today’s watchlist (potential trade entries):
open positions:
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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closed positions:
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ETF position notes:
stock position notes:
ETF and broad market commentary:
Stocks pared some of Tuesday’s big losses but trade was light. The small-cap Russell 2000 led the advance as it posted a 1.6% gain. The S&P MidCap 400 added 1.2%, while both the DJIA and the S&P 500 posted 0.7% gains. The tech-rich Nasdaq climbed by 0.8%. Platinum, non ferrous metals and gold miners all struggled yesterday, while aluminum, homebuilders and telecommunications all posted strong gains.
Wednesday ended with market internals mixed. Volume plunged by 21.7% on the Nasdaq and 19.4% on the NYSE. However, advancing volume topped declining volume by 3.8 to 1 on the NYSE and 3.6 to 1 on the Nasdaq. Given the light volume, it is safe to conclude that institutional players were not active in the market on Wednesday.
The Vanguard MSCI Europe ETF (VGK) has been one of the weaker ETFs during the rally off of last summer’s lows. During the rally, VGK struggled just to reclaim its 200-day MA. During the recent pullback, VGK collapsed below all of its major moving averages, including the declining 200-day MA. A rally into the declining 20-day EMA and 200-day MA could present a shorting opportunity in this ETF.
The Global X FTSE Colombia 20 ETF (GXG) has shown excellent relative strength during the recent market decline. On April 10th, GXG formed a bullish reversal candle, as it under cut the 50-day MA but rallied on strong volume to close near session highs. GXG has now been forming a strong base for almost a month. It generally takes six to eight weeks to form the proper base from which to launch a sustainable rally. Although GXG could provide a long entry above the six day high of $21.50, it is much more likely that this breakout will fail, particularly given the current weak conditions in the broad market. If we were to take a position in GXG above $21.50, we would reduce our position size.
Following an opening gap down, our sole open ETF position, ERY, rallied on solid volume to close near the two day high. We will likely look to exit this position if it does not respond favorably tomorrow. Yesterday’s market rally was far from impressive, as it lacked the strong volume needed to begin repairing the damage done over the past week. We will continue to be selective in our selection of new positions and look to take profits and cut losses promptly.
stock commentary:
Now that our market timing model is at a sell signal what exactly are we looking for to trigger a buy signal?
Our short-term plan is to remain mostly in cash and wait for market conditions to settle down. We have been busy the past few weeks but now is the time to lay low and remain patient.
If you are a new subscriber, please e-mail rick@morpheustrading.com with any questions regarding our trading strategy, money management, or how to make the most out of this report.
market timing model: BUY Signal generated on close of Sept. 21 Market timing model is…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…