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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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  • Put The Car In Reverse: (ERY) - September 2, 2011 0 comments
    Sep 2, 2011 10:10 AM | about stocks: EWW, ERY
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    The Wagner Daily - September 2, 2011
    Concise technical analysis and picks of the leading global ETFs



    Commentary:

    After a promising start stocks closed near session lows and snapped a four day winning streak. All five major indices closed in the red with the small-cap Russell 2000 leading the decline as it ended down 2.4%. The S&P MidCap 400 slid 1.5% while the Nasdaq dropped 1.3%. Big cap stocks fared slightly better as the S&P 500 and the Dow Jones Industrial Average contained losses at 1.2% and 1.0% respectively.

    Market internals ended the session mixed. Volume fell across the board. On the Nasdaq volume waned by 12.8% and on the NYSE by 10.3%. However declining volume easily topped advancing volume by a ratio of 6.1 to 1 on the NYSE and 4.1 to 1 on the Nasdaq. Although volume was light and we would not classify yesterday as a distribution day, the price action does not bode well for the market in the wake of Wednesday's choppy reversal action.

    The iShares MSCI Mexico Investable Market Index ETF (NYSEARCA:EWW) formed a massive reversal candle yesterday as it rallied above its 50-day MA and reversed sharply to close near the day's low. This type of price action serves to sweep poorly placed stops, attract market bulls and shake weak hands out of the market. A volume fueled move below yesterday's low of $58.47 could provide a shorting opportunity in this ETF. We are placing EWW on the watchlist. Trade details are available to our subscribers in the watchlist segment of the newsletter.



    Over the past two sessions the Direxion Energy Bear 3x Shares ETF (NYSEARCA:ERY) formed two reversal candles as it undercut and then reclaimed support of its 50-day MA. A move back above the two day high of $16.62 may present a long entry trigger for ERY. ERY is also being placed on the watchlist. Trade details are posted in the watchlist section of the newsletter for our subscribing members.


    Our position in RWM performed well as the small-cap Russell 2000 saw a follow through day and exhibited relative weakness to the other major indices. EWM also performed well as it formed a reversal candle yesterday and appears ready to make another move lower.

    After yesterday's price action the market appears primed for a move lower. However we do have some concern over the drop off in volume yesterday. Under ideal circumstances we would have liked to have seen a strong volume distribution day. However, the market rarely gift wraps trading opportunities.


    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.
    Stocks: EWW, ERY
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