market timing model: SELL Signal generated on close of Sept. 9

Last Friday’s breakdown generated a sell signal. One can still be long stocks that are holding up well.

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:

• Canceled the $GIMO buy limit order for now but will continue to monitor the actinon for a pullback entry.

Commentary:

Broad market indices rallied across the board, led by the strength in big cap Nasdaq stocks. The Nasdaq rallied on higher volume, but failed to produce a follow through day with only a +0.8% gain. We’d prefer to see a 1% or more gain for the action to be considered a follow through day. That being said, Thursday’s action was a second step in the right direction this week after Monday’s bullish reversal action.

The weekly chart of the Nasdaq is only one day away from printing a bullish reversal candle. The 5200 level should serve as support on any pullback.

We have one new buy setup on today’s watchlist in $TEAM, which is a recent IPO from last December. The price has formed a tight range this week above the rising 50-day MA, with the volume dropping off (generally a bullish sign).

TEAM has an EPS rating of 92 with a +100% 3 to 5 year EPS growth rate. The current six week consolidation has a depth of 15% off the swing high, and is currently sitting less than 10% off all-time highs.

We placed a buy limit order just above the 50-day MA to establish a half position on weakness. We will look to add to the position as it moves off the 50-day MA on a pick up in volume. The August low will serve as the stop for now.

Ideally, we’d like to see the market produce a follow through day next week (or Friday) while avoiding distribution in the short-term, which would generate a buy signal in the timing model. How leading stocks act over the next few days should provide us with more clues.
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.