On Thursday, the markets completed a second consecutive day meandering in a tight trading range. All of the major indices struggled to close about flat for the day. The Dow Jones Industrial Average, S&P 500 and the small cap Russell 2000 all closed down 0.2%. The S&P MidCap 400 closed down, but only lost 0.1% in Thursday’s trading. The Nasdaq was the only major index to advance, as it eked out an increase of 0.1%. The range bound price activity witnessed over the past two trading days, is not uncommon, following a strong rally as witnessed on Tuesday. The market appears to be, “catching its breath”, before attempting another push to higher ground. In a day of mixed trading, the strongest sectors were Consumer Discretionary, Healthcare and Utilities. The weakest sectors on Thursday were Materials, Energy and Financials. As discussed earlier this week, we are keeping a close eye on the financial sector, as its next move could hold the key to another advance
Turnover dropped on both the NYSE and Nasdaq. Nasdaq volume was off 12%, while volume on NYSE fell by 5.0% on the day. On the Nasdaq, advancing volume outpaced declining volume by a ratio of 1.9 to 1. On the NYSE, declining volume edged out advancing volume by a factor of 1.4 to 1. Thursday’s internals provide another indication that the market is consolidating for another rally.
As noted in the September 21st newsletter, the iShares Dow Jones US Medical Devices Index (IHI) has been lagging the current market rally. To date, divergence from the broad market continues for this ETF. Although IHI has been consolidating, it has still been unable to challenge the 200 day simple moving average. Below is a comparison of September 21st versus yesterday’s trading action in IHI. Again, with the next correction in the market, IHI should present a good shorting opportunity.
The iShares ESCI Sweden Index Fund (EWD) is setting up for a potential long entry. For the past 6 days, it has been consolidating at the 12 month highs. EWD is seeing increased volume, as it has already traded 1/3 of September’s volume in the first 5 trading days of this month. A burst above Thursday’s high of 29.48 should carry this ETF to the May 2008 high of $33.42. EWD would also be a potential long play on a pullback that fills the gap formed between October 4th and 5th. This gap corresponds closely to the up trending 20 day exponential moving average. If the gap is filled, it would not be unexpected to see EWD “cut” just below the 20 day EMA, sweep the stops, and reverse to continue the rally.
There are no new setups in the pre-market today. However, now that the major indices have broken out above their multiweek ranges, we are monitoring for new long entries that provide a positive reward-risk ratio for entry near current prices. If we enter anything new, we will promptly send an Intraday Trade Alert with details.
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.
- Per intraday alert, the new stop in YCS is 16.10.
- On October 1, EMB paid a dividend of $0.445 per share. The distribution has been included in the “Points” and “Unrealized P&L” columns.
- 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