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Broad Market Outlook
SPY, Dow, Nasdaq, Tech, Telecom, Financials, REIT's, Staples & Healthcare all put in new all time highs about two weeks ago. We have done a solid job, sitting idle and for the most part doing nothing as the market has pulled back in an orderly fashion.
My two cents is that we are still continuing to shift out of the up trending/new all time high 3 out of 5 days a week market into a range bound consolations type market that the Small and Mid caps have been showing us for the last 9 months.
If my two cents may be right then the next battle after new ATH's and a pull back would be the grind back to retest those all time highs and continue to trade in a side ways fashion until the markets and sectors are ready for their next legs.
If the Small and Mid's are giving us any clues, then those legs might need some resting for quite some time. We obviously don't want this just like how we hated taking that nasty cough medicine as a kid but that's often what is required.
As we know the longer the consolidation the bigger the breakout, yet as markets, sectors and stocks go on big runs each consolidation tends to get smaller and weaker until they have to shake people out.
Like most, I have continued to put together my shopping list while keeping cash sitting idle in my active accounts while the ideas are still limited.
There are often times when they are endless set ups and times when if you can find 1 or 2 your lucky. We are in the latter of the two at the moment.
I personally have no buy stops in at the moment and took gains in two swings that I have milked since April (MMC and UPS keeping small positions back to break even just in case).
Continue to be patient and remember that you are not required to buy or sell a stock every day the market is open. There are times like the present that doing less is often much more then we want to think.
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
CVX
As energy has lagged most of the major sectors it has started to base out and CVX is one that is following suit, setting up for a move up through $100 vs $95 in time.
DRI
DRI has been battling with this Blue Sky area for the last 6 months, for now to avoid continuing to get chopped up in break even trades, I will personally just wait for the $154 ATH to break before looking to try to sneak in.
ETSY
For those still in ETSY, lets be patient and wait till the retest before looking to lock any profits in.
JNJ
JNJ has pulled back into a support area that could be worth a shot up through $167 vs the current low as we see it started to hug the 200 day as support.
NBIX
This NBIX has been basing for quite some time now up through $100 should sent it back to the prior ATH's in time, if we could sneak in up through $100 vs $92 for a move to $140 could be a solid trade but this may take some time.
PHM
PHM is still one to keep on the radar but we want to keep an eye on the $50/$51 area, the only red flag is now its under the 200 day which will act as resistance. Keeping this on the radar for now to see if it can set up under this $50/$51 area after a few attempts.
PRU
Up through $108 in time looks great for a move into the high $120s just need to set where the next pivot low forms.
TRV
Text book blue sky breakout forming up through $163 just may take some time.
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Video from the last snowboarding trip!
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