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MTG Market Timing Model – Buy mode from 10/21/22 signal date, but S&P 500 below 20-day ema which is a potential sell 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:
Commentary:
For the second day in a row, stocks sold off on a pick-up in volume.
The S&P 500 lost the 20-day EMA with back-to-back days of distribution (higher volume selling). Any bounce in the S&P will have quite a bit of resistance to work through, which increases the odds of a touch of the 50-day MA.
In yesterday’s report we mentioned the following, “Given the lack of follow-through in the market, we are playing a bit more defense today. Note the new stops above.”
Tuesday’s selling followed through on Monday’s weakness and forced the model portfolio back into a 100% cash position.
There are a handful of stocks out there still holding up such as $PODD, $DXCM, or $TMDX, but even these stocks aren’t making much progress after a few weeks of higher prices in the main averages.
While we have seen decent buy setups emerge as of late, there is almost no follow-through after the initial thrust-up, which makes for ugly reward-to-risk ratios. It’s tough to set a stop 3% to 7% from the entry when stocks are moving just 3-7% higher before reversing lower.
Oil stocks have offered the best reward-to-risk ratios this year as they have been able to buck the trend of the market, but this sector is in distribution mode now.
There are no new official setups for Wednesday. We will send an intraday alert if any action is taken.
$SMCI is tops on our watchlist, but we are waiting for a 2-3 week pause that holds up around the 20-day EMA.
Unofficial Watchlist
Rick
Click here to view this week’s watchlist in google sheets
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