The Wagner Daily -Market Support: Nasdaq & S&P 500 at 20-day EMA

The Wagner Daily – June 2, 2022

Below is the full, archived issue of The Wagner Daily swing trading report (sent to members the night before the publication date).

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MTG Market Timing Model –  BUY (SP-500 and Nasdaq above 20ema on daily)  

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:

Both the Nasdaq Composite and S&P 500 found support at the 20-day EMA, which is the line in the sand for the current rally/bounce.

The daily chart of the Nasdaq Composite has more breathing room before hitting major resistance in the 12,600 – 12,800 area. The 50-day MA and 50% fibo retracement level from the last wave down line up around 12,800.

The S&P 500 has less room to operate with, with resistance clustered just above 4,200.

The biggest problem with the current rally remains the lack of leadership. Energy continues to lead, but the charts within that group are extended in the short term.

Shipping stocks are trading near 52-week highs and could be in play this week ($EGLE and $GNK).

$GNK is an official buy setup over the high of Wednesday’s inside day. If triggered, the price would be back above the prior swing high at 26.00. Our target is a 10-15% move, looking to sell into strength.

As you can see from the lack of setups in the report, the current rally is lacking in power and may not have much more upside.  This is not a prediction, as we are just calling it as we see it… one day at a time. 

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 – $ARCH – above yest. high
• Shorts – $ZI $DDOG (below yest. 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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