Tick Tock, Tick Tock (ECH)


Stocks lost ground on Tuesday on higher trade but closed off session lows. The major indices all closed down on the session with smaller cap and technology stocks leading the decline. The small-cap Russell 2000 shed nearly 2.0% while the S&P MidCap 400 slid 1.4%. The Nasdaq fell just over 1.2%. The S&P 500 and the Dow Jones Industrial Average managed to keep losses contained as they ended the session lower by 1.0% and 0.7% respectively.

Market internals were moderately bearish. Volume increased by 6.9% on the Nasdaq and by 6.1% on the NYSE. Declining volume topped advancing volume by almost 5 to 1 on the NYSE and 2.6 to 1 on the Nasdaq. The convergence of market internals indicates that institutional investors were actively selling and we would therefore classify Tuesday as a distribution day in the broad market.

Yesterday, as the market recovered from session lows, the iShares MSCI Chile Investable Market ETF (ECH) gapped down and closed near the low of the day. This ETF has been showing relative weakness for quite some time and is once again poised for another selloff. A move below yesterday’s low of $63.94 could be the catalyst for further selling in ECH.

Since shattering support of its two year uptrend line and its 200-day MA, the Vanguard REIT ETF (VNQ) has rallied back into resistance of its 20-day EMA. An “overcut” of this key mark and/or the 200-day MA could provide the ideal short entry trigger for this ETF. We are monitoring VNQ carefully for a potential short entry.

The SPDR Series KBW Bank ETF (KBE) has been languishing in a trading range near its 52-week lows while the broad market has been moving higher. This relative weakness is an indication that institutions may be distributing this ETF into strength. A move below the two day low of $19.00 may provide a shorting opportunity in this ETF.

The market appeared as if it might roll over yesterday but a late day surge prevented what could have been a very ugly day. With yesterday’s action, many ETFs are close to forming legitimate setups that meet our trading criteria. We continue to be patient as the next set of trades develop.

Yesterday, via intraday alert we purchased BZQ. Trade details are available to our subscribing members in the open positions section of the newsletter.

Today’s Watchlist:

There are no new setups for today. As always, we will send an intraday alert if any new trades are made.

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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  • Per intraday alert, re-enterd BZQ long over the prior day’s high.
  • 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.
  • For those of you whose ISPs occasionally deliver your e-mail with a delay, make sure you’re signed up to receive our free text message alerts sent to your mobile phone. This provides a great way to have redundancy on all Intraday Trade Alerts. Send your request to [email protected] if not already set up for this value-added feature we provide to subscribers.

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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader