Wagner Daily: A Closer Look At These ETFs (EEM, EDZ, TBT)

Share This Article
February 25, 2014 1:03pm NYSE:EDZ NYSE:EEM

technical chart lookThe iShares MSCI Emerging Markets Indx (ETF)(NYSEARCA:EEM) has rallied into resistance from a broken uptrend line and a declining 50-day MA. Yesterday’s (February 25) price action stalled above 39.70 for the second time in two

weeks. There is also resistance from a prior swing low in mid-January at $40:


The stalling action as the ETF bounces into resistance of its 50-day moving average presents us with a low-risk entry point on the short side. However, rather than short selling $EEM, we will look to buy the inversely correlated Direxion Daily Emr Mkts Bear 3x Shs(ETF)(NYSEARCA:EDZ), which is a 3x leveraged short ETF:


Going into today, we are stalking $EDZ for potential swing trade entry.

Another “short ETF” we are monitoring for potential trade entry is the ProShares UltraShort Lehman 20+ Yr(ETF)(NYSEARCA:TBT).

After breaking down below a key swing low in January, $TBT failed to follow through to the downside and formed a bullish reversal candle during the week of February 7.

The false breakdown and reversal formed a double bottom like pattern, with an undercut on the weekly chart below. If the price action clears $73, $TBT might be ready to rip higher over the next several weeks:


Even though our market timing model is currently in “Buy” mode, both of these ETFs have a low correlation to the direction of the US equities markets. That’s the nice thing about ETFs — they can provide opportunities outside of the standard trend trading that comprises the bulk of our trading operations.

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: [email protected]

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.

5 WINNING Stock Chart Patterns

Read Next

Free Investing Ideas Newsletter!

Join over 70,000 investors who get the latest insights and top rated picks from our free investment newsletter.

Most Popular

9 'MUST OWN' Growth Stocks for 2021

Explore More from ETFDailyNews.com

Free Investment Newsletter

Join over 70,000 investors who get the latest insights and top rated picks from our free investment newsletter.

ETFDailyNews.com respects your privacy.

Best ETFs

We've rated and ranked nearly 2,000 ETFs and ETNs using our proprietary SMART Grade system.

View Top Rated ETFs

Best Categories

We've ranked dozens of ETF categories based on relative performance.

Best ETF Categories