Time To Get Long? – (PCY) (PAZ)


After an opening gap up, stocks closed near session high amidst choppy intraday trade. All five major indices posted solid gains as the Dow Jones Industrial Average and small-cap Russell 2000 led the way with solid 2.3% gains. The S&P MidCap 400 rose 2.2% while the S&P 500 moved higher by 1.9%. The Nasdaq once again lagged but still managed a 1.5% gain.

Market internals were mixed as volume slipped on the Nasdaq by 2.4%. However, NYSE volume climbed by an impressive 18.6%. Advancing volume outpaced declining volume on the Nasdaq and the NYSE by 4.1 to 1 and 6.3 to 1 respectively. The NYSE posted another accumulation day as evidenced by the strong volume.

On October 20th, the PowerShares Emerging Markets Sovereign Debt ETF (PCY) formed a reversal candle as it overcut resistance at $27.00 on a significant spike in volume. Furthermore, PCY formed another reversal candle on Friday. A move back below the four day low of $26.83 could present a short entry trigger for this ETF.

The PowerShares Insured National Municipal Bond ETF (PZA) has recently undercut support of its long term trendline and key moving averages. PZA is not attempting to reclaim support of these key marks. A volume assisted move above Friday’s high of $24.06 could present a buying opportunity in this ETF. We will be monitoring PZA closely for a potential entrypoint.

On Friday, EUO hit its adjusted stop, and we exited the trade for a small loss. The market continues to demonstrate strength. However, we are approaching key resistance levels on all the major indices and they appear to be overextended. Consequently, we are inclined to wait for a pullback should we decide to enter any long positions.

Today’s Watchlist:

There are no new setups for today. As always, 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

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  • Per intraday alert, EUO triggered its stop beneath the opening 5-minute low for a small loss.
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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader