The Wagner Daily


The S&P 500 and Nasdaq Composite both registered their third consecutive day of gains, although the post Fed decision on interest rates kept the gains in check. Prior to the FOMC decision on interest rates at 2:15 pm, the broad market traded in a narrow, relatively flat range. After the Feds announced the widely expected quarter point increase in the Fed Funds rate, the major indices became quite volatile, rallying to new intraday highs, then new intraday lows. The broad market remained indecisive into the close, with each of the major indices closing near the middle of their ranges.

The Nasdaq Composite gained 0.3% for the second consecutive day, and on volume that was 3% higher. The S&P 500 and Dow Jones Industrials moved 0.3% and 0.4% higher. However, total volume in the NYSE declined by 7%. Interestingly, volume in the NYSE remained light after the 2:15 interest rate announcement.

Because it was a Fed day, it’s important not to read too much into yesterday’s market action. The volatility late yesterday afternoon was simply a knee-jerk reaction to the rate increase, even though it was widely expected. Historically, we typically don’t know the market’s real reaction to a rate change until the following day. Today’s market performance and direction is much more important than yesterday’s. Therefore, we’ll wait until tomorrow to look at updated daily charts of the major indices. Until then, keep an eye on the same resistance levels we spoke of yesterday — the Jan. 18 high on the S&P and resistance of the mid-January lows on the Nasdaq.

Today’s watch list:

RTH – Retail HOLDR

Trigger = below 98.60 (below yesterday’s close)
Target = 93.20 (support of the 200-day MA)
Stop = 100.40 (above the January 3 high)

Notes = As you can see on the chart above, RTH has rallied into resistance of its daily downtrend line, so we expect a resumption of the downtrend from here. Remember you can track the price of RTH by following the index for the HOLDR, which is $IRH.X.

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:

    DIA short (from Jan. 20) –
    shorted 104.95, new stop 106.20, target 101.49, unrealized points = (0.93), unrealized P/L = ($186)

    IWM short (re-entry, from Feb. 1) –
    shorted 124.72, new stop 126.20, target 121,90, unrealized points = (1.17), unrealized P/L = ($117)


Per intraday e-mail alert, we adjusted stops on our open positions and cancelled the mechanical stops ahead of the FOMC decision on rates. As anticipated, the post-Fed volatility would have stopped us out, but both open positions closed below their original stop prices. Stops have now been adjusted slightly to compensate for yesterday afternoon’s volatility.

Edited by Deron Wagner,
MTG Founder and