today’s watchlist (potential trade entries):
Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Net P/L figures are based on two separate $50,000 model portfolios (one for ETFs and one for stocks). Changes to open positions since the previous report are listed in red text below. Be sure to read theWagner Daily subscriber guide for important, automatic rules on trade entries and exits.
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ETF position notes:
- No trades were made.
stock position notes:
- Per intraday alert, sold KORS for a small loss when the price action broke the 50-day moving average.
ETF and broad market commentary:
Stocks posted mixed results yesterday as trade quickened. The Nasdaq fell 0.8% yesterday and lost support of its 50-day MA. The S&P 500 also lost ground as it closed lower by 0.1%. However, the DJIA showed relative strength as the blue chip index tacked on 0.6%. The small-cap Russell 2000 and the S&P MidCap 400 rose by 0.2% and 0.1% respectively.
Market internals were mixed yesterday. Volume increased on the Nasdaq by 7.5% but fell on the NYSE by 2.6%. Advancing volume marginally outpaced declining volume on the NYSE by 1.1 to 1. However, declining volume held the upper hand on the Nasdaq by a factor of 1.3 to 1. Based on yesterday’s internals and price action, it is reasonable to conclude that the Nasdaq once again fell under distribution.
Since gapping up on April 9th, the ProShares UltraShort Oil and Gas ETF (DUG) has been consolidating in a tight flag-like formation. A volume fueled move above the five day high of $25.50 could provide a buying opportunity in DUG.
During the recent round of selling, the iShares MSCI Malaysia ETF (EWM) has shown relative strength as it has held support at its 20-day and 50-day moving averages. Although EWM could offer a buy entry above yesterday’s high of $14.65, a more favorable setup would involve EWM establishing a “higher-low” before continuing any possible move higher.
The market continues to struggle. Yesterday, the Nasdaq joined the other major indices as it closed below its 50-day moving average. Although the market continues to see selling pressure, we remain in a trading range. Still, we need to hold the current levels or the current pullback could lead to a much larger correction.
If the majority of bullish chart patterns hold up over the next week or two, then we will have to assume the market is in a normal correction and the next significant move will be to the upside. While we wait for conditions to settle down we’d like to see stocks act like VVUS or FTNT (tight range at the highs) rather than HALO or MOH, which have blown up below the 50-day MA. While there are a few stocks that are ready to emerge from valid basing patterns, most stocks need several weeks of consolidation to produce low-risk buy setups.
Stocks we are watching: MDVN, VVUS, HSTM, TISA, CPWM, STX, FIRE, PII, LVS, TYL, CRI, WFM, PNRA, TDG, FTNT, RAX, QCOR, ARAY, DLPH, RNDY, LNKD.
MDVN has held up well and is a potential buy entry over the two-day high above 75.20. This is not an official setup. We will promptly send an intraday alert if any action is taken.
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