Broad Market Outlook
First week of the new year is in the books, see its not that scary right. The world didn't end, markets didn't crash. Just broad based buying as most people are euphoric of the year ahead.
Time will tell if the market can keep this momentum or if its like the Gym on Jan 2nd (packed) vs a month later when its a ghost town.
We saw the SPY hit and break its upper range of resistance, as a result we were locking in profits and be a tad bit more cautious as virtually any name you typed up was on a monster 3 day run.
Overall theme has been risk on, tighter stops, and take profit.
Rinse and repeat.
SPY 300+ 12 Month Price Target
You might be starting to become aware that the market climbs on a Wall of Worry, and on the way down, stocks cling to the Slope of Hope.
As we saw we started out the first week of the new year breaking out of this upper range, an obvious bullish sign, for now we just want to keep upping our stops. Seems the SPY 300 target might be getting there sooner than expected.
Nasdaq 8400+ 12 Month Target
Nasdaq had one of its best years in quite some time ending the year up 28%. Broad outlook we have plenty of lines in the sand to keep an eye out for 6,400 short term, 6,200 medium term, we stay above those we should continue the rise to 8,000+.
MDY S&P Mid Cap Stocks 400+ 12 Month Target
Mid Cap stocks long and strong until that trend line starts to show weakness.
IWM Small Caps 200+ 12 Month Target
Small Caps have been on a nice run lately and as you can see, as long as we continue to set higher lows we will continue higher until we break that support line. As you can see a healthy market has periods of break outs and periods of consolation. 2013 to 2014 was a period where small caps broke out, than from 2014 to the end of 2016 they consolidated and since the beginning of 2017 they have been breaking out. Could we continue to breakout for another year? Why not, could we eventually top out short term and start to consolidate? Also a possibility for now we want to focus on whats in front of us.
VGK Europe ETF $82+ 12 Month Target
If you are nervous about US Equities after the year we had, VGK is a few years behind us and has plenty of room to run. Recently broke out of the $59 level that we highlighted in last weeks Big Picture and heading back to the prior highs of $62, big picture would like to see it stay in this $56 to $62 range before breaking out and making a move back to highs.
VWO Emerging Markets +$58 12 Month Target
The Emerging Markets and Europe are just like Tech and Healthcare right now, trading almost hand in hand, these two (Emerging Market and Europe) are like the red shirted freshmen on the football team. There starting to get some reps in if you are looking to spread some risk overseas these two are showing they are ready to play ball.
EWJ Japan +$85 12 Month Target
Japan has been dead money for almost 20 years, however the chart is showing its hand at $66. If you need a refresher peep the SPY 20 year level that was the top of all tops. That actually was the buy of all buys.
Sector Rotation
VCR Consumer Discretionary
Consumer Discretionary's have been on fire, however we all know these vertical moves can only be sustained for so long, if still long continue to take profit into strength and move up stops.
VHT Healthcare Sector
3rd times a charm, should see VHT continue higher, measured move of this current flag should see VHT continue towards $162.
VGT Tech Sector
Tech and Healthcare are skipping down the street holding hands as they both continue to flag and breakout, we should see VGT aim towards $176 based off the current flag. On the other side of the sector rotation street we have REIT's and Utilities standing outside in the rain while everyone else is partying.
VDC Consumer Staples
This is the time to find the leaders in the consumer staples space, risk on above $147. KO and WMT are two to keep on eye on for when this sector is ready to breakout.
VFH Financial Sector
As we can see each flag has been getting tighter and shorter in duration, which tends to happen later in the stages of any move. There are plenty of financial names flagging near highs, cautiously optimistic up here, take the breaks outs as they come however keep those stops tight.
The energy sector is getting up to this major area of resistance in this wedge, just like when it broke support and came back, also very similar with the REIT sector both pushing just outside the range before reversing, we should be on guard for this potential fake out move. XOM, CVX, HAL, even the MLP APU all have been on decent runs. If this is a fake out move, keep those stops tight, take profit because we can always get back in. This sector we are not catching the 30-60% moves in a month or two like the Bio's, if you can look in 10% in XOM that's a slam dunk so just know the names your in and have realistic expections of the names your trading.
VPU Utility Sector
Inside week and down as Utilities still cannot catch a bid, chart wise better shape than the REIT's however still an avoid until we can see if buyers will set up to hold this trend line that has held since 2016.
REIT's still cant catch an bid and are standing outside of the party in the rain with there only other friend (Utilities) who were not invited. For now REIT's are an avoid until there are move blood in the waters. If you are hunting for yield, MLP's for now will be a better place if you need income.
The New Big Picture Set Up
KO $60+ 12 Month Price Target
KO has been flagging for quite some time around this $46.50/$47 area with consumer staples like KO flagging near highs other than WMT $100, this is probably one of the best places to be in this space. KO took out its major $44 level that was its high for 20 god damn years. Big picture wise through this area vs $44 is showing us it is risk worth putting on. Remember it took this name 20 god damn years to get back to this price, this name will require zen like patience, put the risk on, set your stop and let it work.
Entry $46.51
Stop $43.89
Big Picture Target $60+
Updated Big Picture Set Up's
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 15% in two 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. For now we want to keep an eye on $120 support, to see if it can hold or if it needs to shake the tree first (what ENTA had to do).
ENTA took around 2 months near highs before going, ALNY is around 8 weeks into a very similar patter.
Still needs time, will keep an eye to see if the $120 can still hold up.
Entry 140.01
Stop $119.89
Big Picture Target $280+
PFE $50+ 12 Month Price Target
PFE is more in the value camp in the healthcare sector than the fast bio's were use to, however we are starting to see some rotation to these value names near major level like INTC that was good for a 26% move in a month through $38. PFE is setting up around this $37.50 area it recently made an attempt for it however didnt have the juice. For now will be keeping an eye as it pulls in vs $35. Given its a slow name and each penny counts. I will be looking to buy $37 vs $35.
PFE is a slow name so dont expect to much fireworks, for now its about $1 work of risk, really want to see a strong move and close above those prior highs to know that its ready to play ball.
Entry $37.01
Stop $35.89
Big Picture Target $50+
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.
These new issues are sneaky and so are the bios. How tough was the ENTA (bio) buy was or even ROKU on Friday how tough it would have been to buy $52 instead of up through $48.50.
Ideally we would like to see it pull into the low $30s than turn back up through $40 however Santa doesn't always bring us our favorite setups. For now we will have to keep an eye on $40 and be ready to click the button if it wants to go sooner.
Will look to add through $36 vs $34 as a feeler when its ready.
Entry $40.01
Stop $34.89
Big Picture Target $80+
