The Wagner Daily


In keeping with the stock market’s indeterminate nature of late, the major indices chopped around within their respective ranges of the previous day before finishing mixed across the board. Small and mid-caps outperformed, as the Russell 2000 gained 0.4% and the S&P 400 advanced 0.1%. The Dow Jones Industrial Average fell 0.4%, the S&P 500 dropped 0.3%, and the Nasdaq Composite lost only 0.1%. As is typical in choppy sessions, both the S&P and Nasdaq Composite closed in the middle of their intraday ranges.

Like the previous day, turnover in both the NYSE and Nasdaq declined. Total volume in the NYSE was 1% lighter than the previous day’s level, while volume in the Nasdaq was 7% lighter. Because the major indices were mixed and the volume changes were minimal, not much should be read into the impact of yesterday’s volume levels. Declining volume marginally exceeded advancing volume in both exchanges, but internals were mostly mixed throughout the session.

One sector that may be worthy of buying in the near future is Gold ($GOX). The Gold Index, which has been in a primary long-term uptrend since May of 2005, has been correcting on its shorter-term daily chart since the beginning of February 2006. However, it closed yesterday right at resistance of its downtrend line and may be poised for a breakout over the next several days:

Obviously, a breakout in the $GOX would provide buying opportunities in a handful of individual gold mining stocks. But it is important to realize that GLD (streetTRACKS Gold Trust) and the commodity price of spot gold does not always lead the prices of the mining stocks. Therefore, you probably should consider making your own “synthetic ETF” by simultaneously trading a basket of the leading gold stocks. If spot gold begins to form a similar chart pattern, you can simply buy GLD, but trading individual mining stocks until then is a better bet. There are numerous stocks within the sector, but a few of the stronger ones right now include GG, MDG, GLG, and PD.

We don’t want to sound like a broken record, but the reality is that there is nothing new to say about the technical state of the broad market. The major indices continue to chop around in a range with the S&P just above its breakout level of 1,295 from the February high. The Nasdaq Composite remains in a “chop fest” just above support of its 20 and 50-day moving averages. We will continue to watch for a confirmed break out of the range, which will eventually present itself. When it does, being prepared with cash in hand instead of already positioned with stocks is a much better way to tackle the situation.

Today’s Watchlist:

There are no new trade setups for today, as we now have three open positions.

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:

    Open positions (coming into today):

      EWZ short (300 shares from March 21 entry) –
      shorted 40.30 (avg.), stop 42.45, target 33.20, unrealized points = + 0.36, unrealized P/L = + $108

      IGW short (300 shares from March 16 entry) –
      shorted 64.26, stop 66.41, target 59.90, unrealized points = + 0.29, unrealized P/L = + $87

      IWM short (400 shares from March 20 entry) –
      shorted 73.78, stop 75.28, target 70.40, unrealized points = (0.67), unrealized P/L = ($268)

    Closed positions (since last report):


    Current equity exposure ($100,000 max. buying power):



      Per intraday e-mail alert, we added to the EWZ short position yesterday. We will lower the stop after the next “swing high” is established. There are no other changes to the open positions.

    for glossary and explanation of terms used in The Wagner Daily

    Click here to view MTG’s past performance results (updated monthly).

    Edited by Deron Wagner,
    MTG Founder and
    Head Trader