Potential breakout entry in (PSP)


Early morning selling gave way to a resilient market, as all but one of the major indices closed higher on Tuesday. Despite the market’s recovery there was some unusual divergence in the market. The S&P MidCap 400 ended the session 0.9% higher, but the small-cap Russell 2000 struggled its way to a flat finish. This is unusual since the two indices tend to be highly correlated. The Dow Jones Industrial Average and the Nasdaq both managed 0.4% gains, while the S&P 500 eked out a 0.1% improvement for the session.

Market internals ended the day mixed. Turnover on the Nasdaq was flat, while the NYSE saw a second consecutive day of strong volume. Volume on the Big Board finished 9.4% higher day over day. However, unlike Monday, declining volume was greater than advancing volume on the NYSE. The day ended with the ratio at 1.4 to 1 in favor of declining volume. On the Nasdaq, advancing volume was higher than declining volume by a factor of 1.5 to 1.

Our position in PBW performed well yesterday, as it set a new high on increasing volume. PHO continued to consolidate for a fourth consecutive day and appears poised for another advance. UNG, GDXJ and EPU all spent the day in correction/consolidation mode.

Yesterday we opened a long position in the PowerShares DWA Developed Markets Technical Leaders ETF (PIZ). We liked the trade because it gapped up on strong volume and held the opening gap (At the January 4th high). PIZ spent the entire day consolidating and closed near the day’s high. Trade details were sent to our members via an intraday alert and can be found in the watchlist segment of the newsletter. (Please note two corrections to yesterday’s newsletter: the description of PIZ was incorrectly referred to as Developing rather than Developed, and the potential trigger price for PIZ was referenced as $23.41 instead of $22.41. We apologize for the inaccuracies).

The Guggenheim Frontier Markets ETF (FRN) is exhibiting signs of relative weakness and may soon present a shorting opportunity. Yesterday, FRN sold off on a sizeable increase in volume. Further, since mid November, FRN has been consolidating while the Accumulation/Distribution line has been in a significant downtrend. This bearish divergence suggests institutional selling. A break below $23.50 could provide a short entry trigger for this ETF.

The PowerShares Listed Private Equity ETF (PSP) appears to be on the verge of breaking out of a 12-week consolidation pattern. A move above $11.22 may present a buying opportunity for this ETF.

We continue to maintain a bullish view of the market. However, exuberance seems to be on the rise, which is always of concern during a protracted bull move.

Today’s Watchlist:


Shares = 800
Trigger = 18.76
Stop = 17.94
Target = 20.60
Dividend Date = n/a

Notes = see commentary from Jan. 14th 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

    position summary

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  • Per intraday alert, we establish a long position in PIZ.

  • 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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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader