market timing model:

Confirmed Buy – Signal generated on the close of September 4 (click here for more details) (we are on a buy signal from the close of Aug. 16)

 

today’s watchlist (potential trade entries):

Having trouble seeing the open positions graphic above? Click here to view it directly on your web browser instead.

 

open positions:

Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Net P/L figures are based on two separate $50,000 model portfolios (one for ETFs and one for stocks). Changes to open positions since the previous report are listed in pink shaded cells below. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits.

Having trouble seeing the open positions graphic above? Click here to view it directly on your web browser instead.

 

closed positions:

Having trouble seeing the closed positions graphic above? Click here to view it directly on your web browser instead.

ETF position notes:

• See commentary below regarding AMLP trigger yesterday.

stock position notes:

• QIHU, AOL, NSM buy entries triggered. QCOR hit the stop and we are out with a below average loss.
• ONXX hit our target and we locked in a near $1,000 gain on a three-day hold.

 

ETF and broad market commentary:

For the third day in a row, the main stock market indexes finished near unchanged levels after trading in a tight intraday range. The Nasdaq Composite ($COMPQ) rose 0.2%, while both the Dow Jones Industrial Average ($DJIA) and S&P 500 ($SPX) edged 0.1% higher. The small-cap Russell 2000 ($RUT)slipped 0.1%, but the S&P MidCap 400 ($MID) rose 0.3%. Throughout most of the day, stocks were trading modestly higher, but a bit of selling pressure in the final 30 minutes of trading cause the main stock market indexes to close near the middle of their intraday ranges.

Total volume in the NYSE rose 2% above the previous day’s level, while turnover in the Nasdaq increased 9%. It was positive that the major indices advanced on higher volume, but the percentage gains in the broad market were too small to consider it to be a confirmed “accumulation day.” Nevertheless, volume in the Nasdaq move back above its 50-day average level. In both exchanges, advancing volume exceeded declining volume by a nominal levels.

Recently, iShares Emerging Markets Index ($EEM) broke out above a long-term downtrend line that began with its April 2011 high. Overall, we have been noticing the rotation of institutional funds into international ETFs, especially with regard to select emerging markets. The breakout above the downtrend line of EEM is shown on the weekly chart below:

Drilling down to the shorter-term daily chart, notice that EEM is also forming a “bull flag” pattern that should resolve itself to the upside in the coming days. With a tight volatility contraction over the past two days, a move above the two-day high could be considered buyable. Subscribers should note our exact entry and stop prices for this trade set up in the ETF watchlist section of today’s newsletter. Here’s the daily chart pattern:

Most of the agricultural commodity ETFs bounced higher yesterday, forming potential buy entry points into these ETFs with a positive reward to risk ratio. Of the handful of agriculture ETFs, the one that has shown the most relative strength and the best chart pattern lately is Elements International Agriculture ETF ($RJA). As you can see on the daily chart below, RJA formed a bullish “hammer” candlestick pattern yesterday, as it moved back above its 50-day moving average. With the recent “undercut” of its 50-day MA, this presents us with a low-risk entry point and a clearly defined stop below the “swing low” of September 18. As such, we are monitoring RJA for potential swing trade buy entry in today’s session, if it moves above yesterday’s high:

Alerian MLP ETF ($AMLP) printed an unusual “bad tick” above our trigger price yesterday. This means that the trade technically never triggered our buy entry price, as the “official” high of the day ended up being lower than our actual buy trigger price. As such, most subscribers with a buy stop price at our trigger level were not even filled for buy entry yesterday. Nevertheless, just to err to the side of being very fair with reporting, we are listing the position as being opened yesterday. If you did not yet enter the trade, consider waiting for it to actually trigger above the $16.65 level before buying. If that entery occurs, the same stop listed on today’s report can be used.

 

stock commentary:

ONXX hit our target yesterday:

. 

NSM, AOL, and QIHU triggered on the long side. NSM volume was well above average:

Whether you set physical stops with your broker or set alarms within your trading platform, always be aware of a stock that has triggered its stop. QCOR is a good example of never knowing just how far a stock can fall:

 

If you are a new subscriber, please e-mail rick@morpheustrading.com with any questions regarding our trading strategy, money management, or how to make the most out of this report.

 

relative strength combo watchlist:

Our Relative Strength Combo Watchlist makes it easy for subscribers to import data into their own scanning software, such as Tradestation, Interactive Brokers, and TC2000. This list is comprised of the strongest stocks (technically and fundamentally) in the market over the past six to 12 months. The scan is updated every Sunday, and this week’s RS Combo Watchlist can be downloaded by logging in to the Members Area of our web site.