market timing model: (Confirmed) Buy
Current signal generated on close of September 9.We are now in confirmed buy mode, so portfolio exposure can be more than 100% if you have a marginable account. However, please make sure that current long positions in your portfolio are working before adding new ones. Portfolio exposure should be at least 75% to 100% (or more) right now.
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. Click here to learn the best way to calculate your share size.
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closed positions:
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ETF position notes:
- $PHO buy entry triggered.
stock position notes:
- No trades were made.
ETF, stock, and broad market commentary:
Stocks closed in mixed territory, with modest gains and losses. Once again, it was the NASDAQ Composite and small cap Russell 2000 showing relative strength by holding above yesterday’s low and the 10-day MA. Although the S&P 500 undercut the prior day’s low and the 10-day MA, the price action is much more bullish than the Dow Jones, which closed near the 50-day MA. Volume did pick up on the NYSE, but its tough to label the S&P 500 a clear cut distribution day with only a -0.26% loss.
The market remains in pullback mode after a strong surge off the lows. We expect the current correction to be short lived, as long as the market avoids heavy distribution and leadership stocks hold key support levels.
Yesterday, our buy entry in PowerShares Water Resources ($PHO) triggered, after a short-term pullback off the recent high. We look for the price action to follow through to the upside over the next few weeks. If $PHO can close out the month at or above its current level, it will produce a breakout to new all-time highs on the monthly chart, clearing a prior high from 2007.
On the ETF side, we remain long $TAN with multiple entry points. The first buy entry was on July 2 at 24.20, which is currently up 27%. The second buy entry on September 6 at 30.26 is up only 2.0%, as we added to the position on a move to new highs. $TAN is currently chopping around in $29 – $31 area, while holding above the rising 20-day EMA. On the chart below, if we connect the swing highs, we also see that $TAN is holding above the trendline at the highs.
If $TAN can continue to hold this trendline, then we should eventually see another wave up, which could potentially take the price action to the $40 area.
On the stock side, $YELP and $LNKD bounced back nicely yesterday. $MELI cleared a three-day high, which we mentioned as a secondary buy point in Monday’s report.
We have two new buy setups today in $AMBA and $ONVO.
After an ugly undercut of the 50-day MA and sharp breakdown in August, $AMBA reclaimed the 50-day MA on a big jump in volume, which is a very bullish sign. We look for the price action to eventually break above $18 and move to new highs. We are buying “at the market” on Wednesday’s open, hoping to get a slight pullback if possible. If $AMBA opens above $18.50 the setup is to be canceled. Because we are buying on the open, the 5-minute rule will not apply.
$ONVO has been in consolidation mode since topping out around $8 in the summer. The recent pullback to $5 formed a higher low, holding above the prior low at $4.50. Four days ago, $ONVO recaptured the 50-day MA on heavier than average volume, which is a very bullish sign. It has since consolidated for a two days on lighter volume, with volume picking up yesterday on a move above the prior day’s high. Since $ONVO is above the 50-day MA and holding, we will not use the 5-minute rule, so if the setup triggers on the open we will go long.
