The Wagner Daily – Nasdaq Composite: Signs of Weakness Ahead?

The Wagner Daily – August 03, 2022

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MTG Market Timing Model –  BUY   

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 along with open and closed positions:

position notes:

• No trades triggered
  

Commentary:

For the second day in a row, the Nasdaq Composite stalled above the prior day’s high and closed well off the highs of the session. Volume did pick up on Tuesday and combined with the poor close, one could argue it was a subtle distribution day.

If Tuesday’s low fails to hold, then expect more selling down to the 10-day EMA. Some short-term weakness would likely help produce lower-risk buy points.

The model portfolio was quiet on Tuesday with no triggered trades.

$PWR and $LNTH report earnings before the open on Thursday. We will likely hold $LNTH through the report as we have a decent profit buffer. Due to the lack of profit buffer in $PWR, we are going with a tight stop below our entry that would result in a near break-even loss if triggered.  If $PWR pushes higher, then we will make the call as to whether or not we hold through the report by 3:40 pm EST on Wednesday.

Excluding a few breakaway gaps, breakouts in stocks trading near 52-week highs have failed to impress thus far.  Because of this, it is best to buy on weakness around a 20 or 50-day moving average.  

Maybe breakouts will perform better once earnings are out of the way in the majority of leadership stocks we monitor.  

There are no new official setups for Wednesday.  

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

• Longs –  CEG over 2-day high, $CEIX
• Shorts –

See you in the chatroom,

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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