today’s watchlist (potential trade entries):
Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Net P/L figures are based on two separate $50,000 model portfolios (one for ETFs and one for stocks). Changes to open positions since the previous report are listed in red shaded cells below. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits.
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ETF position notes:
- No trades were made.
stock position notes:
- FFIV and TKR were closed at market on the open. MT short entry triggered.
ETF and broad market commentary:
Equities moved higher on Thursday on higher trade. The small-cap Russell 2000 had the best performance yesterday, as it tacked on an impressive 1.3%. The Dow Jones Industrial Average added 1.2%, while the S&P 500 improved by 1.1%. The S&P MidCap 400 tacked on 0.8% while the Nasdaq exhibited the most relative weakness, as it posted a modest 0.6% gain.
Internals ended the session on a bullish note. Volume increased by 1.8% on the Nasdaq and 8.0% on the NYSE. Advancing volume outperformed declining volume on the NYSE by a factor of 4.0 to 1 and on the Nasdaq by a more modest 1.3 to 1. Both exchanges posted an accumulation day, as evidenced by the positive price action and uptick in volume.
Yesterday, on a burst of volume, the iShares Nasdaq Biotechnology ETF (IBB) undercut its 20-day EMA but reversed to close near session highs. A move above the three day high of $123.94 could provide a buy entry trigger in this ETF. We are placing IBB on the watchlist. Trade details are available to our subscribers in the watchlist section of the newsletter.
Neither of our watchlist candidates triggered yesterday (DUG, MWN). We are keeping both on the watchlist since they both remain in their respective six day trading ranges. The battle between bulls and bears continues. Following Wednesday’s bearish distribution day, the price action shifted in favor of the bulls yesterday. All of the major indices remain in their respective six day trading ranges. The S&P MidCap 400 and the small-cap Russell 2000 continue to lag the other indices and the DJIA is showing the most relative strength. Yesterday, the Dow rallied above the five day range before re-entering its trading range into the close. The market has been winding up like a top over the past three days, and we would not be surprised to see resolution of the standoff between bears and bulls on Friday.
The market has produced two solid 1% accumulation days this week. The Nasdaq ran 1.2% higher with increased volume on June 12 and the S&P 500 closed up 1.1% on heavier volume yesterday. While we do not have an official buy signal in the market, we have seen enough evidence to suggest that the market is beginning to stabilize. As such, we are placing two buy setups on the watchlist (LF and AMLN). AMLN is trading in a very tight range on declining volume. The stop is very tight at just under 3%, so this is an ideal setup to test the water on the long side.
Both trades are sized for a $200 loss, which is less than half of our $500-$600 max loss rule. Reduced position sizing is key until conditions improve!
Top long candidates we are monitoring: LQDT AFFY AVD AMLN CRAY SWI LF EQIX HSTM WWWW MDSO SXCI VVUS ALXN CERN ATHN EBAY
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relative strength watchlist:
Our 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. This list is comprised of the strongest 100 (or so) stocks in the market over the past six to 12 months. The scan is updated every Sunday, and this week’s RS Watchlist can be downloaded by logging in to the Members Area of our web site.