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

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Broad Market Outlook
After we saw the smallest pull back off highs last week (1.3%) few were about to pack it in, this week we bounced right back as we continue to grind higher in this low volatility grind up, for the SPY and Nasdaq there both inching higher at a healthy 45% degree angle, far from anything parabolic. The mid and small caps continue to flag and breakout however there is a concern as the consolation periods have gone from 6 months to 3 months and now currently just a few weeks. Remember just like a stock as it continues to flag and break higher, the consolation periods get short and shorter as more market participants are willing to join the party. 

Sector wise we are see this in consumer discretionary (think AMZN) remember how difficult it was to buy and hold amazon through $800 or $1,000 and how easy people find it to buy it at a price higher than both those levels combined?  As the consolidations periods get smaller and smaller it is harder to define those areas. We are also seeing this in the tech sector (VGT 196). Now there still are sectors that are setting up such as Materials and Financials (that got a tad beat up this past week). I did hear a few members who were bummed they got shaken out of ITA, however when it comes to ETF's, it tends to be best to buy them and be willing to hold them as there not the same as a $20 bio that could drop 20% on shit volume. Take it as a lesson (ETF's patient)  
As a whole the group did an excellent job this week, few first time comma days, lot of solid gains daily which is great to see. However there still is this over dependence on daily performance (I made 1% yahoo, I lost 1% I suck balls). When it comes to account performance Shake and Myself review it on a quarterly and monthly basis. Day to day is too zoomed in that tends to trip you up more than its beneficial. The bigger focus is on having your money work for you (holding your winners) and trimming the names that are not moving in your favor.  
Stock wise I will be keeping an eye on ANET 275, KORS 74, SIVB 330, CARA 22, BLK 480, PRU 100, WRK 56, BRKR 36, NDAQ 72, GS 232, JPM 116, BOLD 42, AXDX 22, CE 114, CBMG 21 and REGN 400.


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Macro Rotation Outlook

Cheat Sheet 
Nasdaq grinding higher
S&P 500 grinding higher
Dow Jones lagging
Mid Caps flagging
Small Caps flagging
China holding
Japan holding
Europe holding
Emerging Markets DCA 42
India basing
Russia basing
10 Year 3% flagging
Bond's basing
USD settling out
Oil flagging
Nasdaq 8400+ 12 Month Target
Nasdaq caught its footing this week and has started to bounce back, we should continue to expect this range bounce grind higher, nothing out of the usual or parabolic about the moves lately just need to stay the course. 
 
SPY 300+ 12 Month Price Target
The SPY is the same story, few days up, few days down just grinding higher on a 45% angle, just keep upping your stops and ride the tide higher.


 Dow Jones 300+ 12 Month Price Target 
 
The large caps are still lagging behind all the major markets however there are still some opportunities in the top 30.

MDY Mid Cap Stocks $400+ 12 Month Target
 
Mid caps flagging again, on repeat healthy market action.
 
IWM Small Caps 200+ 12 Month Target
 
Small caps same as Mid Caps forming a new flag at high, however need to point out how much smaller the consolations are becoming.
GXC China +$150 12 Month Target
China has been getting beat up from the geo political talk, could careless, I will take the deals now and in 6 months when the fear headlines are gone I will have stock from a great price.
EWJ Japan +$85 12 Month Target
 
Got a nice DCA in Japan on tight risk that held the triple bottom now we need to see a pivot high get taken out soon if not, expect that low to get smoked.
VGK Europe ETF  $82+ 12 Month Target
Little nibble of an add this week down here after a higher low held, same as Japan we need to see a pivot high get taken out to break the overall downtrend.
 
VWO Emerging Markets +$58 12 Month Target
Emerging markets still in this down trend that it wants to hold perfectly, as usual will need some time to base out before expecting any feasty moves higher.
INDA India  +$53 12 Month Target
India is starting to get a little interesting, it broke the overall downtrend that we can is still forming in Japan, China, Europe and the Emerging Markets, now India didn't just break and retest highs (close no cigars) however it is starting to base in a solid range, now remember we don't want to be buying the breakout, were paid to buy up near support so holding for now.
 
RSX Russia +$30 12 Month Target 
 Russia still trading similar to India (pre breakout) and Emerging Markets hugging this down trend line however now it seems as if it wants to start basing near this $20 area. In time should be a good place to start adding after we can confirm a higher low pivot.

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 2.78%
BND Bond Market
Bond market still a snooze feast, should expect some lower prices as rates continue to rise.
USD
 
The USD starting to hold its ground a bit near this prior resistance level.
 
OIL 
 
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.
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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 line in the sand 196
VDE holding
VIS holding
VOX DCA 87/88
VAW DCA 135/136
VCR line in the sand 175
VFH DCA 72
VNQ holding
VDC DCA 144
VHT holding
VPU better opp's out there

 

 
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Sensitive -  sectors that have moderate correlations to overall market conditions. 
VGT Tech
 
Super tight, below $196 could get ugly.
 
 
 
VDE Energy
 Energy still in this range with oil stuck in a $10 range the same should be expected here, there are some deals out there individual name wise that pay a solid dividend just have to be willing to park em for a bit.
 
VIS Industrial
 Industrials lagging similar to the DOW as it works its way back to prior highs, if its anything like healthcare than we should continue to see higher prices in time.

 
VOX Telecom
 
Started to pick some more up this week as telecom continues to fight with this downtrend line for the last two years (I know I sound like a broken record) however as it continues to base and start to put in higher lows, we might just be peaking out head out getting closer to a change in trend that this sector has not seen in years. Have been picking up more stock in T lately has VZ the value buy has passed for now.
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Cyclical - sectors that are more sensitive overall market conditions. 
VAW Materials
Materials just keep getting tighter and tighter, we picked some up last week and can continue to add above 135/136 eventually in time we should see new highs however that could wait until 2019. 
 
VCR Consumer Discretionary
Similar to the SPY and Nasdaq just grinding higher, the tighter flag is something to keep an eye on, as markets, sectors or stocks continue to trade higher, the consolidation periods get tighter and tighter as more market participants are looking to join the party, just think of Amazon how easy it is for people to buy $1700 without a care in the world yet trying to buy $1,000 was a tough trade. Not saying don't ride the easy tide up, just have to be aware that its always beautiful out before the storm comes and it arrives in a flash.
 
VFH Financials
Financials name wise got pretty beat up last week from what I saw while the ETF held up quite well considering the blood shed in some individual names. Damn you CMA, jk, shake the weak hands so we can bust that $100 level in a month. 72 is still the spot that I will be looking to add. 
 
VNQ REIT
 
 REIT's still grinding higher back towards the major level that it ticked right before congress changed the tax law that boned this sector.
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Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
144 in time should be a solid DCA to continue the move back towards prior highs.
 
VHT Healthcare
Hold your winners.


VPU Utilities
 Last week I started to nibble a bit in this sector picking up some ED and SRE as some defensive plays however the market is showing us it wants to grind higher and if so that does not mean I need to stay long the slow grind of utilities. More fruitful opportunities out there.

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Sub Sector Rotation
Cheat Sheet 
 
 
IBB DCA 120
ITA Target 227
XT needs time
 
 
 
 
IBB Bio Tech 
 120 in time will be a solid DCA
ITA Aerospace & Defense
 For some I heard that you were getting stopped out and now bumped, when trading an ETF, few things, they move slower % wise than a regular stock, short term 5-10% moves are huge, yearly 30-50% gain is a monster win, with that being said, its very difficult to be perfect with a stop, if you are putting money into an ETF, it pays to buy and hold, if it pulls in a few percent it tends to not really be the end of the world. Now that it is working in our favor we should see a move towards the 227 area for now if your price is around $204 that would be your out, you sell ETF's for profit or worse case breakeven.

XT Exponential Tech 
 
Still dancing around this 38.50 area however still does not seem ready to really leave this area.

 
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The New Big Picture Set Up
The Big Picture CARA $40+ 12 Month Target
What a beauty aint she? Now sure this isn't a hard level as $22 has been tested and broke a few times prior, however its back here for the 6th time over the last 4 years. Now lets take a closer look. 
June it gaps up right towards that level, sells off hard (no big surprised after a 30% gap up) than it climbs right back however nope that $22 seller is still there, than over the next few months its fades and than climbs right back to $22, yet the seller is still there holding the stock down. Now is it going to break $22 Monday morning at 9:31 and never look back? Probably not, that's why we can DCA $22 if it does, hold it, if it ticks it and is still not ready, than you have plenty of ammo to add later.
Big Picture Target $40+
Big Picture Entry $22.05
Stop $20.89
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The Big Picture's Updated

 

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.
With the banks weak last week, SIVB barely noticed, still flagging and will add through $330.
Big Picture Target $400+
Big Picture Entry $330.05
Stop $311.89

 

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.
So we caught our textbook short term move higher and it was smart to lock some in on Friday, how this is where DHR will show its hand during this first pull back post breakout, can it hold above $104 where we could expect a stronger leg 2 or was this all we can squeeze out of the name. For now a breakeven stop makes sense.
Big Picture Target $140+
Big Picture Entry $104.05
Stop $103.89
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. 
Hugging resistance to a T, once this resistance level gets takeout, time to sit on our hands, for now still looks good.
Big Picture Target $60+
DCA $47.05
Stop $45.45
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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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The easy things to do, are also the things easy not to do

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