Bull Flag Pattern Forming On S&P 500 SPDR ($SPY) Weekly

market timing model:

BUY Signal generated on close of July 7

Bull market rally. Long exposure can be in the 50 – 100% range or more depending on success of open positions.

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:

  • $HBP buy entry triggered.


Stocks closed moderately lower across the board but well off the lows of the session, which was a positive sign.

Although the S&P 500 ETF ($SPY) has stalled at $219 the past few weeks, it has refused to close below $217 on two attempts in the past four sessions. The $SPY’s resilience has allowed the 10-week moving average to catch up to the price action, which increases the odds that the current correction will remain one that is more by time than price.


We like what we are seeing right now out of the market. It has been a chop fest, but overall, it is hard to complain about a market that is digesting a big advance with a shallow correction by time.

There are two new buy setups on today’s watchlist. The first is an add to an existing position in $BABA. The other is a starter position in $PYPL off the 40-week moving average.

$BABA cleared the short-term downtrend line and closed back above the 10-day MA on a strong pick up in volume. The price action is now above the 5-day MA as well, which has turned up and should act as support on any short-term pullback, along with the 10-day MA.

We are placing a buy limit order above Wednesday’s high to guard against a gap up. If the price opens lower than the limit, then it should trigger as a market order on the open. The stop is a close below the 10-day MA, which should not happen if the uptrend is to resume right away. If there is a break of the 10-day MA, then a test of the rising 20-day EMA is likely.


$PYPL has pulled back to and undercut the 40-week MA (like the 200-day MA on daily), potentially setting a higher low. We are placing a buy limit order to enter near Wednesday’s close looking for the price to hold above $36. Ideally, we’d like to see the price chop around for a bit and then attack the downtrend line on a pick up in volume.

This is not a “go now” entry like $BABA, so it will take some time for the trade to play out, which is why we are only going with a 5% position and $100 risk ($100 less than average $200 risk in 50k account).


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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