The Wagner Daily – January 24, 2022
Below is the full, archived issue of The Wagner Daily swing trading report (sent to members the night before the publication date).
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MTG Market Timing Model – 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):
closed positions:
position notes:
- No trades triggered
All major indexes were split wide open last week in what has become a very dangerous environment for stocks.
The S&P 500 closed below its 200-day MA last Friday and if it’s unable to find support may be headed to the October low.
The Nasdaq Composite sliced through support at 14,200 last week and doesn’t have much support until 13,000. Maybe the price can reverse off a trendline drawn connecting swing lows on the daily chart below?
Growth ETF $IWP is nearing a target projected from the head and shoulders topping pattern that has played out. The first drop from the head to the low of the right shoulder was 11.5%. The break of the neckline should lead to another 11.5% drop near 96.50 at the very least. Maybe growth sees a bounce this week?
CBOE Volatility Index ($VIX) measures investor fear and can spike well above 40 during a correction. Looking at the daily chart of the $VIX below we have yet to see panic set in with the VIX near 30.
There are no new setups for Monday.
There is nothing to do right now on either side of the market. Most stocks are too extended from the 20-day EMA for low-risk short entries. As for longs, there are no stocks setting up right now with traditional buy patterns and we are not big fans of trying to catch a bottom in a stock that is melting lower.
Cash is king for now. There is no need to predict anything. Let’s just take it one day at a time and see what develops.
Unofficial Setups – For experienced traders only, no guidance is given for these setups.
- none
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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