Broad Market Outlook
With the S&P a mind blowing 2% off all time highs, the chatter of the bull market being over tends to be on the tip of most new traders tongues.
We did a great job doing for the most part nothing the last week or two as the market has chopped around in a 5% range.
Yet technically still forming new higher pivot lows keeping the overall uptrend in tact.
Until that trend changes, we should continue higher.
A break below $368 would break that trend of higher pivot lows but for now we are not there.
My thinking is still that we shift into a range bound market moving forward where we trade between 370 and under 400.
Consolidating the recent up move and setting us up for the next leg higher through the psychological level of 400.
In a range bound market we are paid buying up off support which means we have to be more focused on the scary days finding those low risk buys that come the following days.
This is obviously a bit harder as our emotions tend to be high on the 3rd down day.
Focusing on larger cap lower beta names such as the Dow 30 can be a safer move as we can see a handful of tight risk set ups off support.
These slower moving names give us more time to get into them vs the higher beta names that can move much more violently during these brief markets where we appreciate the slow names.
If we stay in this range broadly speaking we want to be buying up through 370 holding through 380 and selling into 390.
These are often times when most want to try some wacky new strategy like running on the highway at night in all black, just jog on your treadmill at home like you normally do.
Be selective, buy on the way up in tight risk spots and keep things simple.
Do You Have The Patience to Make It On the Leader Board?
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
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Big Picture Set Up
AMGN held up at its prior area of support this week giving us a nice sneaky support buy back on tight risk.
AMZN shook out the $2900 level of support that has held for almost a year now and snapped right back. That seems to be a key area below $2900 could easily see this back below $2000 in time. If it can hold here, no reason why it cannot push through $3400 in time on its way to $4,000.
FBHS held that key $80 area of support that has been holding this flag up, given that it didn't shake that area out, no one is really forced to chase or get back in. Meaning FBHS might grind back to $92 and even breakout but it probably wont be as aggressive or fast of a move since everyone is still holding as they were.
HON has been flagging up here for more then 2 quarters now giving us a tight entry vs $200 to sneak into what should become a blue sky breakout in time.
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