The Big Picture Outline
- Broad Market Outlook
- Macro Rotation
- Sector Rotation
- Sub Sector Rotation
- New Big Picture Idea
- Updated Big Picture Idea's
____________________________________________________________________
Broad Market Outlook
In our backyard everything seems fine and dandy, SPY retesting highs, Nasdaq near highs, Mid and Small caps also flagging near highs, while in countries like Russia, Europe, the Emerging Markets, China and Japan area all weak? Now as patriotic or pro America we are, globally markets for the most part move hand in hand.
As we now enter the last few weeks of summer would be more alert for what we hate seeing, stocks not going up. Now there are always stocks that are going up, you just need to find them and during times like this it requires just a bit more scanning than normal.
Sector wise Consumer Discretionary's above $176 look best, names like MCD $160, LOW $100, MAR $124 will be names in that sector that I will be keeping an eye on. Names outside the sector will be watching ORBK $66, FANG $136, INXN $66, EXPO $51, SLB $67, ANDV $152, ODFL $150.
____________________________________________________________________
Macro Rotation Outlook
Cheat Sheet
Nasdaq new resistance 7500
S&P 500 retested prior high, should expect weakness
Dow Jones still range bound
Mid Caps setting up for new highs
Small Caps flagging near highs
China back near lows will DCA above $100
Japan $58 DCA
Europe $56 DCA
Emerging Markets $42.50 DCA
India waiting for pull back to settle
Russia $20 DCA
10 Year 3% flagging
Bond's basing
USD higher, bearish for stocks
Oil $71 support
Nasdaq 8400+ 12 Month Target
Still in this rising channel with a new level of resistance at 7500 that seems like it might be resistance for a bit.
SPY 300+ 12 Month Price Target
Dow Jones 300+ 12 Month Price Target
The Dow 30 still hanging in this range however still needs some time to set up.
MDY Mid Cap Stocks $400+ 12 Month Target
Mid caps showing us that it really wants to break this level however just not quite yet.
IWM Small Caps 200+ 12 Month Target
Small caps starting to flag and hold up near highs which is a great sign however if we want a hard break through highs, a shakeout will be needed.
GXC China +$150 12 Month Target
Overseas markets all are showing alot more weakness relative to our markets however will still DCA above $100.
EWJ Japan +$85 12 Month Target
Above $58 will look to DCA in Japan.
VGK Europe ETF $82+ 12 Month Target
Above $56 will DCA in Europe.
VWO Emerging Markets +$58 12 Month Target
Emerging markets are still hugging this downtrend line and given a retest of lows seem to be in the cards would be looking for a shakeout, will still DCA above $42.50.
INDA India +$53 12 Month Target
India starting to roll over after the 10% run it went off lows which is fine, remember stocks, sectors, markets and countries do move in more than one direction.
RSX Russia +$30 12 Month Target
Will DCA above $20 in Russia.
10 Year Treasury Note Yielding 2.88%
The 10 year is starting to flag in this 2.7-3% range seems like we will see higher yields in time.
You might start to hear terms like "inverted yield curve" in the media. 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 2.88% (higher = good)
Right now the 2 year Bill is yielding 2.62%
BND Bond Market
Bonds basing as it has been as of late, snooze fest.
USD
The dollar has finally poked its head out of this range it has been in for quite some time, should expect higher prices which is not good for domestic stocks.
OIL
Still just chopping around after the recent pull back, given the energy sectors nice flag yet oil's crappy trading, smells fishy.
Fun fact there is 42 gallons of gas in a barrel of oil which comes out to around $1.88 per gallon. So when your at the pump paying $3-$5 now you know why these countries fight over it so much.
____________________________________________________________________
Sector Rotation
Key points
- 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.
Cheat Sheet
VGT rising wedge right here
VDE bull flagging
VIS needs time
VOX needs time
VAW needs times
VCR 170 DCA
VFH 71 DCA in time
VNQ avoiding
VDC need time to take out recent pivot high
VHT retested prior highs, defense
VPU avoiding
____________________________________________________________________
Sensitive - sectors that have moderate correlations to overall market conditions.
VGT Tech
Could not be more textbook, tightest stop $191.89.
VDE Energy
Still flagging however will be keeping an eye on how/if $100 holds.
VIS Industrial
Still range bound, needs time.
VOX Telecom
____________________________________________________________________
Cyclical - sectors that are more sensitive overall market conditions.
VAW Materials
Still range bound however was just not ready yet to take out $136, no biggie just needs more time.
VCR Consumer Discretionary
Retested highs for the 3rd time however with this sector they tend to take a little more time than 3rd times a charm for a regular stock.
VFH Financials
Eventually $71 will be a buy however for now it seems a pick up near support will yield a better return.
VNQ REIT
Support still showing resistance is not ready just yet to break.
____________________________________________________________________
Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
Stables have been the weakest all year and finally started to retest its prior pivot high however it will need some time to set up for a move through that to retest the prior high.
VHT Healthcare
Healthcare retesting highs, however we have heard this song before. Defense time.
VPU Utilities
Just holding, no DCA's yet.
____________________________________________________________________
Sub Sector Rotation
Cheat Sheet
WOOD 76 DCA
IHE retested prior high
IBB flagging near highs
XT 38.55 DCA
WOOD
76 DCA
IHE Pharmaceutical
Retested prior highs, we know this story.
IBB Bio Tech
IBB flagging near highs however its already gone on a major move, should need some more time.
XT Exponential Tech
XT looking as A+ as a sector could above $38.55 in time.
____________________________________________________________________
The New Big Picture Set Up
The Big Picture AXDX $48+ 12 Month Price Target
AXDX is a healthcare and medical equipment company that has been a name we have trade a few times on this $30 breakout as you can see from the weekly this $30 level has been setting up for 4 years.
Next DCA above $23.
Big Picture $30.05
DCA $23.05
Stop $19.95
Big Picture Target $48+
____________________________________________________________________
The Big Picture's Updated
The Big Picture AFL $60+ 12 Month Price Target
This $46 level in AFL has been setting up all year and as of late it is handing us the tightest risk entry as possible, now sure the real out is $1.50 lower however we are seeing how we can sneak in on less than $.50 risk.
As AFL ran into a prior level of resistance took some profits and with the rest of the stock will give it the room needed to get out of this range and break higher.
Still holding up near highs however its still hanging in this range, for now holding and will look to add above $47 in time.
DCA $47.05
Stop $44.45
Big Picture Target $60+
____________________________________________________________________
Trading Experts Turks and Caicos Summer Camp Recap
The weekend debauchery is over and its back to business, however it can't hurt to recap what Shake has dubbed our TE Summer Camp that no one under 21 would every be allowed to attend lol.
As you might remember from Exuma, the young JD was asleep for 72 of the 74 hours we were there, however on this trip exiting the plane with half a dozen beautiful ladies in tow, he kept those eyes opened the entire trip. Darin took the crown from JD and even Willy, the dogo that we took out for the day was even concerned when he took over the wheel and started driving the boat.
All jokes aside, it was great to meet even more Alpha members on this trip and to learn about there backgrounds and the improvements that they have made. Darin and Max big ups to the progression you both have made and your stories still give me goose bumps.
On another note please start calling Rob Learn, Rob 2 Times, as on the last day he (I kid you not) lost his passport again!!! Only to find it minutes before they were about to ship his ass back to the embassy, talk about a round trip trade that one was.
It is safe to say that everyone has returned home with a subtle English accent as Kris always kept the group laughing no matter if it was with him or at him (he may or may not have grinded with a tranny and he was in front). The look on his face is one of someone who just laughed so hard they shat themselves (as Kriss would pronounce it).
We wanted to take the lessons to a more literally sense, as you can see here Shake is telling JD when its time to load the boat and when its time to jump ship, however for JD he has no stop loss.
All in all it was another successful trip in the books and our largest group to date. On our end (Shake and myself) its amazing to see how 15 people who for the most part other than speaking in a group chat can so quickly come together and act like family, have a great time while still learning even if its how Kriss can finish a water bottle in 2 seconds.
(JD is low key drowning)
Big thank you to everyone who came, Darin, Max, John, Kriss, Rob, Carl, Gina, JD and his half a dozen sweethearts. The next trip will be in December, location is still TBD.
Hopefully we will see you than!
____________________________________________________________________
Have a friend that is interested in trading? Bring him or her in and you both will receive a free month, contact Ben for more info!
____________________________________________________________________
