The Wagner Daily – Indices Signal Lower Prices Ahead

The Wagner Daily – September 29, 2021

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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:

• Sold all open positions.

Commentary:

All major indices we follow sliced through the 50-day MA on higher volume, increasing the odds of more sideways to lower price action during the next few weeks.

The good news is that most indices are already in week four of a correction which we need to reset patterns.

The weekly chart of the S&P 500 is at the 20-week EMA and may need to undercut last week’s low to produce a bottom. This is a guess, as it could dip all the way down to the 40-week MA or more (we never really know where/when a market will bottom out).

The Nasdaq Composite is also in week four of a new base.

Like the two charts above, $IWP is also in week four and is close to support from the highs of the last base around $112.

A few weeks of sideways to lower action would be ideal to allow for new basing patterns and new leadership.  

We sold our only open position, a half position in $SNAP just before the market closed. We stopped out of all other positions earlier in the day. We are now 100% in cash and waiting for new setups to emerge. It’s a bit too late to short right now, but the short side could be in play on the next bounce.

Per intraday alert, we stopped out $AFRM just below the 10-day EMA. Although we had a decent entry, we did not have enough of a profit buffer to sit through a pullback when the major indices are taking a beating below the 50-day MA. In this tape, it’s best to exit losers and take profits.

Note that $DDOG closed below the 20-day EMA for the first time since May (change in character). We are out with a small gain. For those still long, a break of Tuesday’s low would trigger and sell signal and confirm the break of the 20-day EMA.

For those still long a half position in $SNAP, a stop can be placed beneath Tuesday’s low or stick with the original stop at 72.39.

The model portfolio is 100% in cash and waiting for a follow-through type day to get long.

There are no new official or unofficial setups for Wednesday.

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

• No new setups

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