The Wagner Daily – Nasdaq 100 at Support Level

The Wagner Daily – January 10, 2022

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MTG Market Timing Model –  Nasdaq sell, S&P 500 still holding on to the 50ma (stand by for sell)

Our timing model was designed to keep our trades in line with the prevailing market trend, not to call tops or catch bottoms in S&P 500 or Nasdaq Composite.

today’s watchlist (potential trade entries):

open positions:

closed positions:

position notes:

• no trades triggered

Commentary:

The S&P 500 closed out last week’s trading still above the 50-day MA. The last two pullbacks to the 50 were followed by a sharp reversal up….will this time be different?

The Nasdaq 100 closed at a big support level. The current selloff is a bit different than the last two, as the index has clearly broken the 50-day MA.

The Nasdaq 100 lost some leadership last week with $NVDA, $AMD, and $MSFT breaking the 50-day MA.  $AAPL broke its 20-day EMA and may be headed to the 50ma if it can’t reclaim the 20ema within the next day or two. 

With the S&P 500 and Nasdaq at support, it’s tough to initiate new swing trades on the short side without some sort of bounce. As mentioned last Friday, it’s more of a day trader’s market for shorting.

If the market does find support and reverses higher, then oil or financial stocks are likely the best bet. $OXY is looking pretty good with an entry over the two-day high following Friday’s tight trading range. This is not an official trade.

Unofficial Setups – For experienced traders only, no guidance is given for these setups.

• If the market rallies, then $OXY, $MUR, $APA, and $JPM could be in play.
• If the market breaks down, then $MU could be in play below Friday’s low for a quick short to the $92 area.

See you in the chat room,

Rick

For those new to this report, our share size is pretty conservative with max. size around 10% of equity per trade. We do this because we prefer to trade 10-12 names to keep the report active.  However, if your goal is to maximize returns, taking 18-25% positions is the way to go.   If trading in a non-margin account, this will limit the portfolio to 4-5 positions.  If on margin, then 8-10 positions. Our risk per trade on average is just over 1/2 of 1%. Experienced traders may want to risk 1% to 2% per trade.   For example, a 20% position in a 100k account with a 6% stop loss would result in a $1,200 loss (1.2%). 

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