Commentary:

Stocks slid moderately lower on Monday on light trade. All five major indices closed in the bottom third of their respective trading ranges. The small-cap Russell 2000 led the move lower as it fell 1.6% on the session. The S&P MidCap 400 dropped 1.1% while the S&P 500 lost 1.0%. The Nasdaq and the Dow Jones Industrial Average showed the most resiliency as they shed 0.8% and 0.6% respectively.

Market internals ended the day mixed for a third consecutive day. Volume was considerably lower across the board as it fell by 12.6% on the Nasdaq and by 11.2% on the Big Board. Declining volume topped advancing volume by a ratio of 5.7 to 1 on the NYSE and by a factor of 3.3 to 1 on the Nasdaq. Monday’s price and volume action point to an absence of institutional participation in the selloff. Consequently, we would not categorize Monday as a distribution day in the market.

The SPDR Gold Trust ETF (GLD) has recently reclaimed support of its 20-day and 50-day moving averages. Further, GLD has now begun consolidating above these key marks. Ideally we would like to see GLD pull back and set a higher low by undercutting the 20-day EMA. This type of price action would help to form a base for the next move higher. Alternatively, a move above the two day high of $174.05 could present a buying opportunity

For those of you new to the newsletter, you may have noticed that we haven’t put many trades on lately and that commentary has been fairly light in the morning chat sessions. This is not always the case. However, when market conditions are not conducive to trading we don’t trade. Our methodology is rules based and requires that both the proper market conditions and specific trade setups are present before entering trades. Further, each trade must present at least a 2 to 1 risk/reward ratio. In order to make money in trading, the odds must be favorable. Otherwise, your trading success rate would have to be unrealistically high. Only 55% to 60% of our trades are successful, yet our newsletter returns have been impressive because of our strict trade entry and risk/reward requirements. We refer to this as the “math behind the trade”.

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Today’s Watchlist:

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

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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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Notes:

• No trades were made.
• 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 support@morpheustrading.com if not already set up for this value-added feature we provide to subscribers.

Edited by Deron Wagner,
MTG Founder and
Head Trader