The Wagner Daily


The major indices closed marginally higher yesterday, but volume was among the lowest of the year. Continued relative strength in the Semis enabled the Nasdaq Composite to gain another 0.3% yesterday, but total market volume in the Nasdaq was 24% lighter than the previous day. The 1.65 billion shares was the lightest volume day of the year. Volatility was also very low, as the intraday range in the index was only 0.5%. The S&P 500 managed less than a 0.1% gain, but the Dow Jones Industrials closed less than 0.1% lower. The 17% decline in NYSE volume also was the lightest of the calendar year. Given last Friday’s broad-based gains, yesterday’s light volume day of consolidation was bullish because it enabled the market to “catch its breath” without giving back any gains on higher volume.

While the Semis have been acting well, the major indices remain stuck in a trading range that can make it choppy if you attempt to trade ETFs such as SPY, DIA, or QQQQ. But if you’re an ETF trader who is feeling confined by the mixed picture of the U.S. markets right now, consider looking at some of the International ETFs, many of which have been acting great and are sitting at new 52-week highs. A few to check out are EWA (Australia), EWW (Mexico), and EWH (Hong Kong). You can get a complete list of the international ETFs that Morpheus tracks by viewing the weekly Sector Trends Report, which is published each week with the Wagner Weekly newsletter. You may also want to check out the web site, as most of the international ETFs belong to the iShares family of funds.

Yesterday’s light volume and narrow intraday trading ranges did little to change the near-term technical view of the major indices. Rather than being redundant, we recommend you reference yesterday’s Wagner Daily to review the key support and resistance levels on the daily charts of the S&P, Nasdaq, and Dow. It’s also important that you keep an eye on the 443 level of the $SOX, as that represents the 200-week moving average we are closely watching. Based on the solid volume and relative strength of leading semiconductor stocks over the past week, we continue to feel confident the index will finally breakout above this resistance level that has been intact for the past three years. The one factor that could prevent the $SOX from breaking out would be resistance of the 52-week highs in both the S&P and Dow, but we have also seen the semis trade completely independently of the S&P and Dow in the past. For now, we will patiently sit tight with our long position in SMH, rather than attempting to predict the direction of the broad market.

Today’s watch list:

There are no new setups today, although we remain long SMH (with a 4% unrealized gain now).

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:

    SMH long (from Feb. 7) –
    bought 32.55, stop 32.25, target 34.90 on HALF, no target on second HALF (will trail stop), unrealized points = + 1.37, unrealized P/L = + $412


No changes to the stop or target today.

Edited by Deron Wagner,
MTG Founder and