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.
From Ben G
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