Few Opportunities – The Wagner Daily
The Wagner Daily – July 27, 2011
Concise technical analysis and picks of the leading global ETFs
Commentary:
Stocks closed lower on Tuesday on higher trade. For the second time in as many days all five major indices closed in the red. The Dow Jones Industrial Average led the decline as it shed 0.7% on the session. The S&P MidCap 400 and the S&P 500 fell by 0.6% and 0.4% respectively. The small-cap Russell 2000 fell by a modest 0.2% while Nasdaq slid fractionally.
Market internals were bearish on Tuesday. Volume increased by 8.6% on the Nasdaq and 9.4% on the NYSE. Declining volume held the upper hand on both exchanges. By the closing bell the Spread Ratio was at 1.6 to 1 on the NYSE and 1.2 to 1 on the Nasdaq in favor of declining volume. Tuesday’s internals point to a modest distribution day on both exchanges.
Over the past two weeks, the SPDR S&P Retail ETF (XRT) has been bullishly consolidating above its 20-day EMA. A volume fueled moved back above the July 21st high of $55.31 could present a buying opportunity in this ETF. We are placing XRT on the Watchlist. Trade details are available to our subscribing members in the watchlist segment of the newsletter.
The SPDR S&P Select Health Care ETF (XLV) has been consolidating in a tight trading range near its all time highs since May of this year. XLV is now in the midst of a pullback to the lower edge of this trading range. Should XLV hold support at the current level, it may provide a buying opportunity with a move back above the July 21st High of $31.79. We will continue to monitor this ETF for a possible long entry.
The market continues to struggle to find direction. Because of the choppy price action our daily scans are revealing few quality trading opportunities on either side of the market. We are patiently awaiting the next news out of Washington.
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.
