Waiting for low-risk entry points to develop

market timing model:

Confirmed Buy – Signal generated on the close of September 4 (click here for more details) (we are on a buy signal from the close of Aug. 16)


today’s watchlist (potential trade entries):

today's 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. 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.

open position summary
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closed positions:

open position summary
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ETF position notes:

  • Note change in stop to UWM.

stock position notes:

  • Sold 50 shares of ACAT on the open for a scratch.


ETF and broad market commentary:

As we have seen numerous times over the past several days, the broad marekt bobbed and weaved in an indecisive fashion throughout the day, showing a lack of committment among market players. Stocks oscillated in a sideways range throughout most of the day, slipped lower in the afternoon, then rallied in the final 30 minutes of trading. The end result was a 0.3% gain in the Nasdaq Composite ($COMPX), a 0.2% advance in the S&P 500 Index ($SPX), and a 0.1% rise in the Dow Jones Industrial Average ($DJIA). An encouraging sign was continued relative strength in the small and mid-cap sectors. The small-cap Russell 2000 ($RUT) and S&P Midcap 400 ($MID) tacked on 0.4% and 0.3% respectively. Unlike the preceding two days, all the major indices finished near their intraday highs.

Total volume in both the NYSE and Nasdaq ticked about 5% higher than the previous day’s levels. Since stocks finished near their intraday highs this time, the higher volume gain of the broad market could be considered positive. However, the percentage gains in the main stock market indexes were not significant enough to consider it to be an instance of confirmed accumulation among banks, mutual funds, hedge funds, and other institutions. Still, advancing volume exceeded declining volume by a margin of more than 3 to 2 in both exchanges.

With an announcement on economic policy to be presented by the Federal Reserve Board today (Thursday afternoon), most big market players were probably on the sidelines today. Likewise, we generally are not thrilled to jump into new positions ahead of a Fed day, unless the overall environment happens to be extremely bullish. As such, we will keep today’s ETF analysis and broad market commentary short.

ETFs still on our radar screen for potential buy entry on a Pullback include: iShares Nasdaq Biotechnology Index ($IBB), DB Gold Double Long ($DGP), and iShares Hong Kong Index ($EWH). We are also still closely monitoring iPath DJ Grains ($JJG), or possibly Elements Agriculture ($RJA), both of which are commodity ETFs, for potential buy entry as well. As for our sole open position in $UWM, Wagner Daily subscribers should notice in the Open Positions section above that we have raised the stop again, this time to just below the two-day low.

As always, expect a significant amount of intraday volatility and erratic price action following the Fed announcement on economic policy. Although many traders will shy away from establishing new postions on a Fed day, we prefer to focus on the charts and trade what we see, not what we think.


stock commentary:

We added two new entries to the watchlist in ONXX and ELLI (adding to existing position). We like the slight pullback off the highs and yesterday’s reversal candle in ONXX. ELLI is trading in a very tight range on the hourly chart. We are adding to the position above the 27.35 level. ALNY broke out on heavy volume and hopefully it can follow through to the upside and run 20% or so over 2-3 weeks.


If you are a new subscriber, please e-mail [email protected] 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.