Broad Market Outlook
After spending the last few days with some of the Trading Experts family on the beach. We were heavy invested in our volleyball matches, football games and midnight drag races on the beach. Where you could barely hear a whisper of what the market was doing as it was out of sight and out of mind.
Like anything enjoyable in life, marginal utility often comes into play. Where the increased consumption tends to decrease the enjoyment derived from what is being consumed over time.
3 days having some fun is just enough, yet 30 days would be a drag.
Eating a few slices of pizza can be fun yet the enjoyment of each subsequent slices drops until we fall into a food coma.
This too has a similar effect when trading, especially more for the newer traders with less time in the market.
In the beginning (from experience and working with thousands of traders over the years), every candlestick counts, every news article matters, every pre market uptick is information. Yet most are just a time suck, that keeps us glued to the screen with performance that could rarely match the market.
As a result one's mental capital starts to drain, until their tank (account) is empty. This is why to really survive as a trader, you need to be able to step away, disconnect and enjoy life from time to time.
The markets have been here for more then 100 years and its safe to say they will still be here long after we are all long and gone.
Missing a day, week, month or year is not going to be life changing and something you will not regret down the road.
Some things you might regret are missing out on enjoying life, late night tear inducing laughs and spending time with friends and family will always exceed the feeling of locking in profits.
With mostly all the sectors closing the week looking anything but buy able, if the weather is nice this week, go have some fun, we will be the first to notify you of any text book support buy backs.
From Ben G
Macro Rotation Outlook
MDY Mid Caps
IWM Small Caps
Do You Have The Patience to Make It On the Leader Board?
Sensitive - sectors that have moderate correlations to overall market conditions.
"Don’t tell me what you think, just tell me what’s in your portfolio"
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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
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Big Picture Set Up
After a quick 12% move back near all time highs, its time to take some profits off the table (M1) and rotate the proceeds back into names that are closer to support. For the week ahead I will be taking profits in AMZN and SHOP and putting the processed back into UBER and ETSY that are still setting up.
APH still showing us $69 is the level we want to be ready to buy when it is ready for some blue sky's.
IT still in this super tight earning flag at all time highs.
It seems we will be getting stopped out of this MXIX this week, which is fine with me, it was an extremely lucky trade that could have just as easily been a 6% loss instead of a 6%+ gain.
We can see NFLX support buys have started to step up as it continues to base out for more then a year now. This consolation is setting NFLX up for that run to $1,000 when no one is watching.
With SHOP up more then 50% in two months running tight into the retest, this is often the time we talk ourselves into holding because it looks perfect. I will be take half of those 50% profits and rotating these gains into ETSY and UBER.
SNAP worked its way right back to $64 for what seems to be the 7th time, if you are looking to buy $64 this week, the stop is $59, repeat the stop is $59, if $5 is too much risk, buy less stock until it is a proper amount of risk. Nothing worse then being too cute with a stop to lose money in it a handful of times only to miss it when it goes.
UBER is started to flag out here for some time now, will look to add above $52 vs $48 when UBER is ready to start its trip back to highs.
Going to keep an eye on ZBRA as it pulls back into support for a potential buy back, still no rush to jump in just yet.
Beach Week 2021
Hope everyone attended had as much fun as I did, from Ricky kicking everyone's ass in chess, to Andy hiding in the dishwasher during midnight nerf gun battles and endless laughs and all around smiles all week, can't wait to see you all again very soon!
Already have a date locked in for next summer if you would like to attend next year!
It's hard to think about a winter ski trip when summer just started but like most trips they will be here before we think.
The 5th annual Vermont Snowboarding trip will be in January that will be open to 15 Alpha members if you would like to lock in your spot, sleeping arrangements come first come first serve (private rooms vs bunk bed rooms).
Reply VT to learn more!