The Wagner Daily – $ARKK ETF: Breaking Trendline

The Wagner Daily – October 11, 2022

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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 along with open and closed positions:

 

position notes:

• No new setups.

Commentary:

Market conditions continue to erode with the Nasdaq Composite setting a new 52-week low and ending the recent rally attempt that stalled at the 20-day EMA last week.  The new low resets the rally count back to zero.  Remember we look for a follow-through day buy signal (1.5% gain on higher volume in an index) on day 4 or later of a new rally attempt.  

The S&P 500 is still above last week’s low but closed below the major swing low from June.  It may see another leg down if it begins to live below this level.

The small-cap Russell 2000 is the only index we follow that has yet to set a new low on the year during the last few weeks.  Just noting its relative strength here but there isn’t anything worth buying right now.  

$ARKK ETF broke its uptrend line and may be headed for another leg lower.

We always keep an updated watchlist on stocks showing relative strength because we never know when the market will bottom out.  

While these stocks are fantastic to watch for buy opportunities IF conditions improve, they may also serve as short setups if they finally succumb to the market’s broad-based selling and break through the 20 or 50-day moving averages.

$ALB and $WOLF are two examples of stocks that could be in play on the short side for a daytrade or very short-term 2-3 day hold.  

These setups are not official trades.

A break of the 50ma could spark a sharp sellof. 

There are no new official setups for Tuesday.  We remain in cash waiting for some sort of bounce in the market to produce more reliable short setups. 

 Unofficial Setups –

• Longs – none
• Shorts – $ALB $FSLR $WOLF

See you in the chat room,

Rick 

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