market timing model: (Confirmed) Buy
Current signal generated on close of September 9.
We are now in confirmed buy mode, so portfolio exposure can be more than 100% if you have a marginable account. However, please make sure that current long positions in your portfolio are working before adding new ones. Portfolio exposure should be at least 75% to 100% (or more) right now.
Past signals:
- 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
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. Click here to learn the best way to calculate your share size.
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closed positions:
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ETF position notes:
- Note that $PHO is now a buy stop order.
stock position notes:
- $NDLS sell stop triggered and we are out.
ETF, stock, and broad market commentary:
Stocks slid lower once again, but losses were limited to -0.5% or less across the board. The good news is that volume was light, preventing the S&P 500 from suffering a second day of distribution in a row. In Monday’s report, we mentioned the relative strength in the Russell 2000, which outperformed once again yesterday, closing with a bullish reversal candle off the 10-day moving average.
At the beginning of 2013, the S&P 500 had lots of help from strengthening industry groups. But over the past few months the participation has declined, starting with a bearish trend reversal in REITs and relative weakness in homebuilders and financials. Unless the energy sector can pick up the slack, it may be tough for the S&P 500 to catch up to the NASDAQ.
iShares MSCI Japan Index ($EWJ) has been in rally mode since putting in a nasty shakeout candle on August 30, where the price action gapped below support for a day and immediately gapped back above the next. Within two weeks, $EWJ was back above the 10-week MA, and the very next week it broke above the downtrend line on the weekly chart below.
A few weeks of tight price action would be quite constructive here. Ideally, we would like to see a two to four week consolidation with the price action holding above the 10-week MA, at/around $11.50.
On the monthly chart we see a clear resistance level just above $14, which is where we would look to exit $EWJ into strength if we were long. Currently, there is no low risk setup in place, so we will continue to monitor the action.
On the ETF watchlist, please note that we have changed the buy limit oder in $PHO to a buy stop order.
On the stock side, we stopped out of $NDLS on the follow through from Friday’s ugly reversal candle. We raised the stop in $YELP for partial size, just beneath Monday’s low.
We do not have any new setups on the stock side, but for those who missed prior entry points in $MELI, the tight price action of the past few days is a low risk buy entry over the three-day high. $MELI’s relative strength during the market selloff has been impressive. A move above the $130 area could spark a run to new all-time highs in short order, provided that the market remains healthy.
