The Wagner Daily – $XLE Stock: Holding 50-day MA & Showing Strength

The Wagner Daily – May 4, 2022

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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):

open positions:

closed positions:

position notes:

• No trades triggered.

Commentary:

Stocks failed to follow through on Monday’s bullish reversal action ahead of Wednesday’s Fed meeting. There is still no buy signal in the S&P 500 or Nasdaq with both averages now on day 3 of a new rally attempt. Day 4 is the earliest we could see a follow-through day, which would be Thursday.

The S&P and Nasdaq futures have been trading in a very tight range on the hourly chart following Monday’s reversal, so whatever happens post-Fed should drive the market in the short term.

If the S&P 500 pushes higher, there is resistance from the 20ema around 4300 and 50ma around 4380.

The Nasdaq Composite has resistance from the 20ema just above 13,000 (r1) and the 50ma above 13,400 (r2).

Last week, $XLE closed below the 50-day MA and was in danger of potentially losing this average, which would have likely led to a deeper correction off the highs. $XLE may still be headed for more sideways action, but so far it’s holding the rising 50-day MA and remains leadership.  Note the bullish breakout in the relative strength line vs the S&P 500.  

There are no new official setups ahead of Wednesday’s Fed meeting. We would have no problem buying proper setups ahead of the Fed IF we were in a bull market.  Not something we want to do in a bear. 

Stocks that may be in play on strength over prior day’s high: $SPTN $CALM $PKG $DLTR $PING $GTLB $CEIX. Stocks in play on weakness: $CC $OLN $MOS $NTR

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

• Longs – see above
• Shorts – none

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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