Commentary:
After two straight days of large gains, the major indices entered into a healthy, sideways consolidation that allowed stocks to finish with mixed results. The S&P 500 gained 0.7% and the Dow Jones Industrial Average rallied 0.4%, but the Nasdaq Composite slipped 0.5%. Small and mid-caps showed relative strength again, as the Russell 2000 and S&P Midcap 400 indices gained 1.5% and 1.9% respectively. All the main stock market indexes closed just above the middle of their intraday trading ranges.
Turnover receded across the board, which is bullish when stocks are digesting a round of strong gains. Total volume in the NYSE decreased 12%, while volume in the Nasdaq similarly eased 12% below the previous day’s level. The lighter trade tells us investors were not interested in following the previous two days of gains with heavy selling into strength. Market internals were mixed. In the NYSE, advancing volume exceeded declining volume by a margin of just under 2 to 1. The Nasdaq adv/dec volume ratio was negative by only 3 to 2.
Two days ago, the spot gold continuous futures (@YG) contract broke out above resistance of its 50-day moving average, carrying our position in Double Gold Long (DGP) along with it. Now spot gold is consolidating in a tight, sideways range, just above its 50-day MA. As such, we now expect gold to make another leg higher in the near-term. Since the gold futures contract trades around the clock, but DGP does not, we’ve shown the daily chart of spot gold below:
Yesterday, CurrencyShares Japanese Yen (FXY) maintained its current uptrend by perfectly bouncing off support of its 20-day exponential moving average. As such, we remain long that position, and will trail our protective stop higher after FXY moves above its short-term consolidation:
Many of the inversely-correlated ProShares UltraShort ETFs have pulled back to support of their 20-day EMAs. While this normally would be an ideal level to buy them, recall that their retracements off the highs corresponds to the major indices rallying into resistance of their October 2008 lows. But rather than immediately heading south after testing such a pivotal level of resistance, stocks have begun consolidating instead, giving us reason to believe there’s a decent shop of another leg higher in the near-term. As such, it probably a good idea to lay off any new entries in the UltraShort ETFs.
NOTE: The U.S. markets will be closed Thursday, November 27, in celebration of Thanksgiving Day, and will finish at 1:00 pm ET on November 28. Accordingly, The Wagner Daily will not be published on Thursday, and an abbreviated version will be sent on November 28. Enjoy the holiday with your family and friends.
Today’s Watchlist:
There are no new setups ahead of the holiday. We don’t intend to enter any new positions until at least Monday, as volume is typically light ahead of holiday periods. This increases the chances of choppy trading conditions.
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. Please review the Wagner Daily Subscriber Guide for important, automatic rules on trigger and stop prices.
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Open positions (coming into today):
- Per Intraday Trade Alert, we bought MVV as a daytrade, raised its stop thereafter, and eventually scratched the trade.
- Note we raised the stop on DGP.
- Reminder to subscribers – Intraday Trade Alerts to your e-mail and/or mobile phone are normally only sent to indicate a CHANGE to the pre-market plan that is detailed in each morning’s Wagner Daily. We sometimes send a courtesy alert just to confirm action that was already detailed in the pre-market newsletter, but this is not always the case. If no alert is received to the contrary, one should always assume we’re honoring all stops and trigger prices listed in each morning’s Wagner Daily. But whenever CHANGES to the pre-market stops or trigger prices are necessary, alerts are sent on an AS-NEEDED basis. Just a reminder of the purpose of Intraday Trade Alerts.
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DGP long (500 shares total — 350 from Oct. 24 entry, 150 from Nov. 19 entry) –
bought 13.51 (avg.), stop 13.87 (for full position), unrealized points = + 2.59, unrealized P/L = + $1,295
FXE long (250 shares from Nov. 25 entry) –
bought 130.70, stop 127.42, target 133.70, unrealized points = + 0.43, unrealized P/L = + $108
FXY long (150 shares from Nov. 19 entry) –
bought 103.77, stop 101.24, target new high (will trail stop), unrealized points = + 0.56, unrealized P/L = + $84
Closed positions (since last report):
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MVV long (400 shares from Nov. 25 daytrade entry) –
bought 19.95, sold 19.79, points = (0.16), net P/L = ($72)
Current equity exposure ($100,000 max. buying power):
- $56,482
Notes:
Edited by Deron Wagner,
MTG Founder and
Head Trader