The Big Picture Outline
- New Business
- Broad Market Outlook
- Macro Rotation
- Sector Rotation
- Sub Sector Rotation
- New Big Picture Idea
- Updated Big Picture Idea's
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New Business
We have been hard at work continuing to focus on adding Value to your membership with Trading Experts as you have seen lately with Alpha Alerts helping the group avoid missing any major trade set up. To take that a step further and resolve a problem that had came up (missing the alert if you are not actively watching the chat) we are building out an App that will send push to text alerts of each setup right to your phone. Keep an eye out for Trading Experts in the App store very soon!
We are also currently working on two more programs, Trade Theory and More Value. Trade Theory will be focusing more on trading psychology, position sizing and new trading set ups. More Value will continue to build off sales techniques that the small business owner who is boot strapping it can employ with a budget of zero.
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Broad Market Outlook
End of August tends to be the lowest volume trading period of the year due to the fact that Smart Money is off in the Hampton's or overseas. However the market didn't care and 8 months later after a great start of the year, the SPY finally reclaimed a new high, Mid Caps and Small Caps put in new highs, and the Nasdaq is a few points shy from new highs. Clear sign that the markets wants to continue the trend higher, however without any shakeouts, I would expect a slow grind until some fear can shake up the markets.
Now the major headline lately has been the trade war going on between China and the US, however you might have started to yawn or be less interested hearing about the latest update. The market does the same, the initial story carries all the weight than its quickly dismissed as the market looks for the next piece of information. The market is telling us plain and simple it doesn't give a shit about the trade war. During this time of year as most money is being parked, there is not much news to drum up to scare people out of the market. The financial news outlets got desperate enough last week that there spin was Turkey could tank our markets. Come on guys, you can do better than that.
Sector wise we saw Tech break the wedge it was forming to the upside, continue to raise those stops and hold those winners. There are some major levels setting up in Consumer Staples, Financials, Materials, Telecom and Industrials as well. This is a time to be patient with your winners, and quick to cut the stocks that are not moving.
Stock wise there are a few names I will be keeping an eye on for the week ahead INXN 66, BIDU 227/230, BABA 180, BAP 224, WDC 65, AFL 47, IRWD 19, TRV 132, MTD 570, LLL 216, VRTX 179, FWRD 65, BIIB 350, AME 78, ORBK 66, DVMT 96, COL 138, CHFC 59 and ODFL 150.
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Macro Rotation Outlook
Cheat Sheet
Nasdaq 7500 3rd times
S&P 500 new highs
Dow Jones lagging
Mid Caps new highs
Small Caps new highs
China holding
Japan 58 DCA
Europe holding
Emerging Markets 43 DCA
India holding
Russia 20 DCA
10 Year 3% flagging
Bond's basing
USD resistance turning into support
Oil $10 flag
Nasdaq 8400+ 12 Month Target
Third times a charm setting up for 7500 with a tight defined out.
SPY 300+ 12 Month Price Target
SPY officially put in new highs for the year, 5 days of damage took 8 months to repair, however now we have so many lines in the sand to know when were wrong, for now as long as we are above 280 its smooth sailing.
Dow Jones 300+ 12 Month Price Target
The top 30 are still lagging a bit as the heavier companies tend to be a little slower than the lighter names so this is not much of a surprise, above 250 all gucci.
MDY Mid Cap Stocks $400+ 12 Month Target
Our DCA'ing in the mid cap space has finally started to bloom slightly, still no where near out of the woods, for now just chilling as long as MDY stays above 365.
IWM Small Caps 200+ 12 Month Target
Small caps taking out that 170 level on the 4th attempt at the major level of resistance should expect a shorter term move to 176, above 164 in IWM and fair game.
GXC China +$150 12 Month Target
Still a bit weak overseas, got a nice bounce later in the week, for now we would like to see some consolidation for a move through 100.
EWJ Japan +$85 12 Month Target
This 58 DCA is setting up nicely.
VGK Europe ETF $82+ 12 Month Target
Europe has been having some nice swings however you were paid to buy pain not pleasure, for now will need to see this guy settle out a bit before we start buying on the 5th day up.
VWO Emerging Markets +$58 12 Month Target
Waiting on this downtrend break through 43.
INDA India +$53 12 Month Target
India is retesting this prior pivot high however if it can hang out in this range a little longer we should be able to get a nice move through these highs to retest the pre correction highs.
RSX Russia +$30 12 Month Target
20 DCA lining up with the downtrend line.
10 Year Treasury Note Yielding 2.83%
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 2.83% (higher = good)
Right now the 2 year Bill is yielding 2.64%
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
Oil is now starting to flag in a $10 range from $70 to $80 a barrel, could see $90 a barrel down the line.
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.
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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 192 stop
VDE roll over seems in the cards
VIS 147 DCA
VOX 88 DCA
VAW 134 DCA
VCR holding
VFH 72 DCA
VNQ holding
VDC 144 DCA
VHT holding
VPU holding
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Sensitive - sectors that have moderate correlations to overall market conditions.
VGT Tech
Tech broke the rising wedge to the upside which is great for us, however we want to continue to play smart defense and continue to raise our stops so when the flush comes, were the first ones out the door.
VDE Energy
After the breakdown through $100 were seeing this weak bounce, however I would find it hard to believe that we take any any new pivot highs, would expect to see energy roll back over and test some new shorter term lows.
VIS Industrial
VIS battling to take out this 147 that has been resistance since the correction earlier this year, in time we should expect to be adding through i however for now much need to settle for a bit.
VOX Telecom
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Cyclical - sectors that are more sensitive overall market conditions.
VAW Materials
This 134/136 has been a level going back to 2017 and sure we were a bit early however we still have plenty of bullets in the chamber to continue to add for this breakout.
VCR Consumer Discretionary
VCR took out 176 on the 4th attempt at that major level should expect a move to 184 short term.
VFH Financials
Financials are still setting up for this add through 72 as it continues to flag tighter and tighter near this level of resistance.
VNQ REIT
REIT's are working there way back to the major 86 level that goes back to 2014, right now that 86 buy looks like no fun however if you zoom out its A+.
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Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
Consumer Staples working its way back to 144 which is a major level going back to 2016, right now it doesn't look like the most fun to buy up here however big picture wise in time that will be the level to add through.
VHT Healthcare
Healthcare chugging along as it retested the prior high and has continued to grind higher.
VPU Utilities
For such a boring sector funny to see it almost back near highs, still needs time for an actionable add.
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Sub Sector Rotation
Cheat Sheet
WOOD 78 DCA
IHE holding
IBB 118 DCA
ITA holding
XT 38.55 DCA
WOOD
WOOD working its way back to test this 78 level that we were buying in the beginning of the year.
IHE Pharmaceutical
IHE holding above its new highs for now, proper area would be versus the low of the flag.
IBB Bio Tech
Not as fun having to buy $118 up here however the set up is the set up.
ITA Aerospace & Defense
For how much cheer leading we had on this ITA its not too surprising that it didn't get much follow through, remember these are ETF's they take time to move.
XT Exponential Tech
XT knocking on that 38.55 for the 4th time now, in time we should see a move to the mid 40's.
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The New Big Picture Set Up
The Big Picture MMM $260+ 12 Month Target
Was building into a position in this MMM for the last few months and after it filled its gap took the profits and moved on. Recently we are starting to see how its been basing long enough and has already filled its gap where it can start to work its way out of this base and if so should start to trend higher. For now will look to DCA above 208.
Big Picture Target $260+
Big Picture Entry $216.05
DCA $208.05
Stop $189.95
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The Big Picture's Updated
The Big Picture ULTA $315+ 12 Month Target
ULTA has recently came back into an area of support that originally started after an earnings beat in 2016. If you don't know what ULTA is just ask your girlfriend where she goes to spend $300 on shampoo every month and there's a 70% chance her answer will be ULTA. I know because I've spent hours in this store watching women drop car payments on hand soap for there hair.
Added 236 and 240 in ULTA, for now will give it some time to set up for the next DCA and than of course we have the BP level down the road.
Big Picture Target $315+
Big Picture $260
Stop $227.89
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.
Still trying to get on the right side of AXDX, so far took off both of the buys for breakeven, its showing us that it might want to spend a little more time in this 20% range between $20 to $24.
Big Picture Target $48+
Big Picture Entry $30.05
DCA $24.05
Stop $19.95
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.
DCA'ed through $47 however AFL was just not ready yet, will continue to buy $47.
Big Picture Target $60+
DCA $47.05
Stop $45.85
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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!
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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!
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