market timing model: (Confirmed) Buy
Current signal generated on close of September 9.
We are now in confirmed buy mode, so portfolio exposure can be more than 100% if you have a marginable account. However, please make sure that current long positions in your portfolio are working before adding new ones. Portfolio exposure should be at least 75% to 100% (or more) right now.
Past signals:
- Neutral signal generated on close of August 15
- Buy signal generated on close of July 11
- Neutral signal generated on close of July 5
- Sell signal generated on close of June 24
today’s watchlist (potential trade entries):
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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. Click here to learn the best way to calculate your share size.
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closed positions:
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ETF position notes:
- We are buying $AGQ at market on the open. Hopefully, we get some sort of gap down on the open. If the price action gaps higher, any open above 25.11 will kill the setup. Any open at or below 25.11 is fine.
stock position notes:
- Sold $SSNC on open for an 8% gain.
ETF, stock, and broad market commentary:
In yesterday’s report we mentioned that it is not the news that matters to us, so much as how our stocks/ETFs (and other leading stocks) respond to the news. The market responded favorably to the Fed’s decision to stick with its current bond buying strategy, with all averages closing up at least 1% on the day. Turnover increased on both exchanges, as the S&P 500 and Dow Jones recorded a new closing high for the year. It is quite the recovery for the relatively weak Dow, which has now rallied more than 800 points off the lows of August.
Current long positions in ETFs $USO and $TAN rallied at least 2.5% higher on increased volume. $IEO and $FCG also added to recent breakout gains. Last night’s breakout buy setup in $XBI triggered, and we are now long. We look for the price action to follow through to the upside with a close above $131 within the next few days.
iShares Silver ETF ($SLV) printed a bullish reversal candle on heavy volume after undercutting the 50-day moving average on the open:
The pullback in $SLV off the highs of August retraced about 61.8% of the last wave up (from 8/7 to 8/27). We are placing $SLV on today’s watchlist, as we look for the price action to follow through to the upside over the next few weeks, after bouncing off support of the 50-day MA on heavy volume. Please note that we are buying the leveraged silver ETF ($AGQ), but we prefer to do our chart analysis in $SLV.
Looking at the weekly chart below, we are anticipating a move to the declining 40-week MA as a target. Since $SLV is a shorter-term reversal trade, we are not looking for a multi-wave advance, as there is simply too much overhead resistance in the $25 – 26$ area.
United States Oil Fund ($USO) undercut its 10-week MA on Tuesday, but bounced back nicely on Wednesday, closing back above the 10-week MA on a pick up in volume. If the price action holds up through the end of the week, then $USO will print a bullish reversal candle on the weekly chart. A move above the high of that candle next week may spark the next wave of buying that leads to new highs.
On the stock side, our buy setup in $BDBD triggered on a pick up in volume. The $SCTY buy limit remains live and we also added a few new setups in $NDLS, $XOOM, and $ALR. We are also adding to our position in $BDBD over yesterday’s high. Note that there are two entry points in $XOOM.
$NDLS, which is a recent IPO, has been trading in a tight range above the 20-day EMA since breaking above the first downtrend line drawn on the chart below. Note that the 50-day MA has just popped up the past few days, which should provide a little more support. The buy entry is over the two-day high, with a pretty tight stop beneath the swing low. Look for $NDLS to break out to new highs within the next few weeks. The only setup on today’s watchlist that we would consider for a longer hold is $SCTY. The other stocks will be traded for a quick pop, taking gains in the 10-20% range.
