market timing model: Sell

Current signal generated on close of June 24

Past signals:

• Neutral signal on the close of June 20
• Buy signal on the close of June 13
• Neutral signal on close of June 12
• Buy signal on the close of April 30

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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. Net P/L figures are based a $100,000 model portfolio. 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:

• $TAN buy entry triggered.

stock position notes:

• No trades were made.

ETF, stock, and broad market commentary:

The S&P 500 ETF ($SPY) failed to overtake the $161.50 – $162 level for the third day in a row on Monday. For the past two sessions, it has given back all or most of the morning gains into the close, which is clear stalling action. So far, the only index to reclaim the 50-day MA with authority is the small cap Russell 2000.

 

Because of the afternoon selloff, the morning advance in the $SPY now looks more like a run on stops for those who went short over the weekend based on Friday’s weak close. These shorts were more than likely stopped out within the first hour of trading on Monday. If there is follow through to the downside in the $SPY this week, then we would like to see a bullish reversal candle form somewhere in the $159 – $160 level (but as you know anything can happen).

After a heavy volume shakeout beneath the rising 50-day MA on June 24, First Trust DJ Internet Index ($FDN) immediately reversed back above the 50-day MA, which is a bullish sign. In the short term, $FDN may be a bit extended, so we could see some sort of a pullback develop within the next day or two, especially if the price action stalls at the daily downtrend line. We’d like to see a test of support at the 50-day MA (around $45) to produce a low-risk entry point.