The Wagner Weekly
August 18, 2003

Weekly ETF Snapshot

We experienced incredibly light volume last week, confirming the annual Summer doldrums are in full swing. While there was volatility, there was not much conviction. Experience has taught us to stay mostly on the sidelines when volume is light because follow-through in the direction of a trend is rare when volume dries up. So, it was a slow week overall and we basically just focused on breaking even.

A few of the major indices are attempting to put in a new swing high, but so far they have all come short. The recent multiple day mini-rally has come with below average volume, so protect your holdings more carefully. It does not matter if your positions are winning or losing ones, just as long as you recognize the current status of the trade. QQQ (Nasdaq 100) and MDY (Midcaps) have established swing lows and the new trigger levels are updated. Look for the swing low sign on the MTG Sector Trend Trigger List Notes column as number "2." You will notice that the "Next Trend Reversal Trigger" levels are either the swing low or swing high price for those ETFs with a number 2 in the Notes column. Below are daily charts of QQQ and MDY, as well as their "swing low" support levels:





Sector Notes:

Only one sector, RTH (Retail HOLDR), made a move into the ascending list last week. RTH also made a new high and looks like the first sector out of a consolidation range. Several retailers reported their 2nd quarter earning results and the initial reaction seemed to be positive for the sector. Due to the recent range-bound activity, the latest trend change in RTH has been noted as being choppy, since RTH was on the descending list only the week prior. PPH (Pharmaceutical HOLDR) is down on the descending list, but it has been on a steep decline for about 2 months now. Several other sectors established swing lows and can be reviewed on the latest updated List. EWZ (Brazil) and EWJ (Japan) are back on the ascending list again. The mid and long-term fixed income bonds (IEF, TLT)and the corporate bonds (LQD) placed new lows last week. The short-lived rally last week has failed.

Right-click on this link and select "Save target as" to download this week's "Sector Trend Trigger" list (you will need the free Adobe Acrobat Reader to view the file).

Below is the benchmark 10yr T-Bond, (IEF) for mortgage financing. We have placed a more aggressive trendline to reflect and better represent the current rate of decline. The recent rally established a new swing high and offered us a new second anchor, the purple ellipse.



Closing Thoughts:

We talk about share size quite a bit here. But you may need to know if you want to keep your share size at a fixed share amount or a fixed dollar amount. Those who trade at a fixed share amount measure their progress by the number of points gained or lost. Here, the number of points times the number of fixed shares traded determines your result. The other way is to trade by fixed amount. Percentages rather than points can measure the performance. The latter method is preferred because percentage measures normalize the performance among others. Your trading style or market conditions may determine which money management method to use at certain times. In either case, keep it consistent, and take some time to plan out how you want to execute your trade before jumping in.

Deron Wagner
MTG Founder and President

Chris Chang
MTG Associate Editor

Remember that all previously published issues of both The Wagner Daily and The Wagner Weekly are available in the "Archives" section of the MTG web site. If you are new to our services and wish to broaden your knowledge of ETF trading or our general trading style, we recommend you browse the archives because it is very educational and free! Click here to receive a free trial to MTG's services (limit one per household).

Weekly Reality Report

Since The Wagner Weekly was not published last week, the stats below include trade results from the past two weeks. Below is a summary of the performance of each MTG trade that was closed during the period of August 4 - August 15, 2003. Open positions are not reported until the week they are closed. The stats below represent combined net results from trades we participated in, as called in The Wagner Daily and ETF Real-Time Room:

Click here to view detailed cumulative stats of each trade MTG has made (updated weekly).

Click here for a detailed explanation of how MTG calculates and reports its weekly trading results.


Odds and Ends




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OVERVIEW
Date & Time: October 2 and 3 -  8:00 am to 4:30pm (both days)
10 minute breaks after every 90 minutes of instruction (keeps you fresh!)
Full hour for lunch break on both days
Presented By: Deron Wagner, Founder and President of Morpheus Trading Group
Steve Bell, 8-year trading veteran and QQQ specialist
Peter Reznicek, ETF Trader and moderator of the ETF Real-Time Room
Chris Chang, Associate Editor of The Wagner Weekly
Location: Disneyworld area
Orlando, Florida
Cost: $995 if you register by Sept. 1; $1,095 after Sept. 1
Registration: Click here to register online and reserve your seat


DESCRIPTION
Professional trader, educator, and author Deron Wagner and the team at Morpheus Trading Group will be conducting their first East-Coast Live ETF Trading Workshop in Orlando, Florida on October 2 & 3, 2003. Because we know that most educational trading seminars tend to be heavy in theory, but light on showing actual trading activity and results, Wagner and the Morpheus team will be "putting their money where their mouths are" by trading an account with actual capital, in real-time for two full days! In addition, you will learn the Morpheus methodology on which the daily trades presented in both The Wagner Daily and ETF Real-Time Room are based.

During both days of this workshop, you will see Wagner in action when he applies his ETF trading methodology by trading his personal account live during the entire trading day. In addition, you will learn advanced trading techniques from Morpheus associates Steve Bell, Peter Reznicek, and Chris Chang. If you've ever wanted to sit next to a successful, professional trader for a few days, this is your chance to do so! In addition, attendees are encouraged to bring their own laptop computers so they can simultaneously trade their own accounts real-time, via our high-speed wireless (Wi-Fi) network. Furthermore, a large percentage of the workshop will be interactive. As such, we recommend you bring your own or borrow a friend's laptop computer. While the profit and losses of each live trading day is unknown, one thing is for certain -- you will walk away from the workshop armed with an abundance of practical knowledge.

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ALL ATTENDEES WILL RECEIVE

  • Over 14 hours of "hands-on" training and real-time trading instruction

  • Comprehensive ETF Trading Guide you can take along for review

  • Complimentary copy of Deron Wagner's first book, The Long-Term Day Trader

    • >>>Click here to register online & reserve your seat<<<

    Seats are limited and advance registration is required.



    Yours in success,

    Deron M. Wagner
    Founder and President

    Morpheus Trading Group
    www.morpheustrading.com
    The Leader in ETF Trading!

    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 Weekly ( 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 buy, sell or have a position 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.
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