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Broad Market Outlook
Less anticipating the doji at highs and more reacting to the following days price action seems to be the main lesson this month the market wants to burn into my forehead.
For those that were in MDB and STX over the last two weeks, we were given 2 perfect examples of this lesson.
In MDB we took advantage of a smooth 13% ride higher into a doji at highs, as the goal is to react to the following days price action vs anticipating what we think will happen. The following days price action said to get out and most of did as our LOD or PLOD pushed us out for a 40 plus point gain in 5 trading days. A great trade all around.
Now on the flip side for myself, I botched this lesson in STX, I anticipated the doji instead of waiting to react to the follow days price action.
From our entry through the earnings flag, STX stair stepped higher day after day, where all we needed to do was simply raise our stop vs the PLOD and hold on, which most of us did.
When I saw the doji at highs instead of keeping that PLOD stop that was working perfectly, I was greedy, wanting to keep the extra 2%, yet that mistake cost myself a monster move that quickly followed.
MDB gave us the clear sign to get out which most of us did, yet STX did not give us the sign yet I still got out. Some might chalk up the mistake to "a bird in the hand is worth two in the bush" but this mistake was my own error and a reminder of why we want to make our trading as systematic as possible to avoid these types of mishaps.
As this mistake burned a lesson learned in my forehead that reads "doji at highs, PLOD stop and react to the following days price action, trades up, hold on, trades lower, head for the exit"
Which leads me to my next point as the famous Eleanor Roosevelt once said "learn from the mistakes of others, you can't live long enough to make them all yourself", spend some times this weekend trying to find 1 lesson learned from your own recent trades and aim to share it during our Monday morning pre market call or post it in Alpha Chat and I will start to save them.
Take the mindset of the airline pilot that are open and willing to share there mistakes with there peers, which is one of the main reason why with millions of commercial flights each year, only a few run into major problems. While in the medical field doctors are educated on how to hide mistakes and avoid taking the blame, which results in more accidental and preventable deaths each year then auto accidents because they run from their mistakes.
Lets take the higher route like pilots and start collecting these trading mistakes and store them in an open source document that all Alpha members can refer to so we can continuing learning from our mistakes.
From Ben G
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Macro Rotation Outlook
SPY
Dow Jones
Nasdaq
Mid Caps
Small Caps
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Sector Rotation
Sensitive - sectors that have moderate correlations to overall market conditions.
Tech
Energy
Industrial
Telecom
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"Don’t tell me what you think, just tell me what’s in your portfolio"
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Cyclical - sectors that are more sensitive overall market conditions.
Materials
Consumer Discretionary
Financials
REIT
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Video Lesson Playlists
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Defensive- sectors that tend to outperforming during sub par market conditions.
Consumer Staples
Healthcare
Bio Tech
Utilities
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Big Picture Set Up
AMZN
This monthly flag in Amazon is looking better as each month goes by, this seems to be more of an M1 type of trade where my focus will be increasing the allocation as it trades above 3,600 instead of taking it as a regular swing trade.
BEAM
With earnings out of the way in BEAM will be looking to start a position if it break above the 100 level of resistance.
EA
Carl called out this nice blue sky breakout that could be setting up in EA, still a bit wide for now.
MMM
Got triggered in on Friday as it closed under the base breakout level, keeping a stop vs the PLOD for now.
NEE
With earnings out of the way as NEE continues to work its way towards the 87 blue sky breakout, even through it is a utility name, it might have some juice to push higher in time.
SYNA
SYNA forming a nice earnings flag, still may need some time,will look to add up through 265.
VECO
Nice little earnings flag forming in this VECO, will look to start a position above 28.
W
Got triggered in on Friday buying up through this mini base that has been forming with a stop below 240 for now.
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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
Video from the last snowboarding trip!
10 spots left, $100 deposit to hold your spot!
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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