Volatility = Smaller Position Size – (DVY) (AGA)


Stocks ended the day mixed in another skittish session. Stocks fell sharply at the open but recovered to close near sessions highs on stronger trade. By the closing bell the S&P MidCap 400 and the small-cap Russell 2000 had slid 0.2% and 0.1% respectively. The Nasdaq closed just fractionally lower. The Dow Jones Industrial Average was the day’s best performer, as it tacked on 0.4%. The S&P 500 managed a modest gain of 0.2%.

For the second day in a row, market internals were mixed. Volume climbed by 11.0% on the Nasdaq and by 14.0% on the Big Board. However, declining volume outpaced advancing volume on the Nasdaq by a factor of 1.2 to 1. On the NYSE advancing volume outperformed declining volume by 1.4 to 1. Yesterday’s sharp intraday reversal and higher volume, point to institutional accumulation despite the mixed price action. Yesterday also marked the fifth consecutive consolidation day for the broad market.

The iShares Dow Jones Select Dividend Index (DVY) formed a reversal candle yesterday as it sold off sharply, tested the lows of the trading range, but ultimately recovered to close near session highs. A volume powered move back above the three day high of $53.17 could present a buying opportunity in this ETF. We are placing DVY on the watchlist. Trade details are available to our subscribers in the watchlist section of the newsletter.

On December 1st, the DB Agricultural Double Short ETF (AGA) formed a distinct reversal candle, as it undercut its 20-da EMA. This price action serves to sweep stops and shake any weak hands out of the trade. Yesterday, on a burst in volume, AGA demonstrated relative strength as it gapped higher and closed near session highs. Further, it tested the high of the reversal candle established on December 1st. A volume fueled move above yesterday’s high of $19.73 could provide a buy entry trigger in this ETF. We are placing it on the watchlist. Trade details are posted in the watchlist section of the newsletter for our subscribers.

The market appears to be headed higher, as it has been consolidating for five consecutive days at the highs of the November 30th rally. However, the intraday volatility warrants caution and we have therefore reduced our trade size to account for the whippy price action.

Today’s Watchlist:


Shares = 200
Trigger = 53.23
Stop = 52.05
Target = 54.70
Dividend Date = n/a

Notes = see commentary above


Shares = 200
Trigger = 19.78
Stop = 18.36
Target = New swing high
Dividend Date = n/a

Notes = see commentary above

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

    position summary

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  • No trades were made.
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      Edited by Deron Wagner,
      MTG Founder and
      Head Trader