The Wagner Daily – $ARKK ETF Update: Bullish Trend Ahead?

The Wagner Daily – May 13, 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:

Although stocks failed to rally higher all session long, there was enough bullish action out there to suggest the current selloff may give way to a short-term bounce.

Nasdaq 100 ETF $QQQ closed off the highs of the day, but the long upper wick suggests the bears may be losing control. A higher open on Friday, that holds above Thursday’s close could spark a short-term bounce.

The S&P 500 has the same look as $QQQ and possibly due for a bounce.

Growth ETF $ARKK had the best showing, with a gap down that reversed higher and just missed closing with a bullish engulfing candle. Look for $ARKK to push higher in the short-term as long as it doesn’t retrace too much of Thursday’s action.

Market leadership remains very thin, with most energy stocks running on fumes after a strong advance in the last 12-months.

Energy ETF $XLE is sitting just below 52-week highs but is not in play for us due to the volatility and multiple heavy volume down days within the base.

$MOS isn’t quite yet actionable for us but worth monitoring for bullish signs such as:

Given that the market remains in an ugly downtrend, we would view any bounce as a shorting opportunity until proven otherwise.

For us to entertain the long side, we’d have to see either a follow-through day on day 4 or later of a rally off the lows, or a major index reclaiming the 20-day EMA and holding. Until then, we are dealing with a short-term bounce in a bear market.

• Longs – just watching $CC $LLY $SJM $DG $DLTR $PPC
• Shorts – need a small bounce or few days of chop to produce new short setups

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.

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