$BABA Still Showing Relative Strength As Stocks Rebound

market timing model: SELL Signal generated on close of Sept. 9

Last Friday’s breakdown generated a sell signal. One can still be long stocks that are holding up well.

Note that the market timing model was not created to catch tops and bottoms in the S&P 500. The model was designed to keep our trades in line with the prevailing market trend. Buy signals (confirmed) are generated when the price and volume action of leading stocks and the major averages are in harmony. This means that we could potentially have a buy signal in a major market average, but if leading stocks are not forming bullish patterns, then we are forced to remain on the sidelines until patterns improve.

today’s watchlist (potential trade entries):

$todays watchlist
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open positions:

Below is an overview of all open positions, as well as a report on all positions that were closed only since the previous day’s newsletter. Changes to open positions since the previous report are listed in pink shaded cells below. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits.

$todays watchlist
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closed positions:

open position summary
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position notes:

  • Sold or stopped out of $OLLI $STS $RSYS $HBP


Broad market indices staged an impressive comeback on Monday, with the Nasdaq 100 forming a bullish engulfing candle and reclaiming the 50-day MA.

The S&P 500 failed to reclaim the 50-day MA, but did close well above the mid-point of last Friday’s ugly candle, which is usually a bullish sign.

The Russell 2000 held the 50-day MA after dipping below on the open.

Although volume was lighter than last Friday, we definitely liked Monday’s rally as it shows buyers were willing to step in on weakness. Volume may have been light, but was still well above average.

Our internal watchlist looks pretty good, which is a positive sign. How the watchlist looks by the end of the week should provide us with more clues about current market conditions.

In terms of what is holding up….just a few from the list are: $TEAM $SIMO $GIMO $CCMP $PRAH $PYPL

$TEAM Weekly
$GIMO Weekly

$BABA recovered from a morning gap down to the 20-day EMA and closed back above the 10-day MA. The 20-day EMA has provided support during the rally, so our plan is to remain long the full position as long as $BABA stays above the 20ema. A close below the 20-day EMA would force us to sell the recent 5% add at $97, but keep the earlier entries.

$TEAM daily

Note that we lowered the stop in $PYPL and that it is no longer a hard stop. The idea is to give the trade some breathing room and see if it can continue to form higher lows and eventually punch through $40.

Let’s see how the market responds over the next day or two before we attempt to initiate new positions.

Self-Serve Watchlist:

This is an unofficial watchlist of potential setups for today’s session (trade results will not be monitored). This list is for experienced traders only who are looking for a few ideas. No targets will be listed. Please check for earnings before entering.

All stops are on a closing basis unless listed as a “hard” stop.

$self serve

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