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Broad Market Outlook
All summer the market has been giving us blue sky's and sunny weather as we enjoy the profits that follow as the market continues to hit new all time highs (Nasdaq) or race back towards them (SPY).
Now on the way up, everything is calm and easy to understand however we sometimes forget about the charts and let our emotions do the thinking.
With the SPY approaching the prior all time high, what is your 1st thought, that it continues the trend and break 340? Most likely right, its just been trending higher so why fight the trend?
Now maybe it does go higher, which is what tends to be in the back of most minds traders at this time however history has continued to show us that the first retest tends to be met with more sellers then eager buyers.
We saw this with the Small Caps that finally broke out this week after retesting the prior pivot high back in June.
We even saw the all might Nasdaq respect the retest and breakout on the 3rd attempt at 11,000.
Let's continue to hold great stock, up our stops, and keep in the back of our mind the notion that the market could start to shift from the breakout/grind higher market, into one that tries to consolidate near the all time highs to set up for the next leg.
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Macro Rotation Outlook
SPY
Dow Jones
Nasdaq
MDY Mid Caps
IWM Small Caps
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Discount Code Alpha20
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Sector Rotation
Sensitive - sectors that have moderate correlations to overall market conditions.
VGT Tech
VDE Energy
VIS Industrial
VOX Telecom
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Cyclical - sectors that are more sensitive overall market conditions.
VAW Materials
VCR Consumer Discretionary
VFH Financials
VNQ REIT
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Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
VHT Healthcare
IBB Bio Tech
VPU Utilities
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Big Picture Set Ups
V
JPM
JPM has been setting up for this $100 level for some time now and the first target will be this $115 area, it should and will get back to highs in time however for our trade, that should be the first main focus of trying to hold till that area.
DRI
This DRI has been flagging for quite some time now, for now the proper out is still $5 lower which the main goal as always will be to up that to breakeven if we get some follow through $80.
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Big Picture Stops
MMM
We got great stock in this MMM up off support and has snapped back into the middle of this range. For now we can keep the breakeven stop and be patient as it sets up for the $164 breakout.
NKE
For now NKE is respecting the $100 level when $97 is the proper out, its setting up for 3rd times a charm through $105 so try to be patient with your stock.
WSM
WSM is breaking out of a half decade long pattern, give it some time with a breakeven stop.
