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):

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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.

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closed positions:

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position notes:

• No trades were made. Canceled $ELLI buy setup.
• All cells highlighted in red on the open positions watchlist indicate a hard stop, which means the position is to be sold right away when the stop is triggered. All other stops are on a closing basis, and are sold the following day (on the open) after closing below the stop.

Commentary:

Small and mid-cap stocks continue to climb higher while S&P 500 ETF ($SPY) is still unable to clear $219.

Wednesday’s heavy volume bearish engulfing candle on the daily chart of $SMH suggests that the current uptrend may need a few weeks of rest. If so, then $SMH could act as drag on the Nasdaq.

No positions were bought or sold during Wednesday’s session. Upon further analysis, we decided to cancel the $ELLI buy setup due to the big red candle on 7/29. $ELLI could still breakout and run higher, but we’d rather look elsewhere for a cleaner setup.

We have one new buy setup on today’s watchlist in $STS, which closed with a bullish reversal candle on a pick up in volume. These big reversal candles make the trade entry and exit a pretty simple one.

We are using a buy limit order to guard against a bad fill. Any open below the limit should be filled as a market order.

The stop is below Wednesday’s low, which should hold in the short-term. If $STS is ready to go, then it should move out pretty quickly.

$STS has a 98 RS rating and 95 EPS rating from IBD.

Note that $MIME has a hard stop at $16.99 to lock protect gains. It either continues to run from here or we are out with a 12% gain.

Note that we are selling $MTCH on the open due to the lack of follow through. We will continue to monitor the action for a re-entry.

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.