NASDAQ logs another distribution day ($QQQ) and Steel ETF ($SLX) potentially reversing

market timing model: BUY

Current signal generated on close of July 11 (current portfolio exposure should at least be 75% to 100% or more if you can go on margin.)

Past signals:

    • Neutral signal generated on close of July 5
    • Sell signal generated on close of June 24

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today’s watchlist (potential trade entries):

$todays watchlist

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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 a $100,000 model portfolio. 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.

$todays watchlist

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closed positions:

open position summary

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ETF position notes:

  • Raised stop on partial size in $FDN.

stock position notes:

  • Selling 200 shares (50%) of $PDFS on the open. Canceled the $KORS buy limit order. Note the changes to the $GIII setup.

ETF, stock, and broad market commentary:

Tech stocks continue to act as a drag on the market, with the NASDAQ 100 and NASDAQ Composite posting losses of -0.8% and 0.6% respectively. NASDAQ volume increased on the session, producing another bearish distribution day on the NASDAQ Composite, which now has two clear cut distribution days in three sessions. The selling in the NASDAQ is a bit of a concern, but as long as stocks such as $LNKD, $KORS, $GOOG, $TSLA, $AMZN, and $PCLN hold up relatively well, then the market should be fine. However, if these stocks and other leaders begin to break down, then the market might be in need of a few weeks of basing action to digest the current advance off the lows.

Our scans did not produce much in the way of actionable setups, so we have no new setups on today’s ETF watchlist. $FDN broke the 10-day MA, so we are raising the stop on 1/3 of the existing position to lock in gains. The stop on the remaining 2/3 position is unchanged, as we plan to let the rest of the position go with a wide stop.

We mentioned in yesterday’s report that some commodity based ETFs were beginning to turn up, such as gold, silver, and uranium. We can possibly add the Market Vectors Steel ETF ($SLX) to that list, as it looks to be forming a bullish reveral after undercutting a strong support level at $40 in June (see monthly chart below).

$SLX bullish reversal

Whenever a stock or ETF cracks an important support level on the daily, weekly, or monthly time frame, if the price action bounces back right away and holds above the support level, that is generally a bullish sign. We also see that $SLX found support at the backside of the downtrend line, which is only bullish if it can immediately head higher higher and not return back to the trendline.

On the stock side, we stopped out of $BEAT yesterday, as it broke beneath the low of the 7/16 reversal candle. If $BEAT can’t hold above $6, then we might have to wait for a test of the 10-week MA on the weekly chart for a low risk entry point to develop.

We are selling 200 shares (50%) of $PDFS at market on Wednesday’s open to lock in gains. We are also going with a tight stop beneath Tuesday’s low in case there is a negative reaction to Wednesday’s earnings release, which is after the close. We are cancelling the buy limit order in $KORS, but will continue to monitor the action for a low risk entry point.

$GIII did not officially trigger yesterday because the open was more than 1.3% above our trigger, so the trade was automatically canceled. If you are long, please hold on to the positon with the original stop. $GIII remains on today’s watchlist with an entry over the high of 7/22, which is also above the intraday spike yesterday around 11:30am at 50.50.

We have one new setup on today’s watchlist in $SEAS, which is not scheduled to report earnings until 8/13. $SEAS is a recent IPO from April that has formed a decent base over the past two months. Note that the price action is holding above the downtrend line of the consolidation. The buy entry is over yesterday’s high, with a stop just below the four day low. If $SEAS can close above $40, then it could be off to the races, as there is no overhead resistance at new highs.


In tomorrow’s webinar we will once again go over position sizing for those who could not attend Monday’s webinar. Also, we will continue to list the old and new share size for the rest of the week. Starting next week we will only be posting a percentage in the share size columm. Please email me ([email protected]) if you have any questions regarding position sizing.


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