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Broad Market Outlook
As we continue to get into the slowest trading period of the year that tends to end near Labor Day Weekend we have to be reminded not to try and force trades that are just not their.
There are still opportunities out there, yet the really great ideas are slim.
We saw the market flag out all week and close the week hitting new all time highs with a clear mini pivot low vs $435. That area gives us a defined out yet the downside of that is that as the consolation periods get smaller they eventually crack.
It is a bit unrealistic to expect the market to hold itself up for a run much higher on a 1% flag. We see it in individual charts all the time, a big base forms, then the stock breaks out and flags for months in a wide range, moves higher, then flags out for a month in a smaller range but still a meaty one and moves higher, then just when it becomes obvious to all that it needs to go higher in the smallest flag is often the short term top.
We are seeing exactly that in the market since it broke out of 400. Each new consolation is getting smaller and smaller. Eventually we will need to retest and a 10% correction would only send us back to the 400 area which would be extremely healthy.
Our last correction was at the end of last summer.
During these last few weeks of summer when most of the real market movers are kicking back in the Hampton's this is often an easy time to shock the market.
This is not some dire sell everything and hide in the basement message, its just a reminder that after a long enough time of the market marching higher(100% in the last 18 months), we soon start to expect that trend to continue and cant imagine any other possible outcome. This is just a reminder that we need to be aware of other possible outcomes so when they do arrive we are not shocked and can respond accordingly.
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
CMCSA
CMCSA has earnings behind it and looking to be one of the most text book Blue Sky Breakouts in the market right now. You could even limit the risk vs $57 if you wanted to keep it tighter.
COF
It's funny how prior to getting into a position it could look great then once you are in, you realize its heading right back to its prior retest with realistically very little upside in the short term. After coming to this realization as I got filled on Friday. I moved my stop to the LOD (close to breakeven) if the $168 retest wants to do what retests do 9/10 times they reach those areas.
DFS
DFS (M1 position) I added to in my swing account through the bull flag through ATHs with financials breaking out on Friday, could be good for a move higher, for now my stop is vs $120 if we do not see follow through on Monday I will be quick to limit the risk to break even in this swing.
MMC
Took some profits in MMC by selling my higher cost basis position and keeping my core, if it trades higher its a win, if it pulls back into the $140's I can look to buy back what I sold.
QRVO
Earnings are out of the way in this QRVO and its still setting up nicely through $200 the risk is still about 10% so we need to give it some time to continue to set up.
SNAP
We can see SNAP turning its prior resistance areas into support for now ($72), I have an order in to buy above $80 (new ATH), it still might not be ready yet and will give it the extra room to the upside on the buy stop to avoid getting in prematurely.
TXT
Was tempted to up my stop in this TXT based off the daily action but when we zoomed out to see the monthly action, need to give it some more room. Now granted the proper stop really would be vs $65 however given how its pulled back at its prior attempts at $73. The few dollars if wrong is not going to make much of a difference. If this is the time its ready then it should continue higher if it is not, its worth the $2 risk. I have buy stops above $73 and the ATH $74.50 with a stop vs $68 from my $70 buy.
UPS
After the earnings gap down UPS has started to show us some support in this $190 area. I will be looking to add up through $195 and eventually up through $200 in time vs this low.
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Traveling Experts
We have a few exciting experiences planned for the year ahead. We hope you find a trip that sparks your interest to come enjoy and network with other like minded members!
Dates:
4th Annual Vermont Snowboarding Trip Jan 20th-23rd
2nd Annual Blue Ridge Rally May 13th-15th
2nd Annual Long Beach Island June 15th to 19th
4th Annual Vermont Snowboarding Trip Jan 20th-23rd
Video from the last snowboarding trip!
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2nd Annual Blue Ridge Rally May 13th-15th
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2nd Annual Long Beach Island June 15th to 19th
Video from the last beach week vacation!
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