The Big Picture

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
New Business
More Value 9/30
Trade Theory 10/31
Trading Experts App 12/31

Broad Market Outlook
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.

Macro Rotation Outlook

Cheat Sheet 
Nasdaq new highs should be the theme going into end of year
S&P 500 new highs should be the theme going into end of year
Dow Jones lagging
Mid Caps hold em
Small Caps hold em
China DCA 100
Japan DCA 59
Europe DCA 58
Emerging Markets DCA  43
India DCA 36
Russia DCA 20.55
10 Year 3% flagging
Bond's basing
USD settling out
Oil flagging
Nasdaq 8400+ 12 Month Target
There is a common saying when it comes to trading, when new highs are made we tend to see newer highs in time, while on the flip side when we see new lows, we tend to see newer lows in time. 
SPY 300+ 12 Month Price Target
Same as above as the SPY chugs along toward our year end target of 300.

 Dow Jones 300+ 12 Month Price Target 
The large caps are still lagging however do not count them out just yet, just takes them a little longer to get up to speed.

MDY Mid Cap Stocks $400+ 12 Month Target
Mid and small caps with textbook bull flags breaking out to new highs, stay in them as long as you can (Billy Madison voice).
IWM Small Caps 200+ 12 Month Target
Mid and small caps with textbook bull flags breaking out to new highs, stay in them as long as you can (Billy Madison voice).
GXC China +$150 12 Month Target
Will DCA 100

EWJ Japan +$85 12 Month Target
Will DCA 59
VGK Europe ETF  $82+ 12 Month Target
Will DCA 58 for now
VWO Emerging Markets +$58 12 Month Target
Will DCA 43
INDA India  +$53 12 Month Target
Will DCA 36 for now
RSX Russia +$30 12 Month Target 
Been DCA'ing down here around $20, next spot could add $20.55

10 Year Treasury Note Yielding 2.85%
 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 2.85% (higher = good)
Right now the 2 year Bill is yielding 2.63%
BND Bond Market
 Bonds basing as it has been as of late, snooze fest.
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 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.
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 new highs
VDE avoiding
VIS grinding back to retest
VCR holding
VNQ holding
VHT holding
VPU needs time


Sensitive -  sectors that have moderate correlations to overall market conditions. 
VGT Tech
 Tech continues to lead us higher, the next major test will be if what was resistance will turn into support. 
VDE Energy
VDE still needs some time after that shakeout.
VIS Industrial
VIS working its way back to retesting those prior highs, just needs time. 

VOX Telecom
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.
Cyclical - sectors that are more sensitive overall market conditions. 
VAW Materials
VAW still in this range, next time back up to 136 will be looking to buy if a buy near 130 is not in the cards. 
VCR Consumer Discretionary
That tail was not real, just broke out to new highs, should see higher prices.
VFH Financials
Fin names still stuck in this correction range if 70 can hold up 72 should be a solid DCA.
 REIT's working there way back to the pre tax change level of 86 should eventually sent this back to 100 down the road.
Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
Was locking in some profit around 141, however will be looking to buy 142 in time.
VHT Healthcare
Monster run in this VHT.

VPU Utilities
Wide range in this VPU and not a sector that your paid to buy the breakout. 


Sub Sector Rotation
Cheat Sheet 
IHE hold your winners
IBB hold your winners
ITA resistance turning into support
XT 4th time was a charm
79 DCA
IHE Pharmaceutical
Hold your winners
IBB Bio Tech 
Hold your winners 
ITA Aerospace & Defense
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 
XT finally took out that major level that we have been watching form all year, time to hold and be patient.
The New Big Picture Set Up

The Big Picture DHR $140+ 12 Month Target
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.
Big Picture Target $140+
Big Picture Entry $104.05
Stop $101.89


The Big Picture's Updated

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.
Holding the DCA for now.
Big Picture Target $260+
Big Picture Entry $216.05
DCA $208.05 filled
Stop $189.95



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. 
Still showing us this upper level of resistance, will add above 47 in time.
Big Picture Target $60+
DCA $47.05
Stop $45.85
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!
He who has a why can always bear any how

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