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Broad Market Outlook
As each pull back gets smaller and smaller its always interesting how they feel more painful when it should actually be the opposite.
We are not even 2% off all time highs, yet it feels as if we were in a correction.
As we continue to get use to the market environment our tolerance for pain tends to follow suit.
It may be hard to remember but a year and a half ago we became accustom to 10% down days in the broad market. Then as things settled out, we became accustom to 5% down days, then 3%, then 2% but our mindset gets weaker as the market drifts higher holding out lollipops.
When the market finally starts to pull those candy's just a smidgen out of our reach, most are quick to whine.
For now we have a key short term pivot low in the SPY at $435 that would be line 1 to start playing more defense.
Major line number 2 is the 200 day as we continue to hold above it by a wide yet manageable margin.
Major line number 3 is the psychological level of support being $400 in the SPY, the longer we can continue to hold above that the better as the market continues to work its way toward the next big level ($500).
Looking at the extended run that the broad markets have been on along with most of the major sectors expect energy and 9/10 individual stocks.
My overall outlook is that we start to shift into a range bound consolidation and during those times we make the most by trading the ranges by buying up off support and selling into resistance.
From Ben G
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Macro Rotation Outlook
SPY
Dow Jones
Nasdaq
MDY Mid Caps
IWM Small Caps
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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 Up
BBY
Some of us got ticked into this BBY up off the recent lows that was a shot on tight risk as it bounced in our favor but quickly met the 200 day that is now acting as resistance. It could be wise to get out of this as close to your cost basis as possible as we might be too early to this buy back just yet.
CTAS
After a little shakeout CTAS has finally broke out of this flag, now we are still not out of the woods and need to see if we can hold that $390 to continue to inch away from this flag and towards $500 in time.
DRI
Months back I had a round trip trade in this $150 area with far more risk, as we often forget and move on from names after we miss the trade, this seemed like one to make sure to get back involved with. Most recently it finally broke $150 and quickly came back for a sneak buy back on tight risk this time around.
ELF
One of the most successful IPO sets up from my experience is buying through the IPO years later after the name has based out. FB, BABA, SNAP and many others followed a similar route. Now the key part of this set up, is its not a swing trade, we can't trail it by a LOD or PLOD, it really needs time, this is a perfect set up for M1 to add and continue to add to once it starts to break through that $32.50 where you can give it the time and room to trade higher.
QSR
Saw a tight flag forming in QSR and took the $1.50 worth of risk to see if it can make a move back to its recent pivot highs in time.
UPS
Have to admit was not to thrilled with the action on Thursday and had to pull my stop to avoid getting ticked out in this area. It still looks great up through $200 and have to remember that this $190 area is support, key word area, not $190 on the dot but this area of $190.
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Traveling Experts
We have a few exciting experiences planned for the year ahead. We hope you find a trip that sparks your interest to come enjoy and network with other like minded members!
Dates:
4th Annual Vermont Snowboarding Trip Jan 20th-23rd
2nd Annual Blue Ridge Rally May 13th-15th
2nd Annual Long Beach Island June 15th to 19th
4th Annual Vermont Trip
Fall is upon us and before we know it, it will be time to throw on some jackets and hit the slopes.
So far we have an amazing crew coming! Dennis, Darin, Andy Hsu, Adam Ricci, Alec Schukers, Tim McElroy, Justin Frank, Yeno (Recruiter), Skender (Accountant)!
We still have 3 spots open for this years snowboarding and snowmobiling weekend if you would like to learn more email back saying "vermont"!
Video from the last snowboarding trip!
2nd Annual Blue Ridge Rally
4 spots left, $100 deposit to hold your spot!
2nd Annual Long Beach Island
Video from the last beach week vacation!
10 spots left, $100 deposit to hold your spot!
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