market timing model:

Neutral
– Signal generated on the close of April 24 (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:

• No setups triggered. Note the changes to the share size and trigger price in the $DZZ buy setup.

stock position notes:

• $AMBA add triggered. We cancelled the $NEO buy setup for now.

ETF, stock, and broad market commentary:

The broad market averages printed a solid day of gains across the board, led by the Nasdaq Composite, which set a new closing high for the year. Although volume did not confirm the move, there certainly is enough bullish momentum in leading stocks to suggest that the current rally off the lows is for real.

Rotation has been the key to this year’s resilient rally. Whenever a leading group has cooled off a new group has emerged. In early 2013, financials, construction, and energy stocks pushed the S&P 500 higher. Over the past few weeks we have seen money flow into the Nasdaq, with semiconductor stocks leading the way by breaking out to new highs ahead of the Nasdaq.

Another key to the rally has been the constructive price action of leading groups after selling off from an extended run. Transports and financials made big runs during the first quarter, but have since been in consolidation mode, forming bullish basing patterns.

iShares Dow Jones Transportation Average ($IYT) has formed a bullish base on the weekly chart, holding support of the rising 10-week moving average (in teal).

Note the big breakout from a 40 month long consolidation in the Financial Select Sector SPDR ($XLF):

The weekly chart once again shows the tight sideways price action above a rising 10-week moving average at $18.

Natural Gas ETF ($UNG) has recovered nicely after a bullish shakeout below the 20-day EMA and a prior swing low.

A shakeout is usually a bullish sign if the price action can return back above the broken support level within a few days. For $UNG it was just a one day “undercut”, followed by a move back above the reversal candle high the following session. The low of last Friday’s reversal candle also held support of the original breakout level, which was just above $22, so the move off the swing high was a simple pullback to the breakout pivot.

The Deutsche Bank AG DB Gold Double Short ETN ($DZZ) remains a potential pullback buy setup for us. Note the new trigger price and share size in the watchlist section above. The new entry price is just above yesterday’s inside day, which held support of the 20-day EMA. If $DZZ can break the short-term downtrend line it should attract some buying interest.

We added 100 shares to an existing position in $AMBA, which pushed higher on heavier than average volume. $BLOX finally broke out from ia tight ranged consolidation on heavier than average volume as well.

$PRKR is a new setup on today’s watchlist that is scheduled to report earnings on May 14th. We are looking for a quick pop, hoping to catch a 20-30% move in 2-3 weeks. The weekly chart below shows the big volume breakout, followed by a very tight consolidation. A break of the short-term downtrend line should lead to new highs within a few days if all goes well.

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.