The Wagner Daily – Ugly Start: S&P and Nasdaq Distribution

The Wagner Daily – November 23, 2021

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quick jump to:today’s watchlistopen & closed positionsmarket commentary

resources:subscriber guideour trading strategyblog

handy links:

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MTG Market Timing Model – BUY  

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, sold $AMD to lock in a +25% gain.
• $ZI stops triggered for a scratch gain.
• Per intraday alert, sold half of $ON for a 6% gain and raised the stop on the second half.

Commentary:

Stocks kicked off a holiday-shortened week of trading with ugly distribution days in the Nasdaq Composite and S&P 500. The Nasdaq Composite dropped -1.3% on volume and closed with a wide-ranged, bearish reversal candle after a failed gap up to highs. Although the S&P 500 only gave back -0.3%, it closed -1.2% off the highs of the day after a failed breakout attempt.

The S&P 500 and Nasdaq Composite are still in trend mode above the rising 20-day EMA.  Midcap growth ETF $IWP is no longer in trend mode as it sliced through the 20-day EMA.

Russell Midcap Growth $IWP

In last night’s report, we mentioned “there was some disappointing action in leadership last week, but the good still outweighs the bad and our timing model remains on a buy signal.” The timing model is still on a buy signal, but in the short term, Monday’s selling forced us to raise some cash and tighten up stops.  Whether we are short-term cautious for a few hours or a few days, will depend on how stocks react to Monday’s selling.   

There are no new setups for Tuesday. Note that the $NEWR buy stop has been canceled.

We sold all of $AMD, half of $ON, and raised the stop on the remaining half to lock in gains. $ZI stops triggered for a scratch gain. Recent breakouts in $ZI and $S were disappointing due to the weak follow-through.

We now have four open positions in the model portfolio: $NVDA, $RBLX, $ENPH, and $ON. By selling $AMD and $ON, we reduced exposure to semis to help us sit through a pullback in $NVDA. Note that we tightened up the stop on half the $NVDA add due to Monday’s ugly reversal.

We are trying to give $NVDA, $RBLX, and $ENPH enough room due to the explosive follow-through from our buy points. For those who do not wish to hold through a potential pullback, selling all or partial size near Monday’s close may be best. Really depends on how one prefers to trade.

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

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