The Wagner Daily – $S&P 500 Stocks: Ready to Rally?

The Wagner Daily – October 28, 2022

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MTG Market Timing Model –  BUY  (from 10/21/22 follow-through day 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 along with open and closed positions:

 

position notes:

• Stopped out of $SWAV.
• Per intraday alert, sold half of $SSO to lock in some gains.  Holding on to other half for a potential bigger move.

Commentary:

Nasdaq and S&P futures were hit hard in after-hours trading in reaction to $AMZN’s 20% selloff post-earnings. 

The initial plunge was ugly, but the futures have recovered off the lows of the session as of this writing.    

S&P 500 futures held the 20-day EMA and is now back above the 8-day EMA.   The S&P is in better shape overall as it’s still above the 20-day EMA and has yet to print a distribution day (higher volume selling day). 

The Nasdaq 100 futures lost support of the 20-day EMA which is a sell signal unless it can bounce back above within the next few days. The Nasdaq Composite has logged a distribution day (higher volume down day of -.20% or greater) which is generally a negative sign when it prints within a few days of a follow-through day buy signal.

Current rally thoughts –

• S&P 500 does not have a distribution day and is still above the 20-day EMA.
• The Nasdaq Composite has a distribution and has lost the 20-day EMA.
• Energy, materials, and other non-growthy areas are leading the current advance which isn’t ideal.
• $PI and $WING both printed big volume breakaway gap-ups in reaction to earnings, a positive sign for growth.
• The number of 52-week highs vs 52-week lows is still negative on the Nasdaq and NYSE exchanges – though positive in the more narrow indexes S&P 400 and S&P 500.

The mixed signals above point to keeping long exposure limited to 2-4 positions (or less than 40% long) as we wait for more bullish or bearish evidence to come in.

Depending on market conditions, $WING could be in play over the two-day high. This is not an official buy setup.

Just a reminder, there are a ton of stocks on our watchlists reporting earnings within the next two weeks. Be sure to check for earnings before establishing new positions.

• Longs – watching $GFS $ENPH $LNG $WING $PI
• Shorts – (none)

Rick 

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