market timing model: BUY

Current signal generated on close of November 13.

Portfolio exposure can be anywhere from 50 to 100% long. If positions are holding up well, then one can add exposure beyond 100%.

Past signals:

• Neutral signal generated on close of November 6.
• Buy signal generated on close of September 9
• 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

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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:

• $AL buy limit order triggered.

ETF, stock, and broad market commentary:

Stocks closed out a strong week with some stalling action on Friday, with most averages closing in slightly negative territory.

With the broad based averages a bit extended in short term, we may see a few days of choppy action to allow the 10-day MA to catch up.

On December 20, we purchased Guggenheim Shipping ETF ($SEA) at 20.39 on a base breakout. Note the big volume on the chart below over the past two weeks.

The strong volume confirms the breakout and signals that $SEA may be ready to move significantly higher through the first six months of the year.

Along with $SEA, Nikkei 225 Index ETF ($NKY), PowerShares Golden Dragon China ($PGJ), and Global X FTSE Greece 20 ETF ($GREK) have formed bullish chart patterns. We recently bought $PGJ in the ETF portfolio on a downtrend line breakout above the 50-day MA.

After a four month long rally off the lows, Market Vectors-Coal ETF ($KOL) stalled at resistance from the declining 40-week MA. After a few weeks of chop, $KOL broke the uptrend line of the rally and closed below the 10 and 40-week MAs.

The 10-week MA has also lost momentum, as it is beginning to turn down after going sideways for a few weeks.

$KOL has been in an ugly downtrend since August of 2011, unable to climb back above the 10-month MA, which is much like the 200-day MA on a daily chart. A breakdown below the current base low could lead to a test of the 2009 low around $12.

A bounce into the declining 10 and 40-week MA’s on the weekly chart could make for a low risk entry point on the short side (for those interested). However, with our timing model on a clear buy signal, we are not looking to initiate short positions at this time.

Note the split stop in $FAS in the open positions section above.

On the stock side, we added one new position in $AL on a buy limit order, looking for the price to hold above the 50-day MA.

Note the split stop in $KNDI in the open positions section above.

We are monitoring a few stocks for potential entry points on weakness.

$ALGN is a medical stock with solid fundamentals and a strong relative strength ranking of 92 in the Marketsmith platform. We are looking for a slight pullback to the $55 area.

We are already long $SCTY, but would like to add to the position on weakness to moving average support around the $53 – $54 area.