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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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Advanced Technical Analysis of ETFs
  • Potential breakout entry in the UltraShort 20+ Bond (TBT) - January 21, 2011 0 comments
    Jan 21, 2011 9:59 AM | about stocks: TBT, RTH
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    The Wagner Daily - January 21, 2011
    Concise technical analysis and picks of the leading global ETFs



    Commentary:

    For the second consecutive day the market was met with heavy selling pressure and all five major indices closed in the red. However, a mid session rally pared what could have been major losses across the board. Even with the bounce, the technology rich Nasdaq, the S&P MidCap 400 and the small-cap Russell 2000 shed 0.8%, 0.8% and 1.1% respectively. The S&P 500 lost 0.1% in yesterday's action. The Dow Jones Industrial Average demonstrated relative strength once again on Thursday. The Blue Chip index finished the day barely below the flatline.

    Market internals reflected poorly on the overall health of the market. Volume was significantly higher on both the NYSE and the Nasdaq. Day over day, trade increased on the NYSE by 10.0% and on the Nasdaq by 9.3%. Declining volume was greater than advancing volume across the board, but the Nasdaq bore the brunt of the selling pressure. The tech heavy index saw declining volume outpace advancing volume by a ratio of 3.1 to 1, while the ratio on the NYSE ended the session at 1.1 to 1.

    Several days ago we received an email from one of our clients asking for our evaluation of the ProShares UltraShort 20+ Year Treasury ETF (TBT). At the time we TBT did not meet our setup criteria. However, based on yesterday's price and volume action we are now placing TBT on the watchlist. A move above Thursday's high of $38.87 may provide a buying opportunity for this ETF. For our subscribing members, details of the setup can be found in the watchlist segment of the newsletter.



    The Retail HOLDRs ETF (RTH) has demonstrated excellent relative strength over the past two days. On over two times its average daily volume, RTH rallied near the January 3rd high of $107.74 yesterday. A move above Thursday's high of $107.47 could provide an entry target for RTH. We will send an intraday alert should we decide to take a position in RTH.



    Over the past two trading sessions market leaders have come under serious selling pressure. Although it's still too early to call a market top, waning leadership raises concern that a turn in the market may be close at hand.


    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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