The Wagner Daily – S&P 500 Reclaims 20-Day EMA

The Wagner Daily – May 17, 2021

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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:

The S&P 500 bounced back from a sharp selloff and reclaimed the 20-day EMA. If the S&P 500 closes above the 20-day EMA on Monday, then our timing model will shift back to buy mode.

In last Friday’s report, we discussed a possible change in character on the weekly chart of the Nasdaq Composite if the price did not hold the 20-week EMA on a closing basis. It did, so a positive sign.

The daily chart isn’t much to look at, just a chop fest below a sideways 50-day MA, but the consolidation is constructive.

With growth stocks still out of favor, our focus remains on leading industry groups.

Oil & Gas Exploration stocks are one of the strongest groups in the market and $XOP is the Oil and Gas ETF, which reclaimed the breakout pivot last Friday. Rather than chase the price action, we are looking for a slight pullback near last Thursday’s high as a buy entry. The stop is beneath last week’s low. This is a buy limit order, so it can only trigger on weakness.

This is an official trade setup.

$LUV is also an official trade setup after clearing the downtrend line and reclaiming the 50-day MA on volume. We have a buy limit order to enter on slight weakness, looking for the price to retrace a bit of last Friday’s range.

$CF is not an official setup but is potetnially in play over last Friday’s high. The current pullback has been orderly with the price chopping around on lighter volume. Watch out for a higher open on Monday that could lead to a false trigger on the open.

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

• $CF – buy at 55.01
• $SCCO – 77.80 (pullback to 20ema)
• $CSTM – buy at 17.30 (tight ranged inside day)
• $CMC – buy at 32.30
• $EOG – triggered buy entry last Friday over prior day’s high (could enter on slight weakness)
• $ASO – buy at 36.20

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