market timing model:

Neutral – Signal generated on the close of December 27 (click here for more details)

 

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 on two separate $50,000 model portfolios (one for ETFs and one for stocks). 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:

Having trouble seeing the closed positions graphic above? Click here to view it directly on your web browser instead.

ETF position notes:

• No trades were made.

stock position notes:

• Sold LCC and MTZ at market on the open due to weakening market conditions.

 

ETF and broad market commentary:

The Wagner Daily will not be published on Tuesday, January 1, but normal publication will resume the following day.

The timing model is once again back in neutral territory and was in danger of generating a sell signal had the broad market averages not recovered in the afternoon and closed near the highs of the day. We have only seen two days of strong buying in the market (on Dec. 17 & 18) since the market put in a big reversal candle on Nov. 28. The lack of explosive price action in stocks and the overall absence of big leadership stocks moving to new highs are the two major issues we have with the current rally attempt. We have also seen a pick up in volatility the past two weeks. Optimal performance for our style of trading (on the long side only) is achieved when market conditions are stable, making tight stops reliable. When volatility is high, tight stops are no longer reliable and the reward to risk ratios begin to suffer.

 

stock commentary:

For those new to trading or to our style of trading, please note that now is not the time to be aggressive on the long side. In a good market we would have held LCC and MTZ the original stop price before selling because the odds would have been in our favor. When conditions are less than ideal or not improving, we are forced to raise stops or move stops to break-even to control risk.

If you are a new subscriber, please e-mail rick@morpheustrading.com with any questions regarding our trading strategy, money management, or how to make the most out of this report.

 

relative strength combo watchlist:

Our Relative Strength Combo Watchlist makes it easy for subscribers to import data into their own scanning software, such as Tradestation, Interactive Brokers, and TC2000. This list is comprised of the strongest stocks (technically and fundamentally) in the market over the past six to 12 months. The scan is updated every Sunday, and this week’s RS Combo Watchlist can be downloaded by logging in to the Members Area of our web site.