market timing model: BUY Signal generated on close of Sept. 21

Market timing model is on a buy signal, but the market remains range-bound, so the signal so far is weak. Waiting for conditions to improve before increasing long exposure past 30-50%.

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:

• $TPIC buy entry triggered.
• Note that we raised the buy limit order in $MTCH.

Commentary:

Stocks sold off in the morning session, but were able to find traction after 11:30am and push higher the rest of the day. The S&P 500 and S&P 400 reclaimed the 50-day MA, with the S&P 500 doing so on an up tick in volume.

Wednesday’s reversal action off the lows in the S&P 500 was a positive sign, as a break of Tuesday’s bullish reversal candle could have been ugly.

Although all broad market indices are still range-bound, the action under the hood appears to be pretty good. Our watchlists are in decent shape, with stocks such as $MTCH, $GDDY, and $PYPL breaking out or poised to break out soon.

We have one new buy setup on today’s watchlist in $Z, which reclaimed the 50-day MA on a pick up in volume. Since breaking the downtrend line of the base, $Z has pushed through the 20-day MA and 50-day MA on a pick up in volume, which is a bullish sign.

We’ve placed a buy limit just above Wednesday’s high to guard against a bad fill, but we are basically looking to enter near Wednesday’s close. The stop is placed well below the 20-day EMA to give the trade a little breathing room.

We would like to add to the position down the road as the price fills out the right hand side of the base (think of all the action below the downtrend line as the left hand side and above as the right hand side).

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.