For our exact entry, stop, and target prices of the stocks discussed in the video (and more), become a subscriber of our swing trading newsletter, The Wagner Daily (less than $2 per day based on annual subscription). Your satisfaction is guaranteed.
Subscribers of The Wagner Daily trading newsletter receive clear entry, stop, and target prices for today’s best stock picks and ETF picks for swing trading (including those discussed in the video above). Your full satisfaction is assured, and the subscription is less than $2 per day (based on annual subscription). Why not give our disciplined and proven trading system a try?
Subscribers of The Wagner Daily trading newsletter receive clear entry, stop, and target prices for today’s best stock picks and ETF picks for swing trading (including those discussed in the video above). Your full satisfaction is assured, and the subscription is less than $2 per day (based on annual subscription). Why not give our disciplined and proven trading system a try?
Stocks showed promise at the open yesterday morning, but a late wave of selling on higher trade subsequently pulled the markets down to session lows. For a second consecutive day, all the major indices finished in negative territory. Larger cap issues showed the most weakness on the day, with the Dow Jones Industrial Average losing 0.5% and the S&P 500 losing falling 0.6%. The S&P MidCap 400 slid 0.4%, while the Nasdaq and the small-cap Russell 2000 fell 0.3% and 0.2% respectively.
Market internals were bearish on Tuesday. Volume spiked by 9.7% on the Nasdaq and 11.7% on the NYSE. Declining volume easily outpaced advancing volume on both exchanges. On the NYSE, the adv/dec volume spread ratio finished at negative 3.7 to 1, and was negative by just over 2 to 1 on the Nasdaq. The combination of higher volume and negative volume spread ratios tells us mutual funds, banks, hedge funds, and other institutions were in sell mode yesterday.
The Direxion Small Cap 3x Bear ETF ($TZA) is on the verge of breaking out above a major resistance level, as annotated on the chart below. A rally above yesterday’s (May 15) high of $20.98 could provide a buying opportunity for a near-term trade in this inversely correlated ETF. As with all “short ETFs,” which typically underperform their underlying indexes with longer holding periods, this swing trade is only intended to be held for a quick “pop” of no more than a few days (as opposed to our typical holding time of 1 to 3 weeks). Regular subscribers of The Wagner Daily swing trading newsletter with our best daily stock picks should note the “watchlist” section below for our exact entry, stop, and target prices on the $TZA trade setup (as well as two other trade setups today). The technical trade setup for TZA is shown on the daily chart below:
Yesterday, on a burst of volume, the Market Vectors Retail ETF ($RTH) formed a bearish reversal candle as it rallied to test resistance of its 50-day MA before fading into the close. Now, a volume-fueled move below yesterday’s low of $40.90 could provide a potential short sale entry trigger for this ETF:
Yesterday, the $SOXS trade setup hit its trigger price and we entered the trade. Although $SOXS was under pressure for much of the session, the late-day weakness in the broad market propelled this ETF to close at its intraday high, as well as its highest closing price of the past four months. So far, this near-term “trend reversal” setup is shaping up nicely. Recall this is actually a re-entry into $SOXS because we already locked in a nice profit at the beginning of this month (bought the pullback to the 20/50-day MA convergence, then quickly sold into strength a few days later).
Based on yesterday’s price and volume action in the broad market, as well as the inability of stocks to hold their morning rally attempt, more near-term downside could be in store. With the exception of the S&P MidCap 400 Index, all the major indices have fallen below support of their prior lows from April, resulting in the formation of new “swing lows.” If the stock market is unable to recover quickly on this morning (May 16), we could see a significant round of selling momentum in the near-term.
Subscribers of The Wagner Daily trading newsletter receive clear entry, stop, and target prices for today’s best stock picks and ETF picks for swing trading (including those discussed in the video above). Your full satisfaction is assured, and the subscription is less than $2 per day (based on annual subscription). Why not give our disciplined and proven trading system a try?
Subscribers of The Wagner Daily trading newsletter receive clear entry, stop, and target prices for today’s best stock picks and ETF picks for swing trading (including those discussed in the video above). Your full satisfaction is assured, and the subscription is less than $2 per day (based on annual subscription). Why not give our disciplined and proven trading system a try?
Over the past five sessions, the Direxion Financial Bear 3x Shares ETF ($FAZ) has been consolidating at support of its 20-day and 50-day moving averages. FAZ has also tested resistance around the $23.70 area three times within the past five weeks. As such, a move above this pivotal resistance level could generate momentum that leads FAZ substantially higher in the near-term. Regular subscribers of The Wagner Daily should note our specific entry, stop, and target prices for this swing trade in “today’s watchlist” section of the newsletter. The following daily chart illustrates the technical setup for this potential trade:
As a reminder, note that FAZ is a leveraged “short ETF.” As with many other inversely correlated ETFs, especially the leveraged ones, this trade is designed to be of a very short-term nature. If it triggers our price for buy entry, we only plan to hold for a quick pop (anticipated hold time of just 3 to 4 days). Our average holding period for most swing trades is 1 to 3 weeks, but inversely correlated, leveraged ETFs typically underperform the underlying index as the holding period increases. This is discussed in more detail in my latest book.
Despite yesterday’s higher finish, it is noteworthy that all the major indices closed near their intraday lows. The market continues to struggle as leadership stocks are being hit hard. Yesterday, CRM fell over 10% and PCLN dropped almost 6.0%. Without solid leadership amongst individual stocks, the broad market is typically unable to move significantly higher. For the moment, more and more short setups seem to be developing, and we are finding fewer potential long candidates during our nightly research. For now, our bias remains on the short side of the market, but patience is required to allow setups to unfold.
Subscribers of The Wagner Daily trading newsletter receive clear entry, stop, and target prices for today’s best stock picks and ETF picks for swing trading (including those discussed in the video above). Your full satisfaction is assured, and the subscription is less than $2 per day (based on annual subscription). Why not give our disciplined and proven trading system a try?
For our exact entry, stop, and target prices of the stocks discussed in the video (and more), become a subscriber of our trading newsletter, The Wagner Daily (less than $2 per day based on annual subscription). Your satisfaction is guaranteed.
Recently, we entered a swing trade in ProShares UltraShort MSCI Emerging Markets ($EEV). Inversely correlated “short ETFs” such as EEV are designed to move in the opposite direction of their underlying index. This allows us to basically sell short the underlying index through buying (going long) the inverse ETF. In this case, buying EEV was the same as taking a bearish position on the MSCI Emerging Markets Index (note that “short ETFs” are designed to be used only for quick, short-term trades).
In our May 4 newsletter, subscribers of The Wagner Daily were alerted to a potential buy entry in EEV above the high of May 3. We liked the reversal bar action on May 1, followed by the false trigger on May 3, which provided a clear entry point above the May 3 high. The chart below details the technical buy setup prior to our entry:
That day, EEV triggered its buy entry at $26.91, and subsequently followed through nicely to the upside, closing at its high of the day on above average volume. Because the broad market was selling off sharply and approaching near-term oversold levels, EEV was taken as a very short-term trade (2-5 days), as we were looking to sell into strength on a breakout above resistance at the $28.00 area. Due to the sharp selling action in the market on the morning of May 8, EEV broke out above $28.00 and hit our price target of $28.32, allowing us to neatly book a 5.5% gain on just a 3-day hold. The exit point is shown on the chart below:
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