Broad Market Outlook
When we are driving down easy street, we often underestimate the blind corner that is just around the next bend.
With the SPY up 14% this month retesting the prior all time high of $365 most are trying to keep up with traffic.
Scanning all of the major sectors this past week, most adds were based off mickey mouse set ups with the justification of "everyone's going straight, let's keep up", a red flag.These are often times where anything less then 100% fully invested seems like money wasted.
Back in March after a 20% run, the feeling was similar.
At highs, virtually everyone was looking up, trying to drive faster, when upping stops and applying the brakes was the proper move that no one saw coming.
In August we saw a similar road, the market stair stepped 15% higher into the retest, formed a tight mickey mouse flag under the prior all time high with just enough gas in the tank to push a bit higher before the market broke down.
We are seeing similarities on the current road that is a bit more aggressive.Those easy streets took months before any sharp turns, currently this road has only taken us weeks.
If the market can continue on easy street above $365 then none of these precautions really matter with very little standing in our way until the next red light at SPY 400.If the market does want to throw some black ice on the road, we know when to start applying the brakes.
SPY 365 plus - easy street continues
SPY 361 below - foot off the gas
SPY 360 below - roll on the brakes
SPY 350 below - apply the brakes and coast through the turn
Drive safe out there!
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
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Any questions let Heaven or myself know.
Big Picture Set Up
Have been keeping an eye on this $115 Blue Sky Breakout in ABT, as it pull back into support, I will look to add up through $109 if this is the recent low.
AMGN took a feller vs the recent low with the plan to add through $230, if $218 is not the low and it still needs to flush $210, I will take my paper cut loss.
This LITE has been flagging for quite some time, will be looking to add up through $86 vs $82/$80.
Got into this NFLX last week that almost felt too early, yet has respected and held the recent low of $475. Added on Friday and will add up through $496 to be in for any move up through $500 which has been a clear battle ground to break in the recent $100 point range NFLX has been trading in.
If it can clear $500, my goal will be to hold until the retest of $570, if not, I will part ways below $475.
RNG has been flagging in this $300 area for some time, with it getting tight vs $280 could be worth a trade vs that area into new highs.
As TWTR has traded into the gap fill, I've moved my stop from $42 up to break even ($44) and most recent upped it vs $46.
The next area of resistance one could expect would be the $48 area which would fill the gap, if it can push through the next real area to focus on would be the prior high.
V setting up for 3rd times a charm through $218 in time, we dont want to miss that one for now with the current out being vs $204.