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Broad Market Outlook
After a 6% pull back off all time highs that broke the steep uptrend the market has been on for the better part of the last year, the mood was as doom and gloom as it could get.
All the bad news started to pop up and mattered when the daily candles were red for a change.
With the main news story that seemed to stick was how a sub $30 Chinese stock was going to crush the world economy.
(If this is not a reminder on why we try our best to avoid cheaper names)
Separate the viscous that revolve any company lately with the word "ever" in it has had this year (Evergreen, Evergrande).
The market quickly came to its sense to realize how stupid that idea was. This was not another Lehman situation but just another sketchy Chinese company blowing up after too many risk bets made.
As the market found its senses and footing we had a nice week overall as support buy backs started to work and over favorite social media name broke out to new all time highs.
As the overall market has reclaimed half of the recent pull back leaving it dead smack in the middle of this 6% range the shift from a breakout market to a consolidation market continues to take hold.
In these types of markets we want to be looking to take profit at the retests (SPY 450) just when the market looks perfect.
If we learned anything from this recent pull back, just when it looks the worst, it's often about to get better expect if it has "ever" in it.
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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New Lessons
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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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Friends and Family Challenge
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Code FAMILY
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Big Picture Set Ups
ADP
ADP and TXT both set up for nice sneaky buy backs and for this one still keeping the stop vs the recent low of $196.
AFL
Took a position in AFL after it held its prior support area, if this area holds the plan is to continue to add as it sets up for the Blue Sky Breakout through the $60 area.
HZNP
HZNP showing us a text book Blue Sky Breakout forming, for those already in, could be smarted to give it more room, for myself starting my position up through $112 I will need to limit my downside.
PHM
Keeping this PHM on the radar as it starts to base out for a sneaky buy back up through the $50 area in time.
REZI
Took a shot on $1 risk near its major support, for now it is looking like this trade may be failing.
SNAP
After buying the ATH in SNAP back in August, thought it would be a bit longer until it would be ready. After showing us some clear level of support at $69 the buyers were ready to take out new all time highs. I was skeptical of this $80 breakout after the run it has been on but it proved me wrong.
For those swinging it from this flag, please try and wait for the measured move ($90) before looking to take profits. I personally will be holding my full position still.
TXT
Took the sneaky buy back entry but as it is starting to look like more lower highs upping the stop to break even from the proper stop vs $66.
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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
4th Annual Vermont Trip
Video from the last snowboarding trip!
10 spots left, $100 deposit to hold your spot!
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