The Wagner Daily - April 18, 2011
Concise technical analysis and picks of the leading global ETFs
Stocks closed modestly higher on Friday as volume increased. The market sold off for the first 30 minutes, reversed course until 1:00 pm and consolidated for the remainder of the day. All five major indices closed in positive territory with the small-cap Russell 2000 leading the way. The high beta index tacked on 1.1% for the session. The S&P MidCap 400 climbed 0.8%, while the Dow Jones Industrial Average, S&P 500 and the Nasdaq posted gains of 0.5%, 0.4% and 0.2% respectively.
Market internals were sufficient to qualify both the Nasdaq and the NYSE for an accumulation day. Volume was higher on the NYSE by 15% on the Nasdaq by 4.7%. Advancing volume was higher than declining volume by 1.8 to 1 on the NYSE and 1.5 to 1 on the Nasdaq. Overall the market performed reasonably well against the backdrop of an enormous down day for Google (NASDAQ:GOOG) and sharp selling in Apple (NASDAQ:AAPL).
The First Global Wind Energy ETF (NYSEARCA:FAN) gapped down and retested its 20-day MA on Friday before reversing and closing near its intraday high. Further, the Accumulation-Distribution Histogram continued its upward trend despite the gap down. FAN still appears prepared to move higher. Based on Friday's price action we may consider moving the entry trigger for this ETF above the two day high of $11.91. Should we decide to change the trigger price for FAN we will do so via an intraday alert.
Our position in QID continues to show signs of moving higher. This ETF continues to hold support at both its 20-day EMA and the 50-day MA. Further, the Accumulation Distribution Histogram continues to solidly uptrend. This uptrend in the Accum./Dist. Histogram has remained in place despite the selloff and consolidation of QID since March 16th. This type of divergence between price action and Accumulation/Distribution is typically considered bullish. A move above the two day high of $53.11 may provide a buy trigger to add to our position in QID.
Immediately following the close on Friday the S&P 500 and Nasdaq futures climbed higher. However as of this writing both the E-mini Nasdaq-100 Continuous Contract and the E-mini S&P 500 Continuous Contract are down approximately 0.5%. Although the Nasdaq Composite ($COMPX) has moved back above its 50-day MA, the Nasdaq 100 ($NDX.X) continues to struggle in its attempt to move back above both the 20-day EMA and 50-day MA. We are closely monitoring the big players on the Nasdaq as they may very well hold the key to the next significant move in the market.
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.
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