Potential short setup in (TUR) – The Wagner Daily
The Wagner Daily – March 15, 2011
Concise technical analysis and picks of the leading global ETFs
Commentary:
Stocks closed modestly lower yesterday and well off the session lows. Trade was mixed on the session. However, as of this writing, the DJIA, Nasdaq and S&P futures are all trading down over 2%. With the Nikkei down over 17% in two sessions, a sharp selloff in the US markets would not come as a surprise. All five major indices closed in the red yesterday. The small-cap Russell 2000 ended the day lower by 0.7%. The S&P 500 slid 0.6%, while the S&P MidCap 400 and the Nasdaq both shed 0.5%. The Dow Jones Industrial Average demonstrated the most resiliency as it dropped only 0.4%.
Market internals were mixed on Monday. Volume dropped by just over 4% on the Nasdaq but increased by 6% on the NYSE. Declining volume outpaced advancing volume by a ratio of 2.3 to 1 on both indices.
Via an intraday alert, we opened a short position in the Retail HOLDRS ETF (RTH) yesterday. For our subscribing members, trade details are available in the open positions segment of the newsletter.
Our position in the ProShares UltraShort QQQ ETF (QID) appears ready for another advance. A volume fueled move back above the two day high of $54.46 may provide an opportunity to add to the position.
In the March 9th Newsletter we stated that, “The iShares MSCI Turkey Investable Market Index ETF (TUR) has been in a “stair step” downtrend since November of 2010. A rally back into the downtrend line or the 50-day MA could provide a short entry for this ETF“. Yesterday, TUR rallied into the 50-day MA. Given current market conditions, we wouldn’t be surprised to see a quick reversal in this ETF. For ease of comparison, the March 9th chart of TUR has also been provided below.
Based on the sharp selloff in the Asian markets overnight, we anticipate similar action in the US markets today. Market leadership appears to be waning and our overnight research revealed a complete absence of potential long setups. For the moment, it appears that we are well positioned to participate in a possible market reversal. Due to market conditions we are more likely to open new positions intraday than by predetermined setups. This is often our approach during sharp reversals and whippy market action, as gaps become commonplace.
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.
