Potential short setup in (ILF) – The Wagner Daily
The Wagner Daily – January 28, 2011
Concise technical analysis and picks of the leading global ETFs
Commentary:
The market closed higher on Thursday, but volume was off. All five major indices finished in positive territory, with the Nasdaq leading the way. The tech rich index closed the day higher by 0.6%. The S&P MidCap 400 tacked on 0.5%, while the S&P 500 and the small-cap Russell 2000 both improved by 0.2% in yesterday’s action. For the second consecutive session, the Dow Jones Industrial closed fractionally higher.
Volume was down on Thursday. On the NYSE volume drifted lower by 8.4%, while the Nasdaq saw turnover decrease by a modest 0.6%. Advancing volume held the upper hand on Thursday, as it outpaced declining volume by 1.5 to 1 on the NYSE and 2.0 to 1 on the Nasdaq.
The iShares S&P Latin America 40 Index (ILF) is close to losing major support. Yesterday, on a big spike in volume ILF opened near the session high and closed near the session low. A break below Thursday’s low of $51.97 provides a potential short trigger for this ETF. We are placing ILF on the watchlist. Trade details are provided for our members in the watchlist segment of the newsletter.
Since losing Support on January 24th, the iShares MSCI Thailand Investable Market Index ETF (THD) has spent the past three sessions rallying back towards resistance. A move back into the $61.00 – $62.00 range offers a possible short trigger for this ETF.
Over the past three weeks the Regional Bank HOLDRS ETF (RKH) has been consolidating in a bullish pennant like formation. A volume fueled rally above the January 21st high of $88.63 may provide a buying opportunity in RKH.
The market continues to plod higher but without broad participation. There is clear evidence of money rotating among sectors. Broad market volume continues to remain weak.
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.
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