S&P 500 Relative Weakness Means No New Swing Trade Entries

market timing model: SELL Signal generated on close of Sept. 9

Still operating on a sell signal. However, one can still be long stocks that have held up well if operating with a longer time frame.

Note that the market timing model was not created to catch tops and bottoms in the S&P 500. The model was designed to keep our trades in line with the prevailing market trend. Buy signals (confirmed) are generated when the price and volume action of leading stocks and the major averages are in harmony. This means that we could potentially have a buy signal in a major market average, but if leading stocks are not forming bullish patterns, then we are forced to remain on the sidelines until patterns improve.

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. 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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position notes:

  • $GDDY and $CVGW buy setups triggered.

Commentary:

Broad market indices gapped higher, but failed to follow through and sold off in the afternoon session. The weakness in the S&P 500 is a concern, as the price action is now consolidating near the lows of the September 9 selloff, with the 10 and 20-day MAs trending lower. The lack of any bounce suggests further weakness.

$spy DAILY

Looking at the weekly chart of $SPY, there is clear support around the 207 – 208 area, from the 40-week MA and prior downtrend line.

$SPY WEEKLY

The Nasdaq Composite is in better shape than $SPY, but stalled once again at 5270. It would seem unlikely that the Nasdaq could push to new highs with the S&P 500 struggling. As mentioned yesterday, we expect a few weeks of choppy price action.

$NASDSAQ DAILY

The good news regarding a potential selloff is that new buy setups should eventually emerge as long as the weekly charts remain bullish.

With the market a little shaky, it is probably best to avoid new entries at least for the next day or two. Both $GDDY and $CVGW were added to the portfolio on Monday but failed to impress. Per our intraday alerts during Monday’s session, we are placing a very tight stop in $GDDY and selling $CVGW on the open. Hopefully, some of you were able to react to our unofficial alerts to sell during the afternoon. Both sells should result in a small loss.

We are selling $BABA on Tuesday’s open due to the false breakout action. We do not mind taking profits here, as we are up almost 30% on our initial entry and 20% on the second entry (6% on third entry). This is a pretty big gain for a stock with such a massive market cap. There are also prior highs to deal with on the left hand side of the weekly chart. Depending on the sell price, the profit should be at least $1,600 or just over 3%.

$BABA daily

We raised the stop in $LMAT to just below Monday’s low to guard against a false breakout and lock in a 20% gain. The red cell indicates a hard stop, which is to be sold immediately when triggered. $GDDY is also a hard stop.

From the self-serve section, $TEAM and $OLLI can be sold due to Monday’s weak action. For most self-serve entries, one should look for volume to confirm the entry rather than just buying once the setup triggers.

Self-Serve Watchlist:

This is an unofficial watchlist of potential setups for today’s session (trade results will not be monitored). This list is for experienced traders only who are looking for a few ideas. No targets will be listed. Please check for earnings before entering.

All stops are on a closing basis unless listed as a “hard” stop.

$self serve

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