Commentary:
Stocks gained back most of Wednesday’s losses to close near session highs. However, trade was light. All five major indices ended the day in the black. The S&P MidCap 400 and the small-cap Russell 2000 tacked on 1.4% and 1.3% respectively. The Dow Jones Industrial Average and the S&P 500 both added 1.1%, while the Nasdaq was the day’s laggard as it advanced just over 0.9%.
Market internals were mixed on Thursday. Volume slipped on the Nasdaq by 4.6% and on the NYSE by 3.0%. Nonetheless, advancing volume outpaced declining volume by a fairly wide margin on both exchanges. By the closing bell the spread ratio stood at +11.7 to 1 on the NYSE and +4.8 to 1 on the Nasdaq. Due to the light volume, yesterday was clearly not an accumulation day. However, given the fact that the broad market reclaimed most of the losses incurred on Wednesday, we are now poised to once again attempt a breakout above resistance.
In light of yesterday’s performance, the DJIA and the SPY are both within a few points of breaking above the neckline of an inverted head and shoulders pattern. The same holds true for the IYT. IYT is still on the watchlist. The charts below are self explanatory.
The ProShares MSCI UltraShort Brazil ETF (BZQ) gapped above resistance on Wednesday on a burst of volume. Yesterday, BZQ pulled back on light volume and maintained support above the 20-day EMA and 50-day MA. A move above the two day high of $19.60 could provide a buying opportunity in this inverse ETF. We are placing BZQ on the watchlist. For our subscribers, trade details are posted in the watchlist section of the newsletter.
Yesterday, on increasing volume, the SPDR S&P Retail ETF (XRT) formed a reversal candle and closed near session highs. A move above the three day high of $53.24 may provide a buy entry trigger for XRT. We are also placing XRT on the watchlist.
Our open positions showed mixed performance. EUO remains strong but faded into the close. Given the recent run up in EUO it may take a little time for this trade to play out. YCS gapped down and struggled on Thursday and it now appears that it may hit its stop. We now have four watchlist candidates. Two are long plays and two are short plays. In the current light volume holiday action, the market continues to find it hard to establish an identity. We wouldn’t be surprised to see the market languish once again on Friday.
Today’s Watchlist:
BZQ
Long
Shares = 300
Trigger = 19.66
Stop = 18.67
Target = n/a
Dividend Date = n/a
Notes = see commentary above
XRT
Long
Shares = 300
Trigger = 53.32
Stop = 52.09
Target = Retest of 52-week high
Dividend Date = n/a
Notes = see commentary above
FXP
Long
Shares = 200
Trigger = 31.31
Stop = 29.35
Target = nsh (new swing high)
Dividend Date = n/a
Notes = see commentary from 12/29
IYT
Long
Shares = 70
Trigger = 90.66
Stop = 85.80
Target = 99.70
Dividend Date = n/a
Notes = see commentary from 12/23
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
- 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.
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Notes:
Edited by Deron Wagner,
MTG Founder and
Head Trader