market timing model:
SELL (click here for more details)
today’s watchlist (potential trade entries):
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 red 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 and broad market commentary:
For the second time in as many days, stocks skidded lower in broad based selling. All five major indices closed in the red, with higher beta issues leading the decline. The Nasdaq, S&P MidCap 400 and small-cap Russell 2000 plunged 2.0%, 1.8% and 1.7% respectively. The S&P 500 slid 1.6%, while the Dow Jones Industrial Average managed to keep losses at 1.1%.
As might be expected following Friday’s Russell rebalancing, turnover dropped markedly on Monday. Volume on the NYSE slid by 19.5% and on the Nasdaq by a sizeable 34.5%. However, declining volume overpowered advancing volume by a ratio of 8.1 to 1 on the NYSE and by a ratio of 6.1 to 1 on the Nasdaq. Due to the light volume, the market avoided distribution on Monday, but the negative price action and breadth of the selling certainly does not bode well for market bulls.
Since rallying above its 20-day EMA on June the 21st, the Direxion Daily Gold Miners 3x Bear ETF (DUST) has been consolidating along this key mark. If DUST can form either a reversal candle (see pink candlestick) or an “inside” candlestick (see blue candlestick), then it could present a buying opportunity above the three day high of $50.25. We will be monitoring DUST closely for a possible long entry.
All of our open positions gained ground yesterday and still appear to have more upside. We are raising the stop on one of our open positions. Details are posted in the open positions section of the newsletter. The breadth of Monday’s selling was significant. Of the one hundred and seven industry groups that we track, one hundred and four of them closed lower on the session. Further, over forty sectors ended the day down by more than two percent. We would have liked to have seen higher volume during yesterday’s selloff, as this would have placed a more definitive “stamp” on the bearish price action. Nonetheless, the market is giving little sign that the selling is ready to subside.
stock commentary:
ALXN has pulled back to the 20-day EMA the past two days after breaking out from its base on 6/19. We like price and volume action on the pullback and are listing it as an unofficial buy setup with an entry over the two-day high at 96.30, stop 92.65. Look for a move to the 103-104 area to lock in a quick 2 to 1 move. Please note that this is not an official setup.
There are no new offical setups for today. We remain short GOOG which closed near the lows of the range. A breakdown below 555.00 could put GOOG under heavy selling pressure.
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relative strength watchlist:
Our Relative Strength (or RS) 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 100 (or so) stocks in the market over the past six to 12 months. The scan is updated every Sunday, and this week’s RS Watchlist can be downloaded by logging in to the Members Area of our web site.