The Wagner Daily – May 31, 2022
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MTG Market Timing Model – BUY as of 5/26 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):
closed positions:
position notes:
- No trades triggered.
Last Friday’s close was more than 1% above the 21-day EMA on the S&P 500 and Nasdaq Composite, which is another buy signal in addition to last week’s follow-through day in the Nasdaq. We only use the 21-day ema on the S&P 500 and Nasdaq for our timing model. The 20-day ema is used for stock and ETF analysis.
There is quite a bit of overhead (resistance) on both charts below which could limit the upside, but as we know…anything can happen. No predictions here.
Last Friday’s official setup in $LTHM missed its trigger by a few cents. The reason why we went with a limit order slightly above the prior day’s close is that we were looking for a flat or slightly lower open. We thought about placing a buy stop above the prior day’s high, but the protective stop beneath the 2-day low would have been close to 12% (too wide).
With most stocks straight up the past few days, our weekly scans did not turn up many actionable buy setups.
We do have one new official entry in $GLNG over the high of last Thursday’s washout reversal candle.
$GLNG has formed a six-week-long and 22% deep base with a 99 relative strength rating from IBD. The industry group rank is 10 out of 197.
The stop is below Friday’s low, which is also below the 50-day MA.
There isn’t a lot out there in terms of high quality breakout setups, but we could see some 2-3 day pullback entries in energy later this week or early next week.
Below is quick guide of what we will be looking for this week:
- Can the Nasdaq Composite and S&P 500 hold the rising 20-day ema? A quick break below the 20-day EMA this week would be a negative sign.
- Avoid distribution days in the Nasdaq or S&P 500 (one may be ok, but two in one week would be a negative sign).
- How are recent breakouts working? Are they extending from the pivot or struggling?
- If recent breakouts pull back in, is the action constructive? Lower volume and not giving up much ground?
Unofficial Setups – For experienced traders only, no guidance is given for these setups.
- Longs – $SBLK (over Fri high), $MOS (over 2-day high, patience required here so size small), $VERU buy stop 13.20, $CEIX – buy stop 55.00
- 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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