Broad Market Outlook
After the two week run into recent resistance the range market continues to show its hand broadly speaking as the market trades in a 12% 50 point range between 410 and 460.
Broadly speaking we want to buy up off support (420ish area) and be looking to sell up here in the 460ish area. Yet in the moment the opposite often feels right.
This past week there were a lot of great call outs that worked beautifully even given the markets minor pull back off resistance. Even with the broad market pulling back overall, there are still plenty of strong sectors to focus on and some obvious ones to avoid. That we will go over from strongest to weakest.
Utilities continues to hit new ATH's which can be a good clue to proceed with caution as this is a flight to safety sector.
The Energy sector is flagging high and tight near 52 week highs where the path of least resistance seems higher until this uptrend breaks.
Consumer Staples just retested its prior all time high and we know what to do when that happens (take profits, raise stops).
Healthcare is right behind the Staples as they are a few points away as well from that retest/profit taking area.
A few sectors that are still setting up, we have Materials that have successfully retested its all time highs for a 3rd time last week and eventually we will look to buy up through those highs in time but for now patience seems to be the move.
REITs are doing a great job consolidating as it seems that they too, like the sectors above would like to work its way towards its prior all time highs.
The few sectors we want to avoid right now are telecom, bio techs and industrial's that are all in clear breakdown stages.
For the week ahead I have orders in ESS (REIT), EQR (REIT), IT, OKE (Energy), TSCO and SEE.
Separate from trading with the tax deadline less then a week away if you need help filing an extension if you are not prepared to file, please let me know we will be pretty focused on taxes for the next few weeks and letting the buy stops do there thing in the mean time.
Macro Rotation Outlook