The Big Picture

This year has been one that continues to stump the market, start of the new year expecting a sell off for tax harvesting, market goes on best run in years. Followed by the first correction that we have seen in over two years that also caught virtually everyone with there pants down (expect for us).

New highs? No way, the party is over folks (what most figured) however Mr Market again said nope your wrong as we marched back to new highs on the year.

Now we are here (continuing to confuse more of the market). Now the last magic trick the market pulled was August, August is when all the smart money is in the Hampton's or  Mykonos. We tend to see greater downside selling pressure during these last few weeks in August as the heavy hitters are dipping there toes in the sand somewhere. However guess what, no downside, all upside for the guys putting risk on.

Now that the major markets have consolidated for 8 months (our last major consolation was 2 years and before that 13 years). Have you every seen a stock flagging for decades, breakout, flag for years, breakout, flag for months, breakout, than flag for 3 days and reverse half the move before you can blink? The market is no different, as the consolation periods get smaller and smaller on the way up as more people impatiently try to climb in. 

For us this is great because we can read a chart and see when resistance is breaking or support. We should continue to see higher prices as the next fear headlines continue to get pumped out like those "the market is going to end in 5 hours and 4 seconds, are you prepared?"

During this time, you want to focus on getting rid of chasing stocks and this fomo excuse that seems to keep coming up. We are riding an easy roller coaster up however if you keep your hands up before the drop we cant catch you. If you are looking to buy a stock that has gone up 15 days in a row and stopped trading higher, the move is over, that 15 min bull flag is nothing but a mirage to take your money as you rationalize the loss with a tight risk stop. 

Broadly I will continue to lock in gains in our backyard (US wise) and continue to put money to work overseas as that's where the value buys are. Sector wise VOX 88 in time is about as A+ as a sector set up can get, while there are still some decent set ups in the Financials and Materials sectors.  

Some stocks that I will be keeping an eye on this week are DHR, CCI, ABBV, BABA, CMA, DIS, FGEN, INXN, DECK, NDAQ, IBM, CHR, TROW, CHFC, LLL, NTR, SON, ORBK.

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Will DCA 100

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.

This is setting up more and more for an A+ macro breakout, the downtrend has started to form into a year long base where now we can see higher lows with a very defined level, through 88 we should see a move to retest highs within a year.

Monster run in this VHT.

79 DCA

Hold your winners

IBB Bio Tech 

Hold your winners 

ITA coming back to retest and see if resistance can turn into support as long as its above 200 all fair game. 

XT Exponential Tech 

5 times DHR has rejected $104, is this the time it goes? That is anyone guess however the probabilities are a bit more in our favor are these continued attempted, lets just be real with ourselves. We can put on a tight risk buy on $2 here if she is ready.