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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
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Morpheus Trading Group - swing trading blog
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Advanced Technical Analysis of ETFs
  • Pullback entry in Commodity Index ETF (DJP) - February 18, 2011 0 comments
    Feb 18, 2011 10:15 AM | about stocks: DJP, JJC
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    The Wagner Daily - February 18, 2011
    Concise technical analysis and picks of the leading global ETFs



    Commentary:

    Stocks reversed off of session lows on Thursday, and carried all five major indices to new highs. However, trade was soft. For a second consecutive day the small-cap Russell 2000 led all indices, as it ended the day 0.7% higher. The S&P MidCap 400, S&P 500, Dow Jones Industrial Average and Nasdaq posted gains of 0.5%, 0.3%, 0.3%, and 0.2% respectively.

    Despite relatively strong price performance in the market, Thursday's internals were mixed. Turnover was off by 15.2% on the Nasdaq and 4.4% on the NYSE. For a second consecutive day advancing volume outperformed declining volume. The ratio of up to down volume ended the session at 2.3 to 1 on the NYSE and 1.5 to 1 on the Nasdaq.

    Based on today's price performance by KBE, the setup has been nullified and we are removing it from the watchlist. We are still monitoring the price action in PALL for a potential add above the three-day high (we will send alert if any action is taken).

    The iPath DJ-UBS Commodity Index Trust ETN (NYSEARCA:DJP) has spent the past 8 weeks consolidating along its 20-day EMA. Recently DJP undercut this key moving average thereby "shaking out" the weak hands. Yesterday DJP rallied almost the entire day and finished virtually at its intraday high. We are placing DJP on the watchlist. For our subscribing members, trade details are available in the watchlist segment of the newsletter.



    The iPath DJ AIG Copper Trust (NYSEARCA:JJC) formed a bullish reversal candle yesterday on an explosive increase in volume. A rally above the two day high of $60.44 presents a possible long trigger for this ETF. We will be monitoring JJC closely for a possible entry point.



    Our trading approach adheres strictly to technical analysis, as we believe that all market information is reflected in the daily price and volume action of charts. Spending an exorbitant amount of time reflecting on news or hunting down explanations as to why the market is moving in a particular direction is in our opinion, a wasteful endeavor. This is why we have maintained a bullish bias despite being cautious about the conviction of the current advance. Still, we have been willing to play the short side of the market when our technical criteria suggest that we should do so.


    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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