Seeking Alpha

Morpheus Tradin...'s  Instablog

Morpheus Trading Group
Send Message
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
My company:
Morpheus Trading Group
My blog:
Morpheus Trading Group - swing trading blog
My book:
Advanced Technical Analysis of ETFs
  • Will The Holdouts Crack? (SSG) - September 12, 2011 0 comments
    Sep 12, 2011 9:22 AM | about stocks: SSG, USO
    MTG logo

    The Wagner Daily - September 12, 2011
    Concise technical analysis and picks of the leading global ETFs



    Commentary:

    In a follow-up to Thursdays action stocks were punished on Friday on higher trade. All five major indices closed lower by over 2.0% as stocks gapped down at the open, rallied until the 11:00 o'clock reversal period and then sold off for the remainder of the day. For a second day in a row the small-cap Russell 2000 was the day's big loser. By the closing bell the high beta index fell 3.0% Both the S&P 500 and the Dow Jones Industrial Average plummeted 2.7% while both the Nasdaq and the S&P MidCap 400 both plunged 2.4%. Needless to say, it was not a good day for Wall Street.

    Market internals deteriorated significantly on Friday. On the NYSE the bearish price action was backed by a 29.4% spike in volume. On the Nasdaq turnover increased by just over 4.0%. Declining volume outpaced advancing volume by a whopping 30 to 1 on the Big Board and 8.2 to 1 on the Nasdaq. Institutions were actively selling on Friday as evidenced by the uptick in volume. Based on this action we would classify the Friday as a clear distribution day across the board.

    We closed our long position in EUO to capture a healthy profit of over 4.0% in just two days. We decided to take profits on EUO given that this is the first rally above the 200-day since this breakout move began on September 1st. Typically, the first test of a major moving average is met with selling pressure soon after the breakout. We will be looking for a possible re-entry on this trade into a pullback.

    The ProShares UltraShort Semiconductor ETF (NYSEARCA:SSG) may offer a shorting opportunity. SSG has formed consecutive reversal candles on increasing volume at its 20-day EMA. Further, it has done so on increasing volume. A move above yesterday's high of $63,39 provides a potential buying opportunity in this inverse ETF. We are placing SSG on the watchlist. For our subscribing members, details for this trade are posted in the watchlist segment of the newsletter.


    The United States Oil Fund ETF (NYSEARCA:USO) has been finding it difficult to reclaim support of its 20-day and 50-day moving averages. However yesterday, USO formed a reversal candle which suggests that it might be prepared for a short term move higher. In addition, the low of yesterday's reversal candle now serves as a key "pivot point" of support. For the moment USO offers two possible short setups. The first would involve a short entry if USO were to "overcut" the 50-day MA and quickly reverse lower and the second would be if USO were to quickly reverse on Monday and lose support of yesterday's low at $33.25. We will be monitoring this ETF for a potential short entry


    The market continues to exhibit weakness as evidenced by yet another distribution day on Friday. Still, not all leaders have broken down as AAPL, PCLN and AMZN have all held support over the past six weeks. However, if these remaining hold-outs begin to crack we would anticipate another significant round of selling in the broad 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.
Back To Morpheus Trading Group's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

Comments (0)
Track new comments
Be the first to comment
Full index of posts »
Latest Followers

StockTalks

More »

Latest Comments


Posts by Themes
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.