Potential breakout entry in the UltraShort 20+ Bond (TBT)


For the second consecutive day the market was met with heavy selling pressure and all five major indices closed in the red. However, a mid session rally pared what could have been major losses across the board. Even with the bounce, the technology rich Nasdaq, the S&P MidCap 400 and the small-cap Russell 2000 shed 0.8%, 0.8% and 1.1% respectively. The S&P 500 lost 0.1% in yesterday’s action. The Dow Jones Industrial Average demonstrated relative strength once again on Thursday. The Blue Chip index finished the day barely below the flatline.

Market internals reflected poorly on the overall health of the market. Volume was significantly higher on both the NYSE and the Nasdaq. Day over day, trade increased on the NYSE by 10.0% and on the Nasdaq by 9.3%. Declining volume was greater than advancing volume across the board, but the Nasdaq bore the brunt of the selling pressure. The tech heavy index saw declining volume outpace advancing volume by a ratio of 3.1 to 1, while the ratio on the NYSE ended the session at 1.1 to 1.

Several days ago we received an email from one of our clients asking for our evaluation of the ProShares UltraShort 20+ Year Treasury ETF (TBT). At the time we TBT did not meet our setup criteria. However, based on yesterday’s price and volume action we are now placing TBT on the watchlist. A move above Thursday’s high of $38.87 may provide a buying opportunity for this ETF. For our subscribing members, details of the setup can be found in the watchlist segment of the newsletter.

The Retail HOLDRs ETF (RTH) has demonstrated excellent relative strength over the past two days. On over two times its average daily volume, RTH rallied near the January 3rd high of $107.74 yesterday. A move above Thursday’s high of $107.47 could provide an entry target for RTH. We will send an intraday alert should we decide to take a position in RTH.

Over the past two trading sessions market leaders have come under serious selling pressure. Although it’s still too early to call a market top, waning leadership raises concern that a turn in the market may be close at hand.

Today’s Watchlist:


Shares = 300
Trigger = 39.97
Stop = 38.22
Target = 43.70
Dividend Date = n/a

Notes = see commentary above


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

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  • We are out of PHO with a smaller than average loss, as it triggered our stop at 10.52 yesterday after the open.

  • Per intraday alert, PIZ opened below its stop so the gap rules applied. We remain long PIZ with a stop placed 15 cents below yesterday’s opening 20-minute low.

  • 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