Watch This ETF Closely As A Potential Long Candidate (YANG)

Stocks gapped sharply lower at the open on Monday, but clawed their way back to close near session highs. Trade was light. High beta stocks led the decline. The small-cap Russell 2000 plunged 1.6% while the S&P MidCap 400 and the Nasdaq slid 1.3% and 1.2% respectively. The S&P 500 lost 0.9% and the Dow Jones Industrial Average fell 0.8%.

Market internals ended the session mixed. Volume dropped on the Nasdaq by 10.1% and on the NYSE by 6.2%. However, declining volume easily outpaced advancing volume on both exchanges by a factor of 4.4 to 1. The market escaped distribution yesterday, as volume was light. Although the DJIA, S&P 500 and Nasdaq all finished well off session lows, the light volume accompanying the recovery casts a shadow on the significance of the move.

Since rallying to reclaim its 200-day moving average in mid May of this year, the Direxion Daily China Bear 3x ETF (NYSEARCA:YANG) has been consolidating in a range between fourteen and eighteen dollars. Over the past ten sessions, YANG has been holding support of its uptrending 20-day EMA. Yesterday, on a pickup in volume, this ETF gapped up and momentarily rallied above resistance of the trading range. YANG could offer a buying opportunity on a pullback into support of its 20-day EMA. We will be following this inverse ETF closely as a potential long candidate.

YANG

The commentary above is an excerpt from The Wagner Daily stock newsletter. Subscribers to the full version receive our exact entry and exit prices for swing trades of the top stock and ETF picks, access to our market timing model, and more. To get started today, sign up for your 30-day risk-free trial to our Wagner Daily stock newsletter. To learn more about our proven trading strategy, please visit and bookmark our trading blog.

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