The Wagner Daily – Bull Market: S&P 500 & Nasdaq FTD +2%

The Wagner Daily – May 18, 2022

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MTG Market Timing Model –  BUY as of 3/16 close

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:

• Canceled the $SQQQ buy setup.

Commentary:

Day four of a new rally attempt produced follow-through day (FTD) action in the S&P 500 and Nasdaq Composite with both indexes  up more than +2% on higher volume.

The Nasdaq Composite reclaimed the 8-day EMA and may be headed for the 20-day EMA or 50-day MA.

The FTD is a mechanical buy signal that should be confirmed by bullish price and volume action in stocks trading near 52-week highs. Tuesday’s buy signal is a weak one (so far) given the lack of stocks showing strength near highs.

There is one new official setup for Wednesday’s session in $AFRM.

$AFRM gapped up from a huge reversal candle last week on heavy volume and has since chopped around in a tight range above the rising 8-day EMA. A move through the two-day high is our buy stop with a target of the 50-day MA.

$STZ closed above the downtrend line on a pick-up and in volume and is in play unofficially over Tuesday’s high.

Just a heads up that we canceled the $SQQQ buy stop. We may revisit the short side down the road.

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 -$LSPD $CPNG (oof lows) ET- entry over prior day’s high
• Shorts –

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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