Technically Speaking… News Sometimes Matters


Stocks gained traction on Wednesday but closed well off session highs on light trade. The major indices all closed higher. The technology rich Nasdaq posted a 0.5% gain while the Dow Jones Industrial Average and the small-cap Russell 2000 both added 0.4%. The S&P 500 and the S&P MidCap 400 lagged as both posted only modest advances of 0.3%.

Wednesday’s internals were mixed. Volume declined on both exchanges. Turnover fell by almost 7.0% on the Nasdaq and just over 4.0% on the NYSE. However, advancing volume got the best of declining volume by a factor of 2.3 to 1 on the NYSE and 2.1 to 1 on the Nasdaq. Yesterday’s lighter volume indicates that there was an absence of institutional participation in the market. Consequently, we would not consider Wednesday to be an accumulation day on Wall Street.

Yesterday we covered our position in SLV for just under a two point gain. The big gap up allowed us to realize a very quick but solid profit in a volatile market and from a risk/reward standpoint was a prudent decision.

Via an intraday alert we opened a long position in the PowerShares DB US Dollar Bull ETF (UUP). We liked the trade because it has been forming a nice basing pattern for nearly three months after breaking out of a long term downtrend in mid May. Further, UUP pulled back into support at its 20-day EMA and 50-day MA yesterday. We anticipate that UUP will consolidate for several days prior to seeking higher ground. Trade details are available for our subscribing members in the open positions section of the newsletter.

Several days ago we discussed the CurrencyShares Australian Dollar ETF (FXA) as a possible long candidate. FXA has been consolidating along its 20 and 50-day moving averages since early May. Yesterday FXA reversed sharply as it gapped up following an undercut the 20 and 50 day moving averages. This move has likely served to trap bears and should result in further upside for FXA. A volume fueled move above yesterday’s high of $107.94 may offer a buy trigger for this ETF.

As technical traders we rarely pay attention to the news. However, as the US Debt Ceiling debate unfolds we would consider it foolish not to take the outcome of this discussion into consideration. We have no idea what agreement Congress may arrive at but we do know that uncertainty often leads to surprise which often leads to volatility. As such we believe that limited, or at a minimum, hedged exposure to the market is warranted until a resolution is at hand. Ignoring the potential outcome of this event would be similar to ignoring a surprise two percent rate hike from the Fed.

Today’s Watchlist:

There are no new official setups for today. 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

    position summary

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  • Per intraday alert, sold SLV to lock in a near 1% gain in the portfolio. We also bought UUP on a pullback to support.
  • 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
      Head Trader