Tug of War – (GDXJ) (XRT)


Stocks ended the day mixed on light trade. For the second consecutive day price action was whippy but unlike Wednesday, stocks closed near session highs on Thursday. Further there was a clear divergence between the Nasdaq and the other indices. By the closing bell the tech-rich index had tacked on 0.6% while the Dow Jones Industrial Average, small-cap Russell 2000 and S&P 500 dropped 0.4%, 0.4% and 0.3% respectively. The S&P MidCap 400 closed higher by a modest 0.2%.

For the fifth time in seven days market internals were mixed. Volume was down sharply across the board. On the Nasdaq turnover fell by 15.0% and on the NYSE by 16.0%. However, the advancing volume to declining volume ratio posted mixed results. On the Big Board declining volume topped advancing volume by a factor of 1.9 to 1 but on the Nasdaq advancing volume held the upper hand as the spread ratio ended the session at a plus 2.0 to 1.

The Market Vectors Junior Gold Miner ETF (GDXJ) formed a reversal candle on Wednesday as it overcut resistance of its declining 20-day EMA. Yesterday GDXJ tested support at the four day low before reversing to close near resistance of the 20-day EMA. A volume fueled move back below the four day low of $29.68 could provide a short entry trigger for this ETF.

The SPDR S&P Retail ETF (XRT) has spent the past two sessions churning at resistance of its 200-day MA. Yesterday, on higher volume XRT attempted to move higher but ultimately reversed and closed in the bottom half of the trading range as the market closed near session highs. A move back below the two day low of $49.64 could result in a shorting opportunity in this ETF. We are monitoring XRT carefully for a possible short entry.

The market is clearly at an inflection point as there has been a battle between bears and bulls over the past two sessions. This battle has manifested itself in very whippy price action. However, the lack of volume and overall weak internals suggests that bears may soon wrestle control of the action and that we could be headed for another leg lower.

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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  • DTO triggered a buy entry five minutes after the open. Per intraday alert, we bought 170 shares of SRS due to yesterday’s reverse 3 for 1 split.
  • 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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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader