The Wagner Daily – Model Portfolio 100% Cash

The Wagner Daily – May 13, 2021

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 – S&P 500 sell (just broke 20ema), Nasdaq Composite 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 Tuesday’s bullish close, leading to a sharp selloff in all broad market averages.  The S&P 500 is no longer on a buy signal after Tuesday’s break of the 20-day EMA and Wednesday’s confirmation.

After such a sharp selloff, if there is a bounce within the next few days, then look for the price to stall at resistance from the first touch of the declining 20-day EMA.

The Nasdaq has held the 20-week EMA on a closing basis since bottoming out in 2020. If the price is unable to recover above the 20-week EMA by Friday’s close, then that would be a change of character.

The same goes for the Russell 2000 ETF $IWM.

The model portfolio is 100% in cash.

There is very little reason to hold long positions right now as the reward-to-risk ratios are not favorable.  

$CLF is a good example of how difficult it has been to make progress. Even if one continues to hold, it’s tough to do so with size.

As for stocks that are holding up well, $CF is looking pretty good after breaking out last week. $HZO did the opposite, as it broke out to new highs last week and is now 23% off the high in three sessions.

$RBLX cleared its downtrend line on heavy volume Tuesday and found support at the trendline along with the 10 and 20-day EMAs. Impressive action in a weak market.

There are no new setups for Thursday. The short-term plan is to remain in cash through Friday and see what develops. Since the S&P 500 is still above the rising 50-day MA, it would only need to reclaim the 20-day EMA to be back on a buy signal. The Nasdaq Composite is well below a flat 50-day MA and a declining 20-day EMA, so we’d like to see a legit Follow-Through Day print to generate a buy signal.

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

• No setups
• watching – $FCX $TMST $CF $MOS $MDP $TS $COIN $RBLX

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