The Wagner Daily – $QQQ: Trading Opportunity on Market Rally

The Wagner Daily – May 17, 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:

Day three of a new rally attempt in the market produced a tight-ranged inside day in $QQQ on lighter volume. There was also a close in the lower half of the day’s range. This two day bounce off the lows creates a shorting opportunity for us beneath Monday’s low with a protective stop over the two-day high.

If $QQQ pushes higher from here and takes out the two-day high, then that could lead to another test of the 20-day EMA, which has provided resistance during the selloff.

Rather than short $QQQ, we are buying the inverted ETF $SQQQ if the setup triggers. 

As mentioned above, if our $QQQ setup does not trigger, then we will wait for a short setup to develop at/near the 20-day EMA.

We will remain with a bearish bias until a major index can reclaim the 20-day EMA and hold.

For those who are new to the service, our system is based on trading growth stocks that can explode higher in a short period of time…when conditions are ideal. For most of 2022, conditions have not been ideal, so we have been playing the short side when setups are there while waiting for a new buy signal. Below are a few things we are looking for in a buy signal.

Keys to market turning bullish:

• Buy signal in the timing model, such as a FTD (follow through day) or reclaim of 21-day EMA
• Stocks begin to breakout on volume and hold… indexes hold the 21-day EMA
• Number of stocks making new 52-week highs vs 52-week lows enters into positive territory
• After first wave of breakouts, new setups emerge

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

• Longs – none
• Shorts – $LYFT $SNAP $SHOP $CPRI (short entries below Monday’s low)

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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