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Trading Experts

Weekend Newsletter 6/11/17

Wild end to the week with Nasdaq FINALLY meeting its maker after an incredible bull run. We saw a ton of sector rotation across the board as Dow Industrial's closed at all time highs while Nasdaq was down nearly 4% at lows. Let's take a closer look at this rotation

Dramatically green in some sectors like healthcare, financials, industrial goods & basic materials. Dramaticlly red in tech, consumer goods and the notable FANG stocks. 

The way a 'healthy' stock moves goes as follows ---- sideways action followed by a breakout --- followed by healthy digestion with more sideways action until the next breakout, and so on.

 

The Nasdaq's run has been virtually straight up, not stair stepping all the way up as a healthy chart would. Because it wasn't stair stepping higher, it did not create support all the way up. That means that when the inevitable flush comes -- it will be a SHARP move lower, which is what we saw Friday

Enough ETF's -- Onto some charts!

The BABA news effected everything Chinese in the market -- including some of our favorite names. 

Made a video depicting the wild day I had Thursday and the importance of mastering Trading Psychology.

(Video Below)

With so much weakness in the Nasdaq, Tech sector & Chinese stocks, we're going to have to look towards the relatively strong names for trades. We haven't traded these names all year due to the massive run the Nasdaq gave us. These are generally slower moving names as the high beta's are mostly found in the Nasdaq. 

Change is hard. But change can be good!

Trade of the Week: AL Long

Nice inverse head & shoulders in this AL. Love how its getting super tight just under the resistance level. We should see an expansion once the level breaks. 

Trigger: $38.50

Stop: $37.99

Target: $40+

Someone's gotta keep the lights on around here! 

All in all, its's VERY important to understand the sector rotation that's going on. I'd be very surprised to see the Nasdaq quickly bounce back after such a horrendous, high volume, down day. There is still a ton of opportunity out there, just in some different sectors that may not be my personal favorite to trade. That doesn't change any of the setups out there though.

Gameplans. Gameplans. Gameplans.

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