Equities closed near the session highs on Monday amidst very light trade. Small and mid cap issues led the advance. The small-cap Russell 2000 and the S&P MidCap 400 posted impressive gains of 0.9% and 1.3% respectively. The Nasdaq, S&P 500 and Dow Jones Industrial Average all improved on the day but the gains were modest. The tech rich Nasdaq tacked on 0.6% while the blue chip DJIA and the S&P 500 advanced by 0.4%.
For the second time in as many days market internals ended the day mixed. Turnover dropped sharply on both major exchanges. Volume finished lower by 19.4% on the Nasdaq and by almost 25% on the NYSE. Still, advancing volume was greater than declining volume for the second straight day. The Advancing Volume to Declining Volume Ratio closed at 2.1 to 1 on the NYSE and 1.2 to 1 on the Nasdaq. Although positive, Monday’s move was far from impressive due to the complete absence of volume. The light volume clearly suggests a lack of institutional involvement in Monday’s advance.
Yesterday, via an intraday alert, we entered a long position in the iShares Silver Trust ETF (SLV). After four vicious days of selling this ETF found support at its 61.8% Fibonacci retracement. Further, on Friday SLV formed a double bottom which provides a clear stop for this trade. Due to the volatility in SLV we chose to take a small position with a wider than normal stop. Full trade details are available to our subscribing members in the open position segment of the newsletter.
The PowerShares Dynamic Large Cap Value ETF (PWV) demonstrated excellent relative strength during the recent selloff. While the S&P 500 was severely undercutting its 20-day EMA on May 5th, PWV remained well above the 20-day EMA. This ETF is now poised for a possible move higher. A move back above the two day high of $20.35 may present a buy entry trigger for PWV. We are placing PWV on the watchlist. Trade details are provided in the watchlist section of the newsletter.
Given yesterday’s volume contraction, Tuesday could very well decide the next significant move in the market. We continue to maintain a bullish bias but are still apt to take profits and cut losses quickly. The recent pullback in commodities is a keen reminder of what can occur when the trade becomes “loaded”…when the consensus becomes too bullish or too bearish.
Shares = 600
Trigger = 20.38
Stop = 20.01
Target = New High
Dividend Date = n/a
Notes = See commentary above
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 SLV buy stop triggered.
- 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