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Broad Market Outlook
We aim to be opportunist when it comes to the market or why would we ever invest?
The problem with this mindset is that during the good times we over estimate how long the good times will last.
Just as when the bad times show up, we think that too, will go on forever.
This past week, there was one major red flag that I noticed which was the playful conversation around Trading Experts buying a jet. This immediately brought up flash backs of prior easy markets where members brought up shopping for pricey time pieces or exotic cars.
The good times can continue however we want to be prepared if the bright sunny sky starts to get cloudy.
With virtually every major market and sector punching up to new highs, that trend continues on the current path (upward) as the consolidation periods form smaller and smaller flags (mickey mouse).
This is a result of the impatience of the crowd as we take the stairs higher.
This is an extremely easy time to protect our downside as most are only looking up.
We have clear pivot lows that act as our cheap insurance.
If you are dollar cost averaging higher in any market or sector, these levels are great areas to put stops in for your higher cost basis positions (your LIFO positions)
LIFO - Last in, first out
FIFO - first in, first out
By doing this, if or when the market starts to pull back or have its next correction, you will free up cash in your highest cost basis positions first either for a small profit, break even or tiny loss.
You can follow this same strategy with swing trades that you add to on the way up. You can tier your higher cost basis stops closer to the shorter term out, while still giving your core position the proper room without messing up your trade.
The accounting terms (LIFO FIFO) can be confusing, if you have any questions on this please let me know, and we can dive deeper.
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Who is going to dethrone Carl?
If you have a swing trade greater then 163% let me know so we can get you onto the leader board!
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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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Friends and Family Challenge
If you have a friend or family member that would like to give trading a shot, forward them this email and have them click here to start.
If they do, let me know there email address, I will set it up so if they decide to continue they will get the same rate as you, and you will also get 2 free month as a thank you from us!
Any questions let Heaven or myself know.
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Big Picture Set Up
PRAH
PRAH has been battling with this $116 area for almost two years now, with it flagging under this area for the last month. We are been giving a $8 risk trade. Once PRAH can clear the prior all time high of $120, who is to say it can't drift into the new highs.
Target $200
Entry $116
Stop $108
MRK
Have been dollar cost averaging into this MRK at $81 and $82, with the plan to add up through $83 vs $80 for now for a move back to the retest of $92 in time.
Target $92
Entry $83
Stop $80
