Stocks ended the session modestly higher on Friday on mixed trade. The small-cap Russell 2000 led the rally as it gained 0.6% on the day. The Dow Jones Industrial Average improved 0.4% while the S&P MidCap 400 and the S&P 500 rose by 0.3% and 0.2% respectively. The Nasdaq closed fractionally above par.
Market internals ended the day mixed. Volume was up 23% on the Nasdaq but down 7.1% on the NYSE. Advancing volume outpaced declining volume by a ratio of 1.5 to 1 on the NYSE and 1.1 to 1 on the Nasdaq. The mixed trade and minimal difference between advancing and declining volume suggests the absence of serious institutional participation in Friday’s move.
On Friday we sold half of our position in KOL and IEO into strength to capture solid gains (almost a 1% gain in our portfolio). We also raised the stop on the remaining half of both positions. All trade detail updates are available to our subscribing members in the Open Position segment of the newsletter.
The Dow Jones iPath AIG Agricultural ETF (JJA) lost support of the 20-day EMA and 50-day MA on April 28th. However on Friday this ETF reversed sharply and almost reclaimed both moving averages. A move above Fridays high of $65.35 could provide a buy trigger for JJA. We will be monitoring this setup closely for a possible long entry.
Since gapping up on April 20th, the Direxion Daily Semiconductor Bull 3X Shares (SOXL) has been consolidating just above its 50-day MA. Further, SOXL is showing a bullish divergence between price and the accumulation/distribution histogram (price consolidating as Accum/Dist up trends). Friday’s volume contraction provides another possible bullish signal that this ETF is preparing to move higher. A volume fueled move above the three day high of $62.05 may provide a long entry signal for this ETF.
The market continues its relentless climb. Nonetheless, we are sticking to our plan of taking profits quickly as bullish sentiment has reached an extreme across many sentiment indicators. Markets can rally (or sell off) for significant periods of time even once they reach an extreme. However, a major turn in the market (up or down) cannot occur without the trade being “loaded” in favor of bulls or bears. The crowd must be predominantly on one side of the trade in order for a small change in price to elicit a big change of buying or selling behavior. When turns occur, they tend to be swift and decisive. Although we are currently bullish, we do not want to get caught in a major whipsaw.
There are no official setups this morning.
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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Per intraday alert, sold half of KOL and IEO to lock in gains. As of this writing it appears that the market may gap up Monday morning. Should we see a significant gap up, we are likely to sell the remainder of both (KOL and IEO) positions. We will send an intraday alert should we decide to take profits on either or both positions. USCI has been removed from the watchlist for now.
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.
Edited by Deron Wagner,
MTG Founder and Head Trader