market timing model:

Sell
– Signal generated on the close of April 18 (click here for more details)

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. Net P/L figures are based a $100,000 model portfolio. 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.

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closed positions:

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ETF position notes:

• $SMH add triggered above the 5-minute high at 35.70.

stock position notes:

• No trades were made.

ETF, stock, and broad market commentary:

Tuesday’s price and volume action combined for a solid all around session, with all major averages gaining 1.0% or more on higher volume. The pick up in volume was a positive sign for a market that has rallied off the lows on weak volume. The S&P 500 and Nasdaq have bounced up near the prior swing high after an ugly selloff, so we could potentially see the market consolidate for a day or two to digest recent gains.

Although the timing model is on sell signal, the price action in leadership stocks since 4/18 has been bullish. ETFs that led the market higher during the last rally such as $XLF and $ITB are no longer leading, but they are holding up. As long as we continue to see leadership rotate, then we have to believe that the market has more upside.

iShares Dow Jones US Home Construction ETF ($ITB) reclaimed its 50-day MA yesterday on higher volume. The swing low from February is holding up, and as long as $ITB continues to set higher swing lows within a base, then we have to view the price action as constructive.

The same goes for the SPDRs Financial ETF ($XLF), which has held the 50-day MA the past few weeks and could potentially run to new highs on the year this week.

The bond market, which ripped higher in April may have topped out in the short to intermediate term after forming a bearish reversal candle yesterday. The daily chart of $TLT looks extended after stalling out just above the 200-day MA the past two weeks. We could potentially see money rotate out of $TLT and back in to equities sooner than later if the market continues to act well.

Semiconductor ETF ($SMH) reclaimed its 50-day moving average on heavy volume yesterday. The buy stop to add 100 shares to our existing position triggered above the 5-minute high at 35.70. We now have 350 shares total. $EIDO followed through to the upside yesterday, with a solid gain of 0.7% on decent volume. $UNG closed below the 10-day MA, but volume was light. We’d like $UNG to hold the 10-day MA, but a pullback to the 20-day EMA would simply suggest that the action may need another week or two of consolidation before heading higher.

On the stock side, we have a few new setups on today’s watchlist. Because we list setups and plan out the entire trading day in advance, we must list several setups because we never know exactly which one will trigger.

$BLOX is a recent IPO from 2012 with monster short interest and improving fundamentals. 83% of $BLOX’s float is currently short. If $BLOX breaks out above $23, then most short sellers will be forced to cover, which will add fuel to the fire on the breakout.

We like the tight ranged consolidation over the past two months. Also, note the drop off in volume during the consolidation, which is bullish.

$AMBA is a stock we have been monitoring for a few weeks that has yet to trigger. After finding support on the daily chart at the 50-day MA, the price action looks to be turning the corner on the hourly chart below:

$AMBA is attempting to set a higher low above 12.50 after breaking above the hourly downtrend line. Our entry is just above the afternoon high and both the 20 and 50-period MAs. We are only taking about a 1/3 position off the lows. If triggered, we expect $AMBA to run into a bit of overhead at the 20-day EMA around 14.00, but we are prepared to be patient and will only add if the price action sets a higher swing low on the daily chart.

$TRLA is also on today’s watchlist (we do not have a chart for $TRLA). We are looking for an entry above yesterday’s high for partial size. We will add to the position if it can breakout above the range high. Volume should pick up consideribly on the breakout to confirm the move.

relative strength combo watchlist:

Our Relative Strength Combo Watchlist makes it easy for subscribers to import data into their own scanning software, such as Tradestation, Interactive Brokers, and TC2000. This list is comprised of the strongest stocks (technically and fundamentally) in the market over the past six to 12 months. The scan is updated every Sunday, and this week’s RS Combo Watchlist can be downloaded by logging in to the Members Area of our web site.