Broad Market Outlook
Let's just call a spade, a spade. The market sucks right now, its frustrating, its choppy and exhausting to watch. As we continue to see "first's" that we have not seen in decades. Such as the 10 year breaking out like a momentum stock. Mortgage rates breaking out through 8% and money market accounts actually paying interest. It is an interesting time to be in the market as Mr Market always have a few new fears and trick up his sleeve.
Now as frustrated as you might be, for one, realize what the market does or does not do (go up everyday). There is nothing we can do to control that. So there is no sense trying to waste our time trying to instill our views onto the market and expecting to get back what you wished for. If you do want to let out a few curse words at Mr Market, please do so now before we continue.
After those few curse words and some deep breathing, I hope you feel a little more calm as we move onto the reality of what we should expect with the coming weeks.
Now as frustrated as we are with Mr Market at the moment, lets not forget what he gave us this year. He gave us a market that started out at 52 week lows and gave us a half year rally that lead the market 21% higher.
To be honest, Mr Market deserves our praise, not our anger. Now as we can see with the stages the market has shifted through. We know the breakout stage is far gone, we have been aware of this topping stage. A topping stage that we hoped would turn into a textbook consoldation. Yet as support is starting to break, the reality is more then likley a break down stage is in the cards.
Yet when the breakdown stage starts or is in effect, it seems as if it will never end and feels twice as long and painful as those short lived breakout stages that often last just as long.
Even in break down stages, markets and stocks rarely fall in a straight line forever. They often get stretched like a rubber band, that eventually snapped back once released. Where there can be fast moves to take advantage of after the markets rubber band really gets stretched to its limits. Right now we are no where near those limits yet after a few more down days and a gap down to capitulate the market. Then it might be a different story.
These periods of time when the risk on trading is hard to come by, these are times to focus on the long term investing side of things. While also focusing more time and energy on creating your shopping list of your favorite names or focusing on where most of your earnings are coming in from outside of the market.
These periods always pass with time even if they feel like they are here to stay. Execpt to see more fear mongering headlines that the world and markets are about to collapse. But just remember, the news will tell you to get in at the top and rush out at the bottom. Remeber to odd lot what the media "tells" you the smart things to do are. As there business is to sell clicks, not advice in your best interest.
Let's give the market and our names some time to get taken to the woodshed and when the storm passes we can sift through and find our bargain deals.
Macro Rotation Outlook
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Sensitive - sectors that have moderate correlations to overall market conditions.
Cyclical - sectors that are more sensitive overall market conditions.
Defensive - sectors that tend to outperforming during sub par market conditions.
Big Picture Set Up's
Have you seen any of the videos of the Apple stores with the release of the new basically same Iphone? Complete madness for people fighting to get a phone that is a gram lighter. If the market is heading lower in the short term, so be it. But this support buy back in Apple could be rip for the picking if/when the market turns around.
This VMW is giving us clear clues that it could careless about what the other stocks are doing. Buyers are respecting the 160 area of support as they continue to try and attack this 170 breakout area.
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