Broad Market Outlook
As the market continues to shift out of a breakout market into a range bound market leading up election day, there are still plenty of opportunities to profit from when we look a bit further under the hood.
The consumer discretionary, healthcare and bio's continue to be the leaders in this market while the financials and energy continues to stagnant and lag the rest.
As we continue to get closer to the election, most will wait on the side lines waiting for the outcome only to make the wrong investment choices with everyone else at the same moment.
Once it is announced expect the futures to be up/down huge pre market. Yet after election day the market quickly gets back to business as usual.
During the last election, the Dow futures were down almost 800 points overnight, by the opening bell the market was green and we started on a major rally. Leaving all of those people who miscalculated left out of the rally or chasing later.
Back in the 2012 election, there were only 2 down days that followed after that election, then the market got back to doing what it tends to do.
Going back further to the 2008 election during one of the worst economic periods that most of us have been alive for, there was still plenty more upside ahead then downside.
As we lead up to this day in a few weeks, most of the people you will talk to outside of Trading Experts will have the dumbest investment ideas possibly. The market will crash and its time to get out will be the common idea from this crowd.
Let's keep that in the back of our minds that the initially knee jerk reaction tends to be the wrong one. After the election is over, the market will go back to doing what it tends to do, slowly drift higher over the long term.
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
We can see this Blue Sky Breakout forming in AJG up through 110 as it flags tightly for the past few weeks, the real out would be vs 100 for now.
OTIS which is a recent IPO has been forming a blue sky breakout through $66 over the past few months, they have earnings in a few days, so this would be one to make sure you have a stop limit put in to be in through the $66 break but avoiding getting trigger in if it gaps up above that level.
We can see a clear level of resistance at 140 in HCA as it continues to flag tighter and tighter recently.
FIVE still flagging nicely under this $140 after last quarters earning gap up, with the higher lows (buyers stepping up) it could be ready soon to break out and hit new highs.
The earnings flag in PLAN continues to form, recently the $55 area was where the buyers were supporting the stock, we can see recently those buyers have stepped up to hold it up vs $57. A name to keep on the radar for this breakout.
DLTR has been flagging under this $100 level for the past few months, we can see a mickey flag forming under $98, will add through $98 and look to add up through $100 when this name is ready to head higher.
The reality of a long term hold, years of second guessing with a major of the wins that start in a few days. Now that the idea is starting to show signs that it wants to go higher, this is hand sitting time if your cost is sub $30. The measured move of this breakout should send it to the mid $50s in time.
Now that we are right, don't over watch your winner, focus on your other trades and give this name what it needs, which is time.