Broad Market Outlook
It has been great to see the group as a whole be able to make the pivot toward buying off support and adapting to the continuously changing market conditions being thrown at us.
Longer term as we continue to improve our trading as a whole, still focusing on bull flags but shifting the point of entry to more patient buys off support. We will be even better prepared for each trade going forward.
Over the years we have been so focused on the breakout, yet we often would get chopped up in the range, taking unnecessary losses while the stock was flagging. With this market forcing our hand to bend to the new rules of engagement. We are learning to trade the range and keep some for the bigger move. That will benefit us two fold, the lesson and patience we will have to work on, is holding once the stock does start to break out.
A great example of this has been INTC, everyone who was buying off support vs $56, was able to kick into $62/$64 and make 10%, while others who knew we were watching or trading INTC were looking to buy $62. We made 10%, they broke even or lost money with the same idea.
With support buys, remember on the way up and respect your out, unlike buying resistance where the buy is with the trend, support buys tend to be fighting the overall trend, if your wrong, get out.
Macro Rotation Outlook
MDY Mid Caps
IWM Small Caps
Sensitive - sectors that have moderate correlations to overall market conditions.
Cyclical - sectors that are more sensitive overall market conditions.
VCR Consumer Discretionary
Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
IBB Bio Tech
Big Picture Set Up