The Wagner Daily


The major indices moved modestly higher after the first hour of trading yesterday morning, but spent the remainder of the day lazily drifting in a sideways range. The S&P 500 and Dow Jones Industrial Average, both of which registered fresh three and a half year highs, gained 0.3% and 0.5% respectively. The Nasdaq Composite Index notched a 0.3% gain, but still closed just shy of its prior high from earlier this month. Not surprisingly, total market volume declined by 6% in the NYSE and 8% in the Nasdaq. Expect volume to be even lighter in today’s session, as many traders typically close up shop early ahead of major market holidays such as Christmas.

Not much has changed on a technical level since we looked at daily charts of the broad-based indices during the past two days. In the NYSE, volume dropped off below its 50-day average on December 20, and has been coming in below average ever since. Volume in the Nasdaq has been relatively higher, but also dropped off below its 50-day average level yesterday. This is important to point out because the drop in institutional interest during this pre-holiday week means that we really don’t know if the moderately bullish action of the past several days is for real. Remember that institutional money represents about 80% of the market’s volume on an average day. Therefore, any trend that develops when institutional participation declines must always be called into question.

After the holiday season passes and institutions return to the markets, we will know the real intentions of where the market is headed in the short-term. But in the interim, we suggest you tread lightly on both sides of the market. Remaining mostly in cash enables you to be nimble, which is always a benefit when volume declines in the markets. We will look at more charts and re-assess the technical direction of the markets after the Christmas holiday has passed.

Note that the U.S. stock markets are closed tomorrow, December 24, in observance of the Christmas Day holiday. As such, The Wagner Daily will not be published tomorrow, but regular publication will resume on Monday, December 27. Have a safe and fun holiday season!

Today’s watch list:

There are no new setups for today, as we are not interested in initiating any new positions ahead of the Christmas Holiday. We remain long BBH, short 1/2 position QQQQ, and short HHH, each with an unrealized profit.

Daily Reality Report:

Below is Morpheus Trading Group’s daily
performance report of closed trades and an update on all open positions from The
Wagner Daily (Intraday Real-Time Room trades are reported separately in The
Wagner Weekly). Net P/L figures are based on the quantity of shares represented
in the MTG Position Sizing Model.

Closed Positions:


Open Positions:

    BBH long (from Dec. 9) –
    bought 146.60, stop 146.90, target 160.20, unrealized points = + 2.85, unrealized P/L = + $285

    QQQQ short (HALF position, from Dec. 7) –
    shorted 40.09, stop 39.95, target 37.80, unrealized points = + 0.36, unrealized P/L = + $72

    HHH short (from Dec. 20) –
    shorted 69.65, stop 70.75, target 65.75, unrealized points = + 0.40, unrealized P/L = + $40


There are no changes to the stops on the three open positions.

Edited by Deron Wagner,
MTG Founder and