Commentary:
For the second consecutive day Stocks closed modestly higher. After an early morning dip, the broad market recovered and finished the session near the day’s high. The Nasdaq and the S&P MidCap 400 led the advance, as both indices posted a 0.6% gain. The S&P 500 and the Dow Jones Industrial Average both gained 0.3%, while the small-cap Russell 2000 posted a 0.2% improvement.
As has been common lately, market internals ended the session mixed. In Friday’s session turnover on the Big Board dropped by 9.0%, while it increased by a modest 1.5% on the Nasdaq. The ratio of advancing volume to declining volume was 2.1 to 1 on the Nasdaq, and 1.1 to 1 on the NYSE.
On Friday, both FDN and PALL hit their triggers and we entered both long positions. FDN performed well on Friday, as it closed near the high of the day on a nice pop in volume. On the other hand, PALL showed early promise but fell victim of a false breakout and closed near the low of the day.
The PowerShares Listed Private Equity ETF (PSP) is on the cusp of a possible move to higher ground. A rally above $11.27 may signal a buying opportunity for PSP. We have PSP on the radar but we are hesitant to make an official call, since false breakouts (to new highs) have been common lately.
On Friday, the iShares Russell Microcap Index ETF (IWC) saw a bullish inside day (Friday’s candlestick traded within the range of the previous day’s candlestick) accompanied by a contraction in volume. This combination of price and volume movement is often a bullish signal. A move above the three day high of $50.72 could result in further upside for this ETF.
After losing support of the 20-day EMA, the 50-day MA and the uptrend line, the Schwab Emerging Markets Equity ETF (SCHE) has rallied back into resistance at these key moving averages. A drop below the four-day low of $24.90 could present a short trigger for SCHE (if your broker does not have shares of SCHE to short an alternative could be to short VWO or go long the inversely correlated EUM).
The week ended with the Dow and the S&P 500 at new highs, while the Nasdaq, the Russell 2000 and the S&P Midcap 400 all basically remained in their respective trading ranges. We expect to see further buying in the market with emerging market ETFs being one notable exception.
Today’s Watchlist:
IJT
Long
Shares = 150
Trigger = 74.47
Stop = 72.79
Target = 77.85
Dividend Date = n/a
Notes = see commentary from Feb. 2 report
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
- Since UNG closed near our stop we will be using a modified version of our gap rules to avoid a potential shakeout on the open. The new stop will either be 7 cents below 20-minute low or 5.79, whichever is lower.
- FDN and PALL setups triggered on the long side. We cut the share size of IJT in half to avoid going over our $100,000 buying power.
- 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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Notes:
Edited by Deron Wagner,
MTG Founder and
Head Trader