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Deron Wagner is the founder and portfolio manager of Morpheus Trading Group. His daily focus is managing and trading the Morpheus Capital Hedge Fund, which he founded in April of 2004. He also teaches his swing trading strategy with The Wagner Daily newsletter, which provides exact entry, exit,... More
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Morpheus Trading Group - swing trading blog
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Advanced Technical Analysis of ETFs
  • Potential breakout entry in (KIE) - January 6, 2011 0 comments
    Jan 6, 2011 8:52 AM | about stocks: KIE, PDP
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    The Wagner Daily - January 6, 2011
    Concise technical analysis and picks of the leading global ETFs



    Commentary:

    All major indices closed up on Wednesday. The market got off to a slow start, but found its footing late in the morning session and rallied throughout the remainder of the day. The Dow ended the session by posting a fourth straight advance. The higher beta indices rebounded well following Tuesdays difficult trading. The small-cap Russell 2000 led the charge as it posted an impressive 1.2% gain on Wednesday. The Nasdaq closed up by 0.8% while the S&P MidCap 400 finished higher by 0.6%. The S&P 500 and the Dow Jones Industrial Average both lagged the technology rich indices, but still managed to move higher by 0.5% and 0.3% respectively.

    Volume was mixed on Wednesday. Volume on the Nasdaq increased by 4% while volume on the NYSE decreased by approximately 4%. The ratio of Advancing volume to declining volume was positive on both major indices. Up volume outpaced down volume on the NYSE by a factor of 2.4 to 1 and on the Nasdaq by a factor of 2.1 to 1.

    Yesterday, the Market Vectors Junior Gold Miner ETF (NYSEARCA:GDXJ) hit our trigger and we entered the position (short). Despite its recovery after gapping down, GDXJ did not exhibit signs of major institutional accumulation. Volume was lighter day over day and GDXJ both traded and closed at a new nine day low.

    Our position in PBW has been acting well. PBW has been consolidating for three days on declining volume, just below key resistance of $10.70. A volume fueled move above this mark should bode well for this trade.

    As with all of the financials recently, the SPDR KBW Insurance ETF (KEI), is consolidating at its 52 week highs. A move above the three day high of $43.23 on a burst of volume could trigger a buy signal for KEI. This is not an official call. This is a higher risk trade as it looks to take advantage of the momentum amongst financials.



    The ProShares Exchanged Traded Fund Trust (NYSEARCA:PDP), has been consolidating for six weeks at the 52 week highs. A move above the January 3rd high of $23.94 could provide a buy trigger for this ETF.



    The market has been sending mixed signals over the past several sessions. Our daily scans are providing fewer quality setups. Although our bias remains on the long side of the market, our technical trading style suggests that we remain cautious and wait for quality trade entries.

    The commentary above is an abbreviated version of our daily ETF trading newsletter, The Wagner Daily. Subscribers to the full version receive specific ETF trade setups with detailed trigger, stop, and target prices, as well as daily updates on all open positions. Intraday Trade Alerts are also sent via e-mail and/or text message, on as-needed basis. For your free 1-month trial to the full version of The Wagner Daily, or to learn about our other services, please visit morpheustrading.com.

    Deron Wagner is the Founder and Head Portfolio Manager of Morpheus Trading Group, a capital management and trader education firm launched in 2001. Wagner is the author of the best-selling book, Trading ETFs: Gaining An Edge With Technical Analysis (Bloomberg Press, August 2008), and also appears in the popular DVD video, Sector Trading Strategies (Marketplace Books, June 2002). He is also co-author of both The Long-Term Day Trader (Career Press, April 2000) and The After-Hours Trader (McGraw Hill, August 2000). Past television appearances include CNBC, ABC, and Yahoo! FinanceVision. Wagner is a frequent guest speaker at various trading and financial conferences around the world, and can be reached by sending e-mail to: deron@morpheustrading.com.



    DISCLAIMER: There is a risk for substantial losses trading securities and commodities. This material is for information purposes only and should not be construed as an offer or solicitation of an offer to buy or sell any securities. Morpheus Trading, LLC (hereinafter "The Company") is not a licensed broker, broker-dealer, market maker, investment banker, investment advisor, analyst or underwriter. This discussion contains forward-looking statements that involve risks and uncertainties. A stock's actual results could differ materially from descriptions given. The companies discussed in this report have not approved any statements made by The Company. Please consult a broker or financial planner before purchasing or selling any securities discussed in The Wagner Daily (hereinafter "The Newsletter"). The Company has not been compensated by any of the companies listed herein, or by their affiliates, agents, officers or employees for the preparation and distribution of any materials in The Newsletter. The Company and/or its affiliates, officers, directors and employees may or may not buy, sell or have positions in the securities discussed in The Newsletter and may profit in the event the shares of the companies discussed in The Newsletter rise or fall in value. Past performance never guarantees future results.

    Charts created by TradeStation (tradestation.com).

    © 2002-2010 Morpheus Trading, LLC
    Reproduction without permission is strictly prohibited.
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