has managed to undercut but nonetheless hold onto critical support of the 20 and 50 day moving averages. If the broad market can hold this key mark we expect to see a move higher early in the week.


Today’s Watchlist:

EWY
Long

Shares = 300
Trigger = 66.14
Stop = 64.83
Target = New highs
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

position summary

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Notes:

  • No new 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 [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

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