Broad Market Outlook
The easy trade of the last 6 weeks has officially come to an end as the hard trade kicks off. Our last hard trade period lasted just about a month. Given this run up was steeper and faster, the hard trade period could be shorter but that is being very optimistic.
For now, less is more, cash is king, and keeping a short list of your favorite names to add to seems to be the move. Let the hero trades who have been preying for a pull back rush into the fire which often leads to increased losses and a drain on mental capital as they are not patient enough to wait for the proper time to act.
We are seeing lower highs, support breaking and bearish engulfing candles at new all time highs. All red flags that it is time to tighten the purse strings and keep cash ready.
With virtually every major sector down on Friday separate from Biotech's that closed the day up a bit, we have not seen a collective sector pull back during this entire run up recently. Lets leave our ego's aside and let them do what they want.
This is a great time to narrow down the list of names you really like and understand that there is a time and place to take advantage of them when the time is right, right now however, it is time to wait as the dust has barely had time to kick its self up before settling.
One name in particular that I am keeping an eye on is this MTCH.
As it comes into major support, it could just as easily break this major support level and head lower or buyers will continue to defend this area. Time will tell, if the later is the case, being able to sneak into this name up through 140 vs 130 is a set up that is on my radar.
Take some time this week to find your name that you have your highest conviction with and lets hear the full game plan. For the next few weeks into the end of the year, if any money is to be made, it will be selective quality trades, not quantity trades where we want to just put risk on in anything.
From Ben G
Macro Rotation Outlook