The Wagner Daily – S&P 500: Testing Key Support at 50-MA

The Wagner Daily – July 20, 2021

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MTG Market Timing Model – sell (both S&P 500 and Nasdaq Comp below 20ema) 

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:

 The S&P 500 sold off sharply on Monday and at one point was trading  2% llower before bouncing off the 50-day MA. Let’s see if the S&P 500 can hold the 50-day MA and find a bottom this week.

The Nasdaq Composite closed -1% lower but much of the loss was due to the morning gap down as the price just chopped around the rest of the day. Odds favor further selling at some point this week, whether that is on Tuesday or after a one-day bounce we do not know.

 Midcap Growth ETF $IWP bounced off the 50-day MA from a gap down. Ideally, we’d like to see the price action hold up around the 50-day MA this week and during the next few weeks, minus a shakeout bar or two.

Several growth stocks held up well on Monday closing with bullish reversal candles above or near the 20-day EMA ($ASAN, $GNRC, $DOCU, $CRWD, $NET, $ZS, $PYPL, $SHOP, and $NVDA-off 10-week MA).

$NET’s bullish outside day after undercutting the 2-day low and 20-day EMA is a buy signal. Monday’s high could serve as the entry with a stop just beneath the 20-day EMA.

$CRWD also undercut the 2-day low but failed to close back above the 20-day EMA. A move through Monday’s high could serve as an entry for aggressive traders looking for immediate follow-through.

For most traders, it’s a bit too soon to put money to work in this market. For very aggressive traders, $NET and $CRWD are two possible unofficial setups that could be in play.

There are no new official setups for Tuesday. Let’s see how the indices and leading stocks respond to Monday’s volatility.

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

• $NET – buy at 107.00
• $CRWD – buy at 252.51

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