The Wagner Daily - February 15, 2011
Concise technical analysis and picks of the leading global ETFs
For the most part stocks finished higher on Monday, but trade was light. The S&P MidCap 400 and the small-cap Russell 2000 led all the major averages, as both advanced 0.5% for the session. The Nasdaq and The S&P 500 improved by 0.3% and 0.25% respectively. The Dow Jones Industrial average ended the day fractionally lower.
Market internals ended Monday's session mixed. For the second consecutive day volume was markedly lower on both indices. On the Big Board turnover fell by 14.3% while on the Nasdaq it was lower by just over 5.0%. Advancing volume outpaced declining volume on the NYSE by a ratio of 1.5 to 1 and on the Nasdaq by a factor of 1.4 to 1.
Yesterday, URA hit its trigger and we entered the position. URA closed near the high of the session and appears to be on its way to setting a new high. We were stopped out of our remaining shares of ECH and sold IJT to lock in a healthy gain. We also closed the position in FDN netting a gain of approximately 1.2 points.
The PowerShares Financial Preferred ETF (NYSEARCA:PGF) has spent five consecutive days consolidating in a tight range. A move above resistance at $18.00 may present a buying opportunity in PGF. We are monitoring this setup for a possible long entry.
Yesterday, the Market Vectors Coal ETF (NYSEARCA:KOL) rallied back above the 50-day MA on increasing volume. A volume assisted move back above $47.20 could represent a buy trigger for this ETF.
The broad market continues to plod higher in what we've been referring to as the "range bound rally". This may be largely explained by a lack of volatility in the market and the rotation of money among ETF classes. It is noteworthy that our overnight research revealed very few quality long or short setups. This suggests a pullback or several days of consolidation would be in order.
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: email@example.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.