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
The market pulled back a mind boggling 1.3% this week after going on a 13% run off lows since April and the overall mood was as if we were in the great depression towards the end of the week. As traders and investors we want to focus on ambitious long term goals while setting more realistic (still ambitious) shorter term goals. One might have a goal to grow there account to $10 million by there 40, while having a shorter term goal to make 10% in a year or locking in there first comma day. With 200 trading days in the year, if you expect to be up 1% every single day, you might also still believe Santa Claus is real. Markets move up and down every day B (Camron voice) if your down 1% and boo hoo'ing, stop acting like a baby. Now if your down 10% in a day and the market is ragging, than your fucking something up and we need to figure it out quickly (don't bleed in silence). 
Ask any active trader and most will confirm that there tends to be 20% of the year where they make all there money. Meaning that 2 months are where they clean up while the other 10 months its more practicing, shadow boxing and staying in tune with the markets flows as no one know when those hot times come and go. This is referred to this as trading in the zone, and there are times when we are On and times when we are Off. You have to be honest with yourself to know when you are which. This entire year as each month has gone by, it has gotten easier and easier to avoid any real blood baths and what happens? People get lazy, chart work gets sloppy, game planning becomes simply buy and sell higher. The market lures you in with this false sense of confidence since it has bailed us out all year. They think the party will go on forever. Think of ANET, how much everyone was pumped that ANET was being added to the SPY and dreams of how it was going to run another 50 points yet WBA showed us that it faded the entire move after being added to the DOW a few months back. 
As we start getting into the tail end of 2018 there are still plenty of sectors out there ready to be bought as most major markets are sailing into new high territories (and should continue this trend), Telecom is still setting up, while Materials and Financials are showing the tightest ranges that have been lagging some of the sector leaders like Tech and Healthcare.
Stock wise I will be keeping an eye on SIVB, INXN, BAP, CMA, VMC, ABBV, DVMT, JPM, NDAQ, NTRS, APH, AME, CE, BLK, IBM, DECK, LLL and BA.

Macro Rotation Outlook

Cheat Sheet 
Nasdaq range bound
S&P 500 resistance retest
Dow Jones lagging
Mid Caps resistance retest
Small Caps resistance retest
China 96 DCA
Japan 56.50 DCA
Europe 55.50 DCA
Emerging Markets 41 DCA
India 35 DCA
Russia new lows
10 Year 3% flagging
Bond's basing
USD settling out
Oil flagging
Nasdaq 8400+ 12 Month Target
We have been in this range as the Nasdaq worked its way back to pre correction highs, however as we continue to bounce up and down in this defined range, the more obvious it becomes the less likely that support or resistance will hold.
SPY 300+ 12 Month Price Target
The SPY took out the prior high however not too surprised at the sparkler breakout as it was only the retest with no real time to consolidate.

 Dow Jones 300+ 12 Month Price Target 
The DOW is still lagging and with the other major markets a tad over heated, could find some decent buys in the DOW 30.

MDY Mid Cap Stocks $400+ 12 Month Target
Mid Caps followed there little brother the Small Caps in this defined breakout however when buying an entire cap of stocks hard to expect those feasty moves, took the gains as the cash can be put to better use elsewhere.
IWM Small Caps 200+ 12 Month Target
Just like there big brother Mid Caps a text book flag however when your buying hundreds of stocks, hard to expect a feasty breakout.
GXC China +$150 12 Month Target
China has been getting banged up lately and as of late its starting to show signs of a double bottom, if this $92 does not hold could expect a $10 drop from here into the low $80s if it holds and can take out the prior pivot high, could start to work its way back to highs. For now I will DCA 96.

EWJ Japan +$85 12 Month Target
EWJ is showing more likely signs of a breakdown as its now the 3rd retest of support with lower highs, such a tight risk DCA down here however odds is that it flushes $56.50. Will still nibble $57 DCA to be consistent however I am aware of what is most likely around the corner.
VGK Europe ETF  $82+ 12 Month Target
VGK like China seems as if it wants to retest or push new lows, above $55.50 will DCA.
VWO Emerging Markets +$58 12 Month Target
VWO still not ready for that downtrend break however much easier to DCA $41 than having to be perfect buying $43.
INDA India  +$53 12 Month Target
India setting up for a nice $35 breakout down the road.
RSX Russia +$30 12 Month Target 
Russia showing us that when a sector or country starting banging on lows that eventually that's just what you get.

10 Year Treasury Note Yielding 2.94%
 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 2.94% (higher = good)
Right now the 2 year Bill is yielding 2.7%
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. 
With the Saudi's trying there best to market this Aramco IPO, there has been whispers that there goal is to hold oil in this $10 range, when the guys who sell the oil say it, tends to be something to listen to. 
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 retest
VDE avoid
VCR resistance retest
VNQ holding
VDC 142 light DCA
VHT holding
VPU holding


Sensitive -  sectors that have moderate correlations to overall market conditions. 
VGT Tech
The rising wedge did breakout to the upside however does resistance turn into support or does the real breakout of this pattern start to show its face? Given the overall weaknesses in some of the leaders in FAANG, could be a warning sign to take note of. Remember just when things look perfect are right before it gets real shitty. 
VDE Energy
With the Saudi's wanting to keep oil in a $10 range would not expect much of a feast out of VDE for a bit, and if that means we can get some cheap stock in a bit, all for it.
VIS Industrial
Industrial's still setting up nicely to take out the prior pivot highs, lets let it settle out a bit so we can bust through these levels with some force.

VOX Telecom
Still battling with this 2 year down trend and a few penny's kept us out of the $88 DCA, now we can get much more reasonable stock down here a few dollars cheaper. When this does finally go, hand sitting time.
Cyclical - sectors that are more sensitive overall market conditions. 
VAW Materials
Material's still consolidating tighter and tighter, sure could we nibble $134, however probably best to give it the time so we can just buy $136 when its ready to go.
VCR Consumer Discretionary
You might be starting to notice that when the markets or sectors set up with this textbook patterns the breakouts tend to lack a lot of juice. However they are spots where you can park money and sleep at night.
VFH Financials
Financial's are starting to look better as the weeks go on and they continue to battle with this $72 area.
REIT's still grinding towards the major 86 level.
Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
Staples after being in the dog shed for most of the year are starting to battle back with the $142/$144 pivot high areas. Could pick some back up that we sold recently as it continues to work its way back to highs.
VHT Healthcare
Hold Ya Winners

VPU Utilities
Same as REIT's grinding higher, picked up some ED last week and another Utility name as the market seems a tad bit extended.


Sub Sector Rotation
Cheat Sheet 
IHE holding
IBB 120 DCA in time
ITA sitting on hands
XT 38.55 DCA
Wood showing us the clear line of resistance and our prior two DCA's giving us a great price, can add $78, real DCA $79.
IHE Pharmaceutical
Took out highs, now you need to set your stop and forget about it for a while as it works itself higher.
IBB Bio Tech 
Too early too fast, however in time that $120 buy will not be one to miss.
ITA Aerospace & Defense
Set your stop at the base of the flag and lets come back in 3 months when its 10%+ higher.

XT Exponential Tech 
With some weakness in tech even a year long flag cant hold itself up, no biggie, there will always be another time to DCA $38.55.

The New Big Picture Set Up
The Big Picture SIVB $400+ 12 Month Target
SIVB is a financial name that has been flagging for 5 months at highs, last week it did try to take out new highs, however it was not quite ready which tends to be a theme we run into. Now it didn't get smoked or sell off hard, just started to flagging in a 2% range.
Big Picture Target $400+
Big Picture Entry $328.05
Stop $311.89


The Big Picture's Updated


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.
DHR finally broke $104 however not with much fireworks just yet.
Big Picture Target $140+
Big Picture Entry $104.05
Stop $101.89
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. 
Nice defined flag however we can see how its still battling with resistance.
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!

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