The Wagner Daily – S&P 500: Heading to 4,300?

The Wagner Daily – April 13, 2022

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MTG Market Timing Model –  Sell due to both the S&P 500 and Nadsaq Comp below the 20 and 50-day MAs

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):

Add
open positions:

closed positions:

position notes:

• No trades triggered.

Commentary:

Stocks remain in a downtrend led by weakness in large-cap tech.

The Nasdaq Composite closed near support around 13,300. 

The S&P 500 also closed below the 50-day MA for the second day in a row and unless it can bounce back within the next day or two may be headed to the 4,300 area.

 The S&P 500 joined the Nasdaq Composite below the 50-day MA this week which puts the timing model back in sell mode.  For the model to return to buy mode either the S&P or Nasdaq must close back above the 20-day EMA.  Note that all our buy/sell decisions are not based on the timing model as we need to have a bit more freedom to adjust to market conditions, especially when the price action is volatile.  

There isn’t much to do right now as the broad-based averages are too extended to the downside to add new short exposure. Long setups have also dried up, which isn’t a surprise with major indexes in a downtrend the past two weeks.

The only longs that are in play continue to be commodity-based, but timing is crucial on these trades as entries tend to work better on weakness than strength.

$TECK is a coal, copper, zinc, and gold miner that is trading near highs with a 97 RS rating from IBD. A recent false breakout led to a shakeout below the 20-day EMA and recovery back above. Commodity-based trades should be entered on weakness which makes $TECK in play near the 20-day EMA with a stop below the swing low. This is not an official setup as we already have a few open positions in coal and gold miners.

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

• Longs – $TECH – buy near 20ema, stop swing low. Other stocks in play over yest. high – $NOC $LXU $BPT
• Shorts –

See you in the chat room,

Rick 

This list is a good starting point for monitoring the health of the market for those who have limited time.

https://morpheustrading.com/services/swing-trade-alerts

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