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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
  • Volatility = Smaller Position Size (DVY) (AGA)- December 8, 2011 0 comments
    Dec 8, 2011 9:28 AM | about stocks: DVY, AGA
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    The Wagner Daily - December 8, 2011
    Concise technical analysis and picks of the leading global ETFs



    Commentary: Commentary:

    Stocks ended the day mixed in another skittish session. Stocks fell sharply at the open but recovered to close near sessions highs on stronger trade. By the closing bell the S&P MidCap 400 and the small-cap Russell 2000 had slid 0.2% and 0.1% respectively. The Nasdaq closed just fractionally lower. The Dow Jones Industrial Average was the day's best performer, as it tacked on 0.4%. The S&P 500 managed a modest gain of 0.2%.

    For the second day in a row, market internals were mixed. Volume climbed by 11.0% on the Nasdaq and by 14.0% on the Big Board. However, declining volume outpaced advancing volume on the Nasdaq by a factor of 1.2 to 1. On the NYSE advancing volume outperformed declining volume by 1.4 to 1. Yesterday's sharp intraday reversal and higher volume, point to institutional accumulation despite the mixed price action. Yesterday also marked the fifth consecutive consolidation day for the broad market.

    The iShares Dow Jones Select Dividend Index (DVY) formed a reversal candle yesterday as it sold off sharply, tested the lows of the trading range, but ultimately recovered to close near session highs. A volume powered move back above the three day high of $53.17 could present a buying opportunity in this ETF. We are placing DVY on the watchlist. Trade details are available to our subscribers in the watchlist section of the newsletter.



    On December 1st, the DB Agricultural Double Short ETF (AGA) formed a distinct reversal candle, as it undercut its 20-da EMA. This price action serves to sweep stops and shake any weak hands out of the trade. Yesterday, on a burst in volume, AGA demonstrated relative strength as it gapped higher and closed near session highs. Further, it tested the high of the reversal candle established on December 1st. A volume fueled move above yesterday's high of $19.73 could provide a buy entry trigger in this ETF. We are placing it on the watchlist. Trade details are posted in the watchlist section of the newsletter for our subscribers.



    The market appears to be headed higher, as it has been consolidating for five consecutive days at the highs of the November 30th rally. However, the intraday volatility warrants caution and we have therefore reduced our trade size to account for the whippy price action.


    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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