The Wagner Daily – Using $VXX for Correction Trades

The Wagner Daily – September 30, 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:

• No trades triggered.

Commentary:

The Nasdaq Composite closed near the lows of the day and beneath Tuesday’s low, suggesting further weakness. While the S&P 500 held Tuesday’s low, the declining 20ema on the 60-minute chart is resistance just above.

Growth is taking a beating and will likely need several weeks of chop to form new basing patterns.

Energy stocks are showing relative strength over the past two weeks with $XLE pushing through resistance at $50 and extending higher in a weak market.

Most energy stocks are extended in the short term but could be in play on a pullback.

$OAS is an energy stock that is potentially in play on Thursday after a false breakout above the handle high. The price pulled back into the breakout pivot (handle high) and held. A buy stop can be placed above Wednesday’s inside day high. This is not an official setup.

Watching $VXX on an hourly chart can be helpful during a correction. After a sharp spike up in $VXX during a market selloff, look for the volatility to settle down followed by a break down below the 20-period EMA. The break of the 20ema can serve as a buy signal to enter stocks/test positions. Currently, $VXX is sitting on top of a rising 20-period EMA (suggesting higher prices), so the S&P is vulnerable to further selling.

The model portfolio is 100% in cash and waiting for a follow-through type day to get long. There are no new official setups for Wednesday.

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

• No new setups

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