Stocks closed out the second quarter of the year with little fanfare
yesterday, as the major indices finished with mixed results. The broad market
feebly attempted to rally in the morning, then drifted back down in the
afternoon. Weakness in the tech arena caused the Nasdaq Composite to fall 1.0%
and suffer its third straight day of losses. The S&P 500 eked out a gain of
0.1%. The Dow Jones Industrial Average was unchanged. Small and mid-cap stocks
showed relative weakness alongside of the Nasdaq. The Russell 2000 and S&P
Midcap 400 indices shed 1.2% and 0.5% respectively. The Nasdaq Composite closed
at its dead low of the day, while both the S&P 500 and Dow Jones Industrial
Average settled near the bottom third of their intraday ranges. Sustaining its
worst monthly losses in nearly six years, the S&P 500 plummeted 8.6% in
June. The Nasdaq Composite similarly shed 9.1%. Blue chips fared the worst, as
the Dow Jones Industrial Average tumbled 10.4%.
Turnover eased across the board, indicating a bit of apathy amongst traders.
Total volume in the NYSE was 4% lighter than the previous day's level. Trading
in the Nasdaq declined 10%. Despite the slightly higher closing price of the
S&P 500, declining volume in the NYSE marginally exceeded advancing volume.
The Nasdaq adv/dec volume ratio was negative by approximately 3 to 1.
In yesterday's Wagner Daily, we
proposed the idea of buying the StreetTRACKS Gold Trust (GLD) and/or Market
Vectors Gold Miners (GDX) on pullbacks to their 20-period exponential moving
averages on the hourly charts. Recently, we also wrote a mini-lesson discussing
how reliably ETFs can be bought on their first pullback to that moving average
after they breakout. Astute short-term traders who paid attention to yesterday
morning's GLD/GDX detailed entry suggestion were subsequently rewarded with the
ideal buy point later in the afternoon. Looking at the hourly charts of GLD and
GDX below, notice how both ETFs perfectly pulled back to nearly touch support of
their 20-EMAs at mid-day, then resumed their recent bullish momentum in the
afternoon:
Though we provided the parameters for ideal daytrades in GLD/GDX, we did not
"officially" buy either ETF because of their recent patterns of nasty opening
gap downs. However, since June 26, there have been decidedly stronger trends in
the precious metals ETFs.
