ETFs and market commentary:
Stocks slid modestly on Monday on very light trade. All five major indices finished lower, but barely. The major indices chopped in a tight range for the entire day and eventually closed just below session highs. The small-cap Russell 2000 fell 0.3%, while the Nasdaq, DJIA and S&P MidCap 400 shed 0.1%. The S&P 500 demonstrated the most relative strength yesterday as it closed fractionally lower. The gold, oil, utilities, healthcare and transportation sectors all struggled yesterday, while solar energy, biotechnology, oil services and networking outperformed.
Market internals were mixed on Monday as volume plummeted. on the Nasdaq, trade fell by 22.0% and on the NYSE it dropped 23.6%. Declining volume upped advancing volume by 1.1 to 1 on the NYSE and 1.2 to 1 on the Nasdaq. Monday would be considered a consolidation day for the broad market, as volume dropped and price action tightened.
Yesterday, on a pickup in volume, the SPDR S&P Oil & Gas Exploration ETF (XOP) rallied to close near session highs and within striking distance of key resistance. If XOP can rally above resistance of the January 26, 2011 high of $57.32, it could provide an excellent buying opportunity. We are monitoring this ETF carefully for a possible long entry.
Since its big breakout move on January 25, 2011, the iShares Gold Trust (IAU) found resistance near $17.20 and has now pulled back near support of its 20-day EMA and uptrend line. When gold broke out two weeks ago, we received quite a few emails inquiring whether or not gold offered a buying opportunity. At that time, we stated that it was probably not the time to enter the precious metal because the trade was too extended. However, we also stated that gold may offer a buying opportunity on a pullback. Now that gold is pulling back, an undercut of the 20-day EMA could provide a possible buy entry point for IAU. However, an undercut is not a trade setup. In order for IAU to provide a buying opportunity, it must first show some sign of stabilizing from this pullback (ie. basing action and the formation of a reversal candle). Entering an ETF simply because it approaches or touches a key support level is not advisable as there is no way to know whether or not the uptrend will resume. Trade setups are what make a trade legitimate. We will be monitoring IAU closely for a possible long entry trigger.
Both IYT and DVY performed well yesterday as both maintained support at the 20-day EMA on the 60-minute chart. Following a breakout, we will often consult the 60-minute charts as a means of determining the strength of an ETF when it pulls back. As long as the price action on the 60-minute chart remains strong, there’s generally little to worry about. Yesterday’s broad market price action was ideal following Friday’s bullish surge. Distribution days have been virtually nonexistent since late December of last year. At least for the moment, it appears as if the market is determined to continue the move higher.
ETFs and market commentary:
PPH
Long
Shares = 300
Trigger = 74.04
Stop = 72.22
Target = new swing high
Dividend Date = n/a
Notes = We’ve been monitoring this trade for potential entry and it remains on our watchlist.
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 DailySubscriber Guide for important, automatic rules on trigger and stop prices
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Notes:
Stocks:
Our market timing model remains in buy mode, as we continue to see breakouts working with very little distribution in the market.
The OPK Full-Serve setup is looking good:
We added MNST and CELG to the Full-Serve watchlist. See details below.
Daily Stock Summary
Below is an overview of all “full-serve” open positions, as well as a performance report on all “full-serve” positions that were closed only since the previous day’s newsletter. Net P/L figures are based on the $50,000 model account size. Changes to open positions since the previous report are listed in red text below.
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Notes:
Relative Strength Watchlist:
The Relative Strength (or RS) Watchlist makes it easy for subscribers to import data into their own scanning software, such as Tradestation, Interactive Brokers, and TC2000. The list is comprised of the strongest 100 (or so) stocks in the market over the past six to 12 months. The scan is based on the following criteria and is updated every Monday:
Click here to view this week’s Relative Strength Watchlist in excel
Click here to view this week’s Relative Strength Watchlist as a text file
market timing model: BUY Signal generated on close of Sept. 21 Market timing model is…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…
market timing model: BUY Signal generated on close of Sept. 21 On a buy signal.…