market timing model: Buy
Current signal generated on close of September 9.Portfolio exposure can be anywhere from 25% to 100% long depending on how individual setups are holding up. When the broad market averages pullback in (like the Russell has as of late) it’s usually a good time to establish new entries if bullish setups are available. Remember, to add more positions, some of your existing positions must be doing well. Do not add new positions if your first 3-5 selections are not making any progress at all.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.
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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, stock, and broad market commentary:
Stocks recovered from early selling and rallied higher in the afternoon to close in positive territory. The only index to close negative on the day was the small-cap Russell 2000 at -0.4%.
The relative weakness in the Russell 2000 last week sent the index below the 20-day EMA on Friday’s close (though it’s still above the 21-day SMA). As highlighted in last week’s commentary, there is quite a bit of support in the Russell around the 50-day MA, in the 1,070 to 1,080 area.
The Claymore/AlphaShares China Small Cap ETF ($HAO) has had a rough two weeks of trading, but we remain long as the price action is still in trend mode.
Looking at the daily chart below, the action is still holding the 20-day EMA, but support from the uptrend line and 50-day MA is now above the breakout pivot at $25.00.
Whenever the 50-day MA climbs above the entry point of a position we are holding it’s usually a great sign, as the 50-day MA is a big time support level in an uptrend. Subscribers should note the new stop price listed in the open positions section above.
Our weekend scans produced a few quality buy patterns, and First Trust ISE Cloud Computing Index Fund ($SKYY) was one of them.
On the weekly chart below, we see that $SKYY cleared the top trendline of a long-term channel just under two months ago. The 10-week MA is now also above that top trendline and is providing support to the current six-week consolidation at the highs.
$SKYY recently pulled back to and reversed off the 50-day MA, which led to a sharp rally and false breakout two weeks ago. The current pullback found support at the 20-day EMA the past few days.
This is the second consolidation in $SKYY since the big base breakout in mid-July. The price action should hold the 50-day MA and push higher over the next few weeks, as there is little overhead resistance with the current base well above the top trendline.
On the stock side, our long position $URI remains in good shape, as it’s consolidating at the highs the past two weeks in a tight range on light volume.
$KORS sold off on higher volume last week to the 10-week MA, but earnings are on Tuesday (11/5) after the close.
The current close in $KORS is about 7% from our stop price. When holding a stock through earnings, we prefer to have a small profit buffer so that a worst case scenario of a 10% gap down on the open won’t be that much lower than our current stop.
For example, if $KORS closed on Tuesday 5% above our entry, and our stop was 7% below the entry, then we could survive a 12% gap down with no problem, as that was the loss we were willing to take when the trade was entered.
Please note that we will only hold stocks with top relative strength and fundamental rankings through earnings.
$MELI reports earnings on 11/7, and we plan to hold throgh the report as long as we are not stopped out.
There are no new setups for today. We continue to monitor $YNDX, $YELP, $AMZN, $POWR, $BLOX, $AMBA, $TSLA, $HIMX, $SCTY, and $P for low-risk buy points.