We are 3% away from all time highs. It feels almost surreal to be saying that in May when just last month, the global markets were blowing up because of tarriffs. After an afternoon of racing at the speed limit (wink), a few of us were disussion just how wild this V recovery has been. The best part of the conversion was hearing that Victor was pumped about the down days. It continues to be an amazing sight to see as these group continues to mature as traders as a whole.
I can still think back to some of the first corrections the Alpha chat encountered where I would have to ask parenting type questions to members, such as "if rates rise....." fill in the blank. So they would be prepared for the upcoming market drop if the FED increased rates.
This most recent Bear Market (21% drop), the chat navigated it phenomenallypsyocand even psycho's like Victor enjoyed the drops. Now that we are 3% away from highs, you know it, I know it, everyone knows it, except Goldman or Cramer that we will be retesting highs very soon.
There has been some comparisions to the 2020 V recovery where the market snapped back and continued onto new highs.
After this 20% drop, I could see another 20% rally north of the current highs, but before that happened. We should expect and plan for some chop at the 613 retest area. We know how many times that we have seen major retests turn into resistance. This one should be no different. Back in 2020, it still took 4 attempts before it was ready for the next leg.
Those 4 attempts also took an entire quarter to chop around before that next run really got going. As we get back to highs, we will see the articles and headlines as to why you should sell your stocks because of the drop back to lows. But we have to remember that when the news tells you to do something, its far wiser to do the complete opposite.
For all of us who stuck with your DCA's through the drop and added more after the first correction and added even more during the brief moments of the bear market. You are seeing those rewards already in your account. You did the hard thing the last two months, you planted the preverbal seed in the rain store. Your plants are blooming, let them continue to bloom and grow.
Switching gears a bit from the macro stuff, sector wise Consumer Staples continue to flag near highs and look poised to make a run at new highs. Inside that sector BUD for all you beer fans is showing us a massive base that has been setting up for years.
Since 2022 BUD has not been able to get above 68 and as of late its been forming a tight flag in a $4 range. I already have a BS stop through that 68 area and this name will be my main focus for the week ahead.
On a side note, it was great to see the members who showed up, I know it was last minute but hope to see more of you all at the next meet up very soon!
Macro Rotation Outlook
