Broad Market Outlook
Election day is on Tuesday, so let's remind ourselves that on Tuesday night the futures will be up/down a significant amount. More then likely that initial move will be the knee jerk reaction in the wrong direction.
By the end of this upcoming week, the markets fish bowl attention span of the election will be long gone and back to worrying about what it wants to fear next.
We did a great job last week, doing nothing, the fact that we sat on our hands made us money and kept our mental capital full.
As we inch toward the retest of support, what does most traders want? To hold perfectly and start rebounding higher. Does the market give most what they want? No, Mr Market serves his dishes cold.
Could we shake that 320 low in the SPY with what's in store for the week ahead? More than likely and that gives us ample opportunity to take advantage of all of the stocks that are approaching major support levels to buy up when the market turns.
During times when the markets are slow, its great to shift your focus elsewhere, if you are selling on Amazon, great time to research some new products or find out which current ones you need to stock back up on. If you have not recapped your months trades, learned from your mistakes and set your goals for November, what are you waiting for?
As a trader, we need to be aware that in most markets, there are times to be risk on, risk off, and times to nimble. Every day can't be this mad dash to be risk on. Embrace the slow weeks and appreciate the time its gives you to excel in other areas.
Macro Rotation Outlook
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
Friends and Family Challenge
We have recently made it a bit harder to successfully make it to Alpha, you may have only needed to complete 3 steps to get into Alpha or more recently 5 or 6 steps.
To keep the chat with just the most highly motivated traders, we have made it much harder to get in.
If you have a friend or family member that would like to give trading a shot, forward them this email and have them click here to start. If they do, let me know there email address, I will set it up so if they decide to continue they will get the same rate as you, and you will also get a free month as a thank you from us!
Any questions let Heaven or myself know.
Big Picture Set Up
After reviewing the similarities between how FB traded post IPO and how SNAP has been following a similar path, we should expect a retest of the prior IPO high. Meaning that we should not be shocked if SNAP fills the gap to the down side and heads back to $30. FB spent almost half a year chopping around in this area (above IPO high and lower then the post earnings run up) before making a real push out of this area.
If your in SNAP sub $30 a share, try not to watch it daily as its going to lure you into making a decision, when the right decision should be holding till next earnings.
With the broad markets pulling in, one would expect a harder break of support at the lower end of the gap, however it was as weak as a 2 year old's right hook. If this is the scary selling to except, then we could grab stock on a support buy back on the way up through $57.50 if this is the worst that's in store for this name.
With earnings out of the way in this recent IPO, we can see it so far holding up in this range and currently forming a higher low. It might be too early to just blindly buying $62 vs $58 to be in, but if it can continue to hold that area and we can find a tighter risk entry, we can be better prepared for that $66 Blue Sky Breakout down the road.
LITE is still flagging nicely in this range, given this name and how it loves to shake the tree, if we can get a flush down through $80, that might be whats needed before its ready to test $86 again to the upside.
GRMN is showing us that there is a buyer at $97 holding this stock up, we don't want to rush and buy $106 day 3, but if it can flag a bit and give us a better entry could be worth the buy through the Blue Sky Breakout.
With the market pulling back, FIVE has not gotten the memo so far, this $140 level is one we don't want to miss.
BRKR showing up a text book flag up through $44 in time, for now its in a 10% range, so we want to wait for a tighter entry.
BIDU has been basing down here for almost 2 years now, which is just long enough that it could be starting to poke its head out of the base and into an uptrend as it works its way back to highs. We can see how in the past the prior uptrend turned into a downtrend that lasted 2 years and recently showing the basing for 2 years. This will take time, not weeks or months. But if you have the patient, who's to say it cant start working its way towards the $160-$180 area.