The Wagner Daily – Market Sell Signal: Defense Mode

The Wagner Daily – November 29, 2021

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MTG Market Timing Model – SELL (due to close below 20-day EMA on Nasdaq Comp.  

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:

• Added to $NVDA on a pullback.
• $PSTG buy limit order triggered.
• Per intraday alert, sold 1/2 of $PSTG.

Commentary:

Last Friday’s close below the 20-day EMA in the Nasdaq Composite and the S&P 500 triggered a sell signal in our market timing model. With the model on a sell, we believe it’s best to play defense and tighten up stops to protect gains / minimize losses as the odds have increased for further weakness.

The break of the 20-day EMA suggests further weakness but anything can happen. We are still leaning towards a fairly short-term pullback followed by higher prices in December, but that isn’t a prediction as we know anything can happen.

Our weekend scans did not produce actionable buy setups in stocks with traditional basing patterns such as cup with handles, flat bases, and double bottoms.  This shouldn’t come as much of a surprise, as the market was a bit extended prior to last week’s selloff with many leading stocks pulling back in after a strong run.

Here is a small list of stocks we are monitoring for an entry should conditions improve:

• $LCID $U $RBLX $MTTR $ENPH $TSLA $NVDA $AMD $GXO $ON $ONON $SLAB $PUBM $TTD

There are no buy setups on Monday’s watchlist. Buy limit orders in $PSTG and $NVDA triggered last Friday. Because of the ugly action in the averages, we sold 1/2 of $PSTG (per intraday alert) near breakeven and have a very tight stop for the remaining 1/4 position.  

When conditions quickly turn sour, it’s best to kill losing or marginal trades first and then decide how to handle winners.  

We are going with fairly tight stops in all open positions, as we can always re-enter if/when conditions improve. For those who would like to be a bit more patient with $ENPH or $NVDA, consider selling partial size at the stops listed above and cut the rest on a close more than 3% below the 20-day EMA on the daily chart.

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

• none

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