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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 short setup in (PIN) - May 23, 2011 0 comments
    May 23, 2011 9:22 AM | about stocks: EZU, PIN
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    The Wagner Daily - May 23, 2011
    Concise technical analysis and picks of the leading global ETFs



    Commentary:

    Stocks were down across the board on Friday as trade increased. Price action was whippy as stocks lost ground early, reversed in the midmorning to reclaim session highs by 2pm but dropped once again to close in the lower third of the intraday range. By the closing bell all five manor indices were firmly in the red. The small-cap Russell 2000 slid 1.1% while the S&P MidCap 400 and the S&P 500 both dropped 0.8% on the day. The Nasdaq and the Dow Jones Industrial average both shed 0.7% by the closing bell.

    Market internals cast a bearish shadow over the market on Friday. Volume increased on both exchanges as would be expected on an options expiration day. Turnover was up by 15.2% on the Big Board but only marginally higher on the Nasdaq. Declining volume outpaced advancing volume on the Nasdaq by a ratio of 2.2 to 1 and on the NYSE by a factor 2.7 to 1. Despite only a modest increase in volume on the Nasdaq we would still classify Friday as a distribution day for the market.

    Yesterday we entered a long position in the UUP and a short position in IWM via intraday alerts. For our subscribing members, trade details are posted in the open positions segment of the newsletter.

    After attempting to reclaim support of its 50-day and 20-day moving averages, the iShares MSCI EMU Index ETF (NYSEARCA:EZU) reversed sharply on Friday as it gapped down, sold off and closed near the lows of the session. A volume fueled move back below yesterday's low of $38.66 could result in further distribution in this ETF.



    Since gapping down on May 17th the PowerShares India Portfolio ETF (NYSEARCA:PIN) has exhibited relative weakness as it was unable to move higher with the market during the recent reversal and two day rally. Further, INP has been consolidating at its recent swing low for the past four sessions. A move below May 18th low of $22.16 may provide a short entry trigger for this ETF.

    The broad market saw its seventh distribution day in the past four weeks on Friday which suggests the market is continuing to weaken. Given the recent selling into strength a follow through to the downside on Monday could be the start of a difficult week for the market.


    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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