The Big Picture Outline
- Broad Market Outlook
- Sector Rotation
- New Big Picture Idea
- Updated Big Picture Idea's
(click on each chart for a bigger version)
Broad Market Outlook
If you looked at the 40+ charts Shake highlighted in the last Shake Down over 90% were higher. We murdered AKAM, SQ, ALNY, WIX, WDC, ALTR, SEE, SHAK, NFLX, BLUE, STZ, MZOR, SFLY,TWLO, YELP, MGM as well as a hand full of other names.
Now if you are still holding swings you are in a pretty good spot to hold for any continuation this up coming week. If you were more hands off last week, do not coming in swinging trying to press it playing catch up. There are still so many opportunities out there and a lot of names that went on absolute tears last week where you need to be upping your stops and taking some profits. WDC for example was up 7 days in a row all huge green days as it ran to $100. You need to be upping stops during the feasts because when they turn they turn just as fast even not faster as people panic out.
Market wise we are seeing how Nasdaq just put in a new highs and has been the compass for the over market. Markets tend to move together so if Nasdaq is taking out highs, one could expect the rest to follow suit at there own pace. Try to spend less time looking at the SPY and more time looking at charts to find the names that have not broken out yet.
Sector wise there are some opportunities in VDE, VDC, VNQ and VPU that I will look to exploit for the week ahead.
Stock wise some names on my radar are LULU, DECK, WB, HTHT, ASIX, BABA, SINA, HOLI, ANIP,EDU,FSCT,MDGL,ESPR,MASI,CERN,ESPR, YRD,TTD, UNH, GRFS, PFE, ULTA, RDFN for the week ahead.
Nasdaq 8400+ 12 Month Target
3rd times a charm, surprise surprise, tech has been leading this market higher for the last year, why wouldn't that trend continue. Now remember just like a stock as we start to get towards the latter stages of the overall move the periods of consolation get smaller and smaller. After the correction it took less than a month to take out those highs, the prior consolation took over 4 months, the one before that took almost two years. For us its great because we get much faster moves to the upside however when the tide turns its can be fast. Big Picture wise we should see that 8,400 target sooner than later.
It seems now that for the week ahead we will be inside this new range between $265 to $280, and just like how we wanted $270 to hold, the market had to push it just enough to shake people out, I would suspect the same when we get near highs of this range.
Last weeks BP
As mentioned in last weeks Big Picture we expected to stay with that $265 to $280 range closing the week at $278. Stocks really closed the week strong and Nasdaq making new highs was nothing short of impressive. For now the SPY is playing catch up and a retest of highs seems to be in the cards however this will only be the 2nd attempt at that level. For now our line in the sand is SPY $270 above good, below bad. This week we should expect the range to be within 270 to 287.
MDY Mid Cap Stocks $400+ 12 Month Target
The Mid Cap's are ahead of the Large Caps as of late, however up here if you are putting on risk in this space you are late to the move. Above $350 is the new line in the sand and as you are aware the 2nd retest of a prior high is usually met with resistance just look at NASDAQ for a refresher.
IWM Small Caps 200+ 12 Month Target
When trading where is it easier to capture 10% in a day? In a small bio tech or a thick name like XOM? The small bio right? Same goes for the overall cap weighted index's, the Small caps should move fast than the Mid Caps and the Mid Caps should move faster than the Large Caps. Hopefully you are started to notice this overall trend.
10 Year Treasury Note Yielding 2.89%
You might start to hear terms like "inverted yield curve" in the media (turn off the tv) or online, and it may seem confusing. There is one historic leading indicator that will give us a big red flag that a recession is on the horizon which is an inverted yield curve.
Very simple an inverted yield curve is when the 2 year Treasury Bill pays more than the 10 year Treasury Note.
Right now 10 year Note is yielding 2.89% (higher = good)
Right now the 2 year Bill is yielding 2.25%
Were Gucci however when the 2 year starts to yield more than the 10 year, that's a red flag.
VGK Europe ETF $82+ 12 Month Target
VWO Emerging Markets +$58 12 Month Target
Not the cleanest chart however have been adding $48 looking for a retest of those highs at $51.
EWJ Japan +$85 12 Month Target
Started to nibble at $60 in EWJ, we all know the major level is $66 however we are able to get some stock on tight risk to be better suited and more patient buying $66 down the road.
- For any of the major markets or sectors, we are parking these positions in a taxable account looking to hold for a year plus (Long Term Capital gains)
- Meaning we are willing to hold positions against us as overall sectors and markets are much less volatile than individual names.
- We are buying or adding (dollar cost averaging) when there are actionable set ups.
- We are selling for either profit or getting out for breakeven if better opportunities arise elsewhere in other sectors.
- If you plan to add this strategy to your portfolio please discuss it will me so we can make sure you are not parking these ETF's in retirement accounts locking up tax deferred capital that can be put to better use in individual stocks.
3rd times a chart to new highs, tech has been the go to all year, for now the line in the sand is $172 above it stay in the game as the next stop $200 should be there sooner than later.
This $148 level is the major level to watch as it was support and now acting as resistance, only the 2nd attempt near that area so would be cautious trying to get in up here when the out is $7 lower vs $141 for now.
VCR Consumer Discretionary
VCR back near this resistance area as it is setting up to retest those prior highs, similar song as VIS, late up here where the real out is $8 lower at $158.
VHT the area we have been buying has been $156 where as of late the line in the sand is as close to our price as possible being $154. With VHT finally taking out the rest prior high it seems that a move back to highs is more probable.
VDE Energy Sector
VFH took out that recent downtrend line with power however we are getting very close to those prior highs, for now we want to see VFH stay in this $71-$75.50 range so we can eventually buy through those highs in time.
VDC Consumer Staples
VDC is setting up for a move back through that prior breakout level of $141 through this area the recent pivot of $138 could be used for the out. Will be adding $141 if it goes this week.
VNQ finally getting some legs down here and showing us $76 is the level to add, now not expecting this to just break $76 and rage back to highs, however this is an area that I will be adding as it is now getting tighter as the buyers are finally started to show there faces.
VPU is similar to VNQ where we are not expecting fireworks as it is in the bottom right of its chart however these are the lower risk value type of buys that you need to take advantage of when you are allocation money into these major sectors. This downtrend break around $110 vs $107 seems a decent spot to add for an eventual move back to highs in time.
As you can see I was just a tad to early to that down trend break before the correction, however was able to pick up some low risk stock, even though I was a mook and didnt buy $83 when I saw it yet couldnt put the trigger. For now it seems that $90/$92 is the area of this downtrend break. For now above $86 all fair game, we dont really want to have any chance to buy $83/$84 again.
The New Big Picture Set Up
The Big Picture JAZZ $220+ 12 Month Price Target
JAZZ has been off our radar for almost a year now as we last tried it through $156 however we were too early. Recently it has been started to set up for a move through $156/$160 eventually through that area we should see JAZZ take out those prior highs.
Big Picture Target $220+
The Big Picture's Updated
The Big Picture SWKS $172+ 12 Month Price Target
This SWKS $112 has been a level since Shake and myself were trading next to one another on the Mook desk. This $112 looks sick however we want to see it pull in and settle out a bit, as its just ran $17 points in a month. Earnings are out of the way and tech has already been leading this market higher. We give SWKS the proper room and $112 should be like CAT $114 that was good for $50-$70 in a year.
SWKS triggered for the 4th attempt at this major $112 level, for now upped the stop to the weekly low of $108.
Big Picture Target $172+
The Big Picture SHAK $60+ 12 Month Price Target
You guys remember when Shake called SHAK through $38 that was good for almost $10 as well as it triggering the Big Picture $40 level. After that run it, has traded as we expected, retesting $39 and attempting to shakeout that prior $37 area that we were originally buy against.
Now this is when we want to keep an eye on SHAK for the sneaky buy back up through $39 again.
The sneaky buy back so far has been working very well, time will tell how it will react to that $47 level.
Big Picture Target $60+
The Big Picture LULU $110+ 12 Month Price Target
This LULU gave us the textbook shakeout this week and ripped higher, now just two weeks ago we were looking to buy $80 a week later, some were getting shaken out at $80. What a time?
With that being said, black spanx's are still battling with this highs, and earnings are not until April, so we have some time if this wants to get going. However if not, not the end of the world. So far the tightest risk stop on a Big Picture Trade since NKTR that was a $1 stop.
LULU for most who have been trying to catch it perfect has been somewhat of a work out, right now we know a few things, we need to buy $82 and need to add $84, this however will need to be a trade where you are patient and let it work. It is starting to remind me of LMT for a few months back peep below.
In LMT I just kept buying it the tightest flag for months only to eventually stop myself out a day before the start of what became a $100 point rally. LULU is reminding me of the same story, we wanted to buy $80, now were trying to get out at $80 when in 3-6 months when this thing is at $110 we are going to look back and wonder what the fuck we were doing. Right now if $80 wants to flush and stop us out so be it, however we have to be adding $82/$84 when it wants to go.
Big Picture Target $110+
The Big Picture WUBA $140+ 12 Month Price Target
WUBA has spent the last 3 years getting back to those prior highs, and when the market was at highs, just enough people were able to push it through those highs to take about that perfect level. However after the dirty shakeout that followed as the market corrected WUBA put in a higher low (good sign). $84 will be the level we want to keep an eye on.
WUBA as of late was one of my worst day 1 losses in a bit losing over 3%+ day one, and got filled on that level again after earnings only for it to get smoked and I just had to sit through the pain, the next day it showed that was the shake out needed to rip it higher. Moving the stop up vs that low on Friday either its ready to take out those highs or it will still need some time to digest that $80 either way I just want to be protected on the downside.
Big Picture Target $140+
The Big Picture CVX $160+ 12 Month Price Target
We made a mistake when we were focusing on the energy sector and that was focusing on XOM sure chart wise it was a great value play and had the smallest amount of risk from our entry the overall headwinds were still south.
Yet the leader CVX received much more love. So far we can see how there's two key areas we want to watch, $120 and $134 while the real line in the sand has been above $100 in CVX for going back as far as October 2016.
If Energy continues its overall weakness as it hovers near support of its wedge, we want to keep an eye on CVX to see if it can hold up vs $100. If it can great signs where we can start small and add through levels. This will be a patient one. Remember this is a heavy thick oil name, not a light and wide bio tech.
CVX triggered the $116 level however as you have seen in prior Big Pictures we have been adding into tighter risk areas into pain and now have switched to buying the breakout. Still a long way to go before we can retest those highs. For now moving the stop up to $110
Big Picture Target $160+
The Big Picture WVE $80+ 12 Month Price Target
WVE is a recent new issue biotech, as we have seen this name has been a beast this past month and showing its hand that $40 is still the major level (2nd time retesting it) where we can expect the sellers who were trapped from the first go around to take stock off for as close to break even as possible.
WVE still pulling back in which is fine could be cute and try to add $48 however rather wait for a better set up to add.
Stop Upped $39.89
Big Picture Target $80+
ALNY $280+ 12 Month Price Target
ALNY has been setting up for this $140 level for quite some time now, which looks somewhat similar to ENTA a prior Big Picture Idea that's up 50% in 8 weeks. Now will it trade exactly like ENTA?
Probably not, however chart wise we know $140 is the level that we need to be in for.
ENTA took around 2 months near highs before going, ALNY has been flagging in this $20 range for 3 months now.
After the paper cut buying $124, bought it back again a few days later which still was not the easiest buy to hold through and added on Friday above those highs. The next spots are $136 and $140 being the Big Picture level. For now upping the stop to the $120 area. $140 will be a must add no matter how it setups.
Big Picture Target $280+
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