Broad Market Outlook
The SPY had some constructive action this week as it continues to form a mickey mouse base dead center in what seems to be a bigger and more obvious downward channel or breakdown stage.
As virtually all of the other sectors, separate to Energy, its mostly a coin flip for the names in the middle of the range.
There are sectors that have just broke major topping patterns to the downside like Utilities, Consumer Staples, REIT's and Telecom that all look like major avoids.
While on the flip side, Energy looks to have a magnet on retesting its 52 week high, hold those energy stocks if you have them.
While other sectors like Consumer Staples, Healthcare, Industrial's, Material's and Financials look as if they might have some legs to push up through there recent resistance and on some decent 5-10% runs from current levels.
From a top down approach, things look bleak, the 10 year continues to race higher, yet it is forming a similar pattern as it did the last time this year it went on a major run.
The dollar is breaking out and equity prices look to be in the toilet, but if you take a bottom up approach and focus on scanning individual names, there are still some names flagging out near highs, some support buy backs to be found and big bases to be spotted.
Try to focus on the stronger sectors this week such as Consumer Staples, Healthcare, Industrial's, Material's, Financials and the Dow 30 for some opportunities, if we continue to look hard enough we will find them.
Side Story - If you ever visit NYC going to The Edge at Sunset is worth it.
Little inside tip if you do, it is the most busy during the time the sun sets for obvious reasons, now getting up to the top floor is easy. Getting down is a whole different issue which is not apparent until you are there and notice its one elevator down and thousands of people trying to leave. The line for the single elevator was and I am not kidding a 3 hour line to leave this amazing venue. Looking at the line that wrapped around the entire top floor of this 100+ story building just felt like looking at the crowd of traders all without a clue just following the rules standing in a line that wouldn't move.
As there was zero chance I was waiting in that line, I stuffed a $20 in a part time employees hand and asked how do I get out of here without waiting on this ridiculous line. He tells me to go up stair to the restaurant as they have there own private elevator. Passed one security guard and a brief convo with the hostess who couldn't find us a table (we didn't want one anyways) and once we were told we couldn't sit, we walked to the private elevator and rode it down in minutes while the crowd one floor below sat on a 3 hour line to leave pissed as hell.
If you ever want to go to The Edge, get tickets, then make a dinner reservation and use that reservation as your way to take the private elevator back into the city to continue your evening instead of waiting on line like 99% of the market.
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Sensitive - sectors that have moderate correlations to overall market conditions.
Cyclical - sectors that are more sensitive overall market conditions.
We have reviewed quite a few tax returns so far and have yet to find one where we could not have added value.
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Defensive - sectors that tend to outperforming during sub par market conditions.
Big Picture Set Up
Took a shot in APLS earlier this week and got shaken out, yet it held the prior pivot and turned right back up to the 60 area, will try it again vs 54 this time around.
HSY continues to set up and flag out nicely under this 230/236 area, will look to start a position up through 230 vs 220 for now.
Just started a position in this HUM up through 510 vs 485 for now as the bet has started on what increases by 20% first, HUM or XOM.
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