The Wagner Daily


Stocks traded in a sideways range, digesting their recent gains yesterday, as the major indices inched higher. The Nasdaq Composite posted the highest gain for the second day in a row, enabling the index to advance 0.4%. The Dow Jones Industrial Average rallied 0.2% and the S&P 500 eked out a 0.1% gain. The small-cap Russell 2000 was higher by 0.2%, while the S&P Midcap 400 gained 0.3%.

Total volume in both the NYSE and Nasdaq was 10% lighter than the previous day’s levels. As the bulls pause to catch their breath, it’s common for turnover to decline on sessions that follow bullish “accumulation days.” Market internals were only marginally positive. Advancing volume in the NYSE exceeded declining volume by a margin of 1.3 to 1. The Nasdaq ratio was positive by 2 to 1.

After trading in a sideways channel for the past seven months, the PowerShares WilderHill Clean Energy (PBW) may finally be poised to break out above the range. Recent attempts to break out have all failed at the $18.40 level, but it is likely to finally bust through resistance.. Unlike prior breakout attempts, it is trading above its 200-day moving average this time. Accumulation volume over the past several weeks is also bullish. As you can see on the chart below, the entry point is above the $18.50 area:

As for the broad market, our advice remains the same as yesterday. Remain very nimble on any long positions, ready for the market to change direction without notice. There are very few quality short setups as well, so keep a hefty portion of cash reserves to capitalize on the market’s next clearly defined move. On the long side, we continue to stalk the iShares Software (IGV) for potential entry. We also are watching for a break out of the range, in either direction, on the iShares China (FXI).

NOTE: The U.S. equities markets will be closed on Monday, February 19, in honor of Washington’s Birthday. As such, The Wagner Daily will not be published that day, but regular publication will resume on Tuesday, February 20. Enjoy the holiday weekend!

Today’s Watchlist:

As per yesterday’s newsletter, we are watching FXI for potential entry, but we first need to see which direction the move will be. If it goes and we enter, we will promptly send an intraday e-mail alert. IGV also remains on the long watchlist.

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):


    Closed positions (since last report):

      GLD long (400 shares total – 300 from Jan. 23, 100 from Feb. 8) –

      bought 64.24 (avg.), sold 65.82, points = + 1.58, net P/L = + $624

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



      GLD hit our tight trailing stop yesterday, so we are now completely flat.

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    Edited by Deron Wagner,
    MTG Founder and
    Head Trader