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
Macro Rotation Outlook