Commentary:
Stocks traded in a tight range on Monday as they consolidated for a second consecutive day on light volume. The Nasdaq was the only major index to close in positive territory but the losses incurred elsewhere were slim. The technology rich index ended the session higher by 0.2%. The Dow Jones Industrial Average, S&P 500 and small-cap Russell 2000 all slid 0.2% while the S&P MidCap 400 fell a more modest 0.1% on the day.
For a second straight session market internals finished mixed. Volume was down across the board. Turnover on the Big Board fell by 14% while Nasdaq volume was lower by 22% yesterday. Declining volume outpaced advancing volume on the NYSE by a factor of 1.6 to 1 but on the Nasdaq advancing volume held the advantage by a factor of 1.7 to 1. Monday’s internals suggest another day of consolidation for the market as institutions showed little interest in wholesale buying or selling.
The Global X Uranium ETF (URA) continues to struggle in finding traction off the recent low. Further, this ETF has formed a sequence of lower highs as it rides below its 20-day EMA. This bearish pennant-like formation could invite selling activity should URA lose support of yesterday’s low at $14.71.
The Guggenheim Canadian Energy ETF (ENY) has recently formed a bullish pennant-like formation. Yesterday this ETF sold off on light volume and it appears likely that it may undercut both the 20-day EMA and 50-day Moving Average. A move back above yesterday’s high of $22.99 may provide a buy signal for ENY. We are monitoring ENY closely for a possible buy entry.
Volume was down significantly for the second straight session on Monday. Given last week’s impressive performance it is not unusual to see the type of price and volume action exhibited by the market yesterday. Light volume accompanying price consolidation following a strong rally is generally considered a bullish signal.
Today’s Watchlist:
There are no official setups this morning. We will send an Intraday Alert if any new trades are made.
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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Notes:
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There were no changes to the open positions section.
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Edited by Deron Wagner,
MTG Founder and Head Trader