The Wagner Daily – Energy Sector Struggles

The Wagner Daily – June 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:

US markets will be closed on Monday, June 20. Our next report is for Tuesday (6/21) and will be sent out by 5pm EST on Monday.

Have a Happy and Safe Holiday Weekend!

Thursday’s ugly gap down erased the prior day’s gains and set a lower low on the daily charts of $SPY and $QQQ, which confirmed Wednesday’s high as a lower high. These charts are likely headed for another leg down.

Energy leadership has been under distribution all week long with $XLE slicing through the 20 and 50-day moving averages on heavier than average volume.  This bear is beginning to show no mercy with leadership thinning out.    

We were monitoring a handful of stocks for short-entries closer to the 20-day EMA, but that plan went out the window with Thursday’s selling which turned the rally attempt into a one-day bounce.

For those seeking short exposure, stocks breaking down below a trading range of at least 3-4 weeks long are in play. Protective stops on these setups should be no more than 3% from the entry.  

$TSLA and $NVDA are a few examples of potential range breaks.

A short entry closer to the 20-day EMA would have been ideal for $TSLA, but Thursday’s reversal closed near the lows of the range. Note that the 50-day MA crossed below the 200-day MA two weeks ago, a bearish intermediate-term sell signal.

$NVDA is also in play on the short side beneath this week’s low after a failed breakdown attempt on Tuesday.

The setups above are not official.

Just a reminder that Friday is quadruple options expiration, which can make for a volatile session.

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

• Longs –
• Shorts – $TSLA $NVDA $AMZN below range lows, $MSTR $TWTR $GME – 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.

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