--> Financial ETF ($FAS) may lead the S&P 500 lower for a few days

Financial ETF ($FAS) may lead the S&P 500 lower for a few days


market timing model: BUY


Current signal generated on close of November 13.

Portfolio exposure can be anywhere from 25% to 50% long. If positions are holding up well, then one can add exposure beyond 50%.

Past signals:

    • Neutral signal generated on close of November 6.
    • Buy signal generated on close of September 9
    • 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

(click here for more details)


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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ETF position notes:

  • No trades were made.

stock position notes:

  • $TKMR buy setup triggered. Note the new prices in the watchlist section above.



ETF, stock, and broad market commentary:

Relative strength returned to the NASDAQ Composite and Russell 2000, as the S&P 500 and Dow Jones stalled out last week. The stalling in the S&P 500 suggests that it may need a short-term pullback or at the very least a few days of choppy action, which could lead to a test of the rising 10-day MA (normal pullback action).

Although financials reversed into the close along with the S&P 500, our position in the Direxion Financial Bull 3x ($FAS) from a Nov. 14 entry at 78.70 remains in good shape. Like the S&P 500, a short-term pullback should find support at the rising 10-day MA. The 20-day EMA is sitting at 85.76, which means that its already above the highs of the last base at 80.58. It’s a bullish sign whenever a major moving average climbs above our entry point in a trade, as there is more support to defend our entry, which in turn allows us to be more patient with the action.

Financials breakout $FAS

After multiple touches at the 40-week MA since last June, E-TRACS 2x Leveraged Long Alerian MLP Infrastructure Index ETN ($MLPL), has formed a bullish six month base. Note how the price action has tightened up nicely the past few weeks while holding the 10-week MA. The 10-week MA remained above the 40-week MA during the entire consolidation and is now trending higher.

MLPL DOWNTREND LINE BREAKOUT

A close above the downtrend line on the weekly chart above could spark a move to new all-time highs.

The monthly chart below clearly shows how the price action tightened up during November, as it is a very small bar (from high to low) when compared to the prior month.

MLPL monthly chart breakout

We have placed $MLPL on today’s watchlist. Trade details can be found in the watchlist section above.

On the stock side, we added one new position in $TKMR on Friday. Note that we have increased the share size on the $MDCO and $BLMN entries, as they are strong setups in A rated stocks.

We have a new setup on today’s watchlist in another A rated stock Facebook ($FB). $FB formed a bullish reversal candle last week after pulling back about 20% off the recent high.

Last week’s low could potentially be the bottom of the base that it is now forming. However, since the pattern has yet to produce a higher swing low, we do not feel comfortable taking on more than a quarter position above last week’s high. We plan to add to the position as new pivots emerge.

WEEKLY REVERSAL CANDLE $FB

 

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