The Wagner Daily – Nasdaq, S&P Rebound with Volume

The Wagner Daily – August 4, 2021

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MTG Market Timing Model – buy mode (but cautious) 

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:

• Stopped out of half of $SNAP.
• Stopped out of the $NVDA add.

Commentary:

The $Nasdaq Composite and S&P 500 recovered from a weak morning session after finding support at/near the 20-day EMA. Both indices closed near the highs of the day with bullish reversal candles. Volume increased on both the NYSE and Nasdaq as well.

Semiconductors ($SMH), metal & mining ($XME), and homebuilders ($XHB) are a few of the top-performing groups in terms of percent gain since the $SPY reversed off the 50-day MA on 7/20.

$AMD is a beast and the top dog, though $NVDA at some point should resume its strong uptrend after a successful first touch of the 10-week MA.   There are a few semis that are still actionable such as $KLAC which is an official buy setup for Wednesday.  We like the big volume gap up through resistance at $330 and Tuesday’s tight-ranged session on lighter volume. We have a buy stop for partial size over Tuesday’s high. The add is over the two-day high, which if it clears, should lead to a move to new highs.

Steel stocks have moved off base lows with strong price and volume action ($NUE, $CLF, $X, $MT, $STLD are a few). Of the handful moving higher, we like $MT for a buy entry over Tuesday’s high after a short-term pause.  $MT is already at new highs after an impressive two-week run of heavier than average volume during the advance off the lows of the base. 

The protective stop is just below the 10-day EMA.

Although the timing model is on a buy signal, market conditions are not ideal for our style of trading which is focused on liquid growth stocks.  Growth stocks are holding up but haven’t led the market higher as they did in June.  Market averages continue to climb and there are pockets of strength to take advantage of, but overall, it’s not the type of market where we can load up on long exposure. Conditions can change quickly, so our analysis is always one day at a time.

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

• $SNAP – if 10ema on the daily holds, then look for price to regain 20ema on the hourly.
• $FRHC – buy at 64.10 (breakout from tight range at 10ema check for eps)
• $DOCU – in play if price opens at 295 or higher and holds (trading in the wick)
• $CRWD – same concept as $DOCU, if it opens at 244-255 or higher and holds it would be trading in the wick

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