market timing model:

Buy Mode
– Timing model generated buy signal on close of March 5 (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 on two separate $50,000 model portfolios (one for ETFs and one for stocks). 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 trades were made.

stock position notes:

• No trades were made.

ETF, stock, and broad market commentary:

Stocks gapped higher on the open and chopped around in a tight range until the fed meeting, where volatility picked up late in the session. The major averages closed near the day’s open, with most of the gains resulting from the morning gap up. The S&P 500 gained a solid 0.7%, but volume was lighter. Over the past few days the price action in the market has been encouraging, as we continue to see buyers step in after a few hours of weakness.

Our long position in $XOP held support of the 10-day MA once again and could be poised to resume its uptrend with a move above 61.40. $XME rallied into resistance of the 20-EMA on the hourly chart, which is an important level to monitor when evaluating the health of a trade on the short side.

Note: The $ITB setup is a BUY LIMIT ORDER, which means we are looking to buy on weakness only if our trigger is hit at 24.45. This is not a buy stop order.

iShares Dow Jones U.S. Medical Devices Index ($IHI) broke out from a long term base of consolidation in early January and rallied about 7% higher before stalling out. Since then it has formed a tight, six week base near 52-week highs.

The weekly chart is in good shape with the 10-week MA pulling away from the 40-week MA. Notice how the rising 10-week MA has provided support on each pullback within the base.

On the daily chart, $IHI put in a false breakout to new highs on 3/6 (around point A) and once again on 3/12 and 3/13. The last failed breakout attempt led to a quick three day shakeout, which produced two reversal candles in a row (point B) below the 20-day EMA on 3/18 and 3/19.

The false breakout looks to have potentially created an important higher swing low within the base if the 3/19 low holds. Wednesday’s move above the high of 3/19 is a buy signal for at least partial size. Trade details can be found in the watchlist section above. If the setup fails to hold the 3/19 low, then we may look to exit half the position ahead of our stop just below the 50-day MA.

On the stock side we continue to see industry groups rotate and that is the sign of a healthy market. Money continues to flow back in to the homebuilders the past two weeks, with $MTH and $DHI breaking out to new highs. Money could potential be ready to move into energy stocks (refining-marketing) this week or next.

$TGH is setting up for a potential base breakout after consolidating in a tight range above the 50-day MA the past six weeks. The price action has been pretty tight and has found support at the 10-week MA while the 50-day MA plays catch up. $TGH’s industry group ranking is 5 out of 197 (very strong) and its relative strength ranking is decent at 83. Our entry is on a breakout above the 3/15 high with a stop beneath the low of 3/12.

Note: The $DHI setup is a BUY LIMIT ORDER, which means we are looking to buy on weakness only if our trigger is hit at 25.01. This is not a buy stop order.

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.