The Wagner Daily – Bearish Outlook for $QQQ

The Wagner Daily – October 11, 2021

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MTG Market Timing Model – sell (waiting for a buy signal)  

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:

• Per intraday alert, bought $UPST.

Commentary:

After a short-terme bounce, major indices appear to be headed lower after stalling at resistance from the declining 20-day EMA on the daily charts.

The S&P 500 rallied about +0.7% above the 20-day EMA on Thursday before reversing and closing well off the highs of the session. Friday’s action produced an inside day with a close just below the 20-day EMA. A break of the two-day low would increase the odds for further downside and a test of the recent swing low.

Nasdaq 100 ETF $QQQ was showed relative weakness to the S&P 500,  as the price failed to push much above 20-day EMA before reversing. The following session closed below the prior day’s low and the 10-day EMA.

We like $QQQ as a short entry on a break of Friday’s low, with a target of the recent swing low. Rather than short $QQQ, we are buying the 3x inverted $SQQQ with a buy stop limit order. See the watchlist above for trade details.

Midcap Growth ETF $IWP also stalled at the 20-day EMA and closed below the 10-day EMA. Other growth-based ETFs $FFTY and $ARKK also look vulnerable to further selling in the short term.

$DOCN did not close well last Friday after stalling near the prior high and selling off. Note the new stop just below breakeven. We’d rather stop out with a very small loss and wait for a lower-risk entry to develop.

The timing model remains on a sell singal heading into day 5 of a new rally attempt in the major indices.

Below are a few stocks we are watching. No etries yet, just watching for now.

Still watching $FRM $CFLT $DOCN $TASK $MNDY $LC $NFLX $PAG $MVRL  

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

• none

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