market timing model: BUY

Signal generated on close of July 7

Bull market rally. Long exposure can be in the 50 – 100% range or more depending on success of open positions.

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):

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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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position notes:

• Stopped out of $LN. Canceled $OLLI add due to earnings next week.

Commentary:

Broad market indices managed to hold on to Wednesday’s low but remain vulnerable in the short-term to further selling. A strong rally to close out the week on Friday would be ideal for the bulls.

There is one new setup on today’s watchlist in $MTSI. Note that the $OLLI buy setup was canceled.

$MTSI has formed a cup with handle type pattern, with the handle breaking out above $40 this week. We tried to enter earlier in the week, but the price action got away from us. We are placing a buy limit order in an attempt to get filled as close to Thursday’s close (or lower) as possible. The limit will function as a market order if the open is below the trigger, and will also guard against a bad fill if the price gaps higher.

$MTSI has a strong EPS rating of 93 from IBD, with five quarters in a row of strong earnings and revenue growth. It has been in consolidation mode since topping out around $40 last summer (year long base).

The stop is below the 8/17 low, but the price should hold above $40 with the 10 and 20-day MAs providing support. Since the stop is about 10% away, our share size is only 4%. If it was closer to a 4-5% stop, then our share size could have been 7-8%.

The model portfolio stopped out of $LN Thursday morning. The soft stop was just below $43, but Thursday’s plunge forced us to exit at a lower than expected price due to the soft stop.

Please note there is a hard stop in place for $LMAT in case it fails to hold Thursday’s low, and a new stop in place for $DLTH to lock in a small gain.

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.