New swing trade setup in $TSO

market timing model:

Confirmed Buy – Signal generated on the close of September 4 (click here for more details) (we are on a buy signal from the close of Aug. 16)


today’s watchlist (potential trade entries):

today's 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 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 pink shaded cells below. Be sure to read the Wagner Daily subscriber guide for important, automatic rules on trade entries and exits.

open position summary
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closed positions:

open position summary
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ETF position notes:

  • Sold IBB for a 2% gain in the portfolio.

stock position notes:

  • Note the new stop and target price in REGN. We are selling AFFY at market on the open to lock in gains.


ETF and broad market commentary:

The major averages blasted higher out of the gate in what was a powerful morning session that did not slow down until 1 pm, where the averages stalled out and chopped around in a tight range until the close. All major averages gained about 2% on the day, closing in the top 5% of the day’s range. In terms of participation the rally was very broad based, with only four of the 200 or so industry groups we follow closing lower on the day.

Total volume confirmed Thursday’s impressive price action with Nasdaq volume jumping 30% higher and NYSE volume up 17%. Total volume came in above the 50-day moving average on both exchanges as well. Market internal were also very encouraging. Advancing volume beat declining volume on the Nasdaq by the highest margin since June 6 with a 6.3 to 1 reading. NYSE adv/decl volume was also impressive at 13 to 1, which was the second highest reading of the summer. With the market already in trend mode, Thursday was another strong accumulation day for a market that is picking up steam.

Per the intraday confirmation alert, we closed out our long position in the Ishares Nasdaq Biotech ETF (IBB) when it hit the official target price of 140.80. We locked in an $1,100 gain (2% in the portfolio) on a 5% move from our entry point. Although IBB can easily move higher from here we do not mind selling in to strength and moving on to the next trade. The chart below details the entries and exit. Although our first entry on 8/14 was on reduced share size, the tight price action over the next seven bars allowed us to increase our exposure with a low risk entry point on 8/24.


The iPath Dow Jones-UBS Grains Index ETF (JJG) was the only position (in the stock or ETf portfolio ) to not move in our favor yesterday. Given the big run up prior to the current consolidation we can expect another week or so of sideways action, and that is fine with us as long as JJG continues to set higher highs within the base. On the chart below we have drawn in the ideal price action over the next week or two.


Due to the breadth of yesterday’s advance our scans did not turn up any setups with low risk entry points. Because of this there are no new official setups for today. We plan to patiently wait for new breakout or pullback setups to emerge next week. As mentioned earlier, the market is picking up steam and the evidence suggests that a meaningful rally is under way. As you know we do not make predictions on the market and we always try to operate with the “trade what you see not what you think” mantra. As of today’s close, the evidence clearly points to a healthy market so we will position ourselves on the long side until conditions change.


stock commentary:

We added one new buy setup to the watchlist in TSO. TSO has formed a tight 3-week consolidation at the highs on very light volume. We are looking for a move above Thursday’s high as the trigger.


We love the action in LNKD and plan to hold through the first pullback and sell on the next move out. We are selling AFFY at market on the open to lock in gains. We raised the stop in REGN (to protect gains) and now have an official target in place.


If you are a new subscriber, please e-mail [email protected] with any questions regarding our trading strategy, money management, or how to make the most out of this report.


relative strength combo watchlist:

Our Relative Strength Combo 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 stocks (technically and fundamentally) in the market over the past six to 12 months. The scan is updated every Sunday, and this week’s RS Combo Watchlist can be downloaded by logging in to the Members Area of our web site.