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We often hear the common objection that it is too costly to learn how to invest properly however most are willing to risk there life savings in the market with no idea what is going on (How I Started). A far costlier decision that if you have any trading experience know first hand is true.
To combat this we are offering you a $1 trial membership for the next month giving you full access to everything we offer our members.
After a month if you like what you are learning you can continue at $99 a month. If you are not learning, all you need to is email us saying you would like to stop and we will stop it, no hoops to jump through. This deal end on Cyber Monday!
Now if you feel that you learned nothing during this trial I will personally refund you 200% of whatever you spent that month! Just so you know we are serious we included our Game Planning program which is where we will begin once you join!
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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
Atlanta Racing Trip Dec 6th-9th
Trade Theory 12/31
Trading Experts App 12/31
Vermont Snowboarding Trip Jan 23rd-27th
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Broad Market Outlook
Just like the last correction the post correction price action looks like Serena and Venus Williams. When the market looks sick banging on resistance where most think we are marching back to highs, we reverse and when we are dropping like a rock back to lows and the world seems to be over, are the times to buy. In this faster and rockier time we need to be looking up after the 3 day pull in's and looking for the exit's after the 3 days rips.
In most sectors that are still very wide ranges that need to settle out however sectors like tech and energy are showing some tighter risk spots where we can get in. As of late you might have noticed my overall focus on the large cap, blue chip names that had be able to navigate these choppy waters with much more easier than the more risky bio tech/momo names.
Some stocks that I will be keeping an eye on this week are AAPL 195, MSFT 110, INTC 49, XOM 79, NKE 76/78, DWDP 60, HD 180, BA 340, GWPH 133, CDNS 47, HPQ 24.50, T 31, BBY 68 and GS 204.
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Macro Rotation Outlook
Cheat Sheet
Nasdaq keep an eye on 7,000
S&P 500 267 to 280 new range
Dow Jones same pattern as last time
Mid Caps 332 to 348 new range
Small Caps 148 to 158 new range
China 92.50 DCA
Japan 55 DCA
Europe 52 DCA
Emerging Markets 40 DCA
India bouncing
Russia range bound
10 Year pulling back to prior breakout level
Bond's new lows
USD hitting resistance
Oil below support
Nasdaq 8400+ 12 Month Target
We almost retested the prior low which was something we were keeping an eye on after we started to play more defensively this week. As we can see this 7,000 area has been a level for some time and one that we should continue to keep an eye on. As the Nasdaq gets into a tighter and tighter range one side will have to take the lead.
SPY 300+ 12 Month Price Target
The SPY has another similar story as it continues to form a tighter range we should expect a breakout in time however just like post last correction, expect a lot of chop and confusion before the hand will be shown.
Dow Jones 300+ 12 Month Price Target
Chart patterns repeat themselves? Just like the last correction the price action is showing almost the same movements.
MDY Mid Cap Stocks $400+ 12 Month Target
Started to pick up some mid caps this week after the pull in, so I wont have to try to buy the 348 level down the road.
IWM Small Caps 200+ 12 Month Target
Small caps are starting to form a new 10 point range and we started to nibble on the way up through 150/152 so we can be ready for the 158 level in time.
GXC China +$150 12 Month Target
China continuing to bang on this wall of overhead resistance however it has recently put in a higher pivot low. Will be looking to add above 92.50
EWJ Japan +$85 12 Month Target
Japan is getting pretty tight down here and we have no problem trying to pick some stock back up after selling out before the correction. Will be looking to add above 55.
VGK Europe ETF $82+ 12 Month Target
Europe is still in this macro downtrend however it is starting to get tight near support where we could still trade the range that it is in or get decent stock for the break. Will be looking to add above 52.
VWO Emerging Markets +$58 12 Month Target
Emerging Markets similar to China, banging on the downtrend line while putting in a higher pivot low. Will be looking to DCA above 40.
INDA India +$53 12 Month Target
Sold most last week however will chill with what I have left as India starts to make a turn after the 17% drop off highs in October.
RSX Russia +$30 12 Month Target
Still range bound however getting tighter. 21.50 is the spot to keep an eye on.
10 Year Treasury Note Yielding 3.07%
As rates continue to rise we will continue to see the 10 year inch higher which crushes bond prices as you will see below the bond market just put in a new low as the 10 year is putting in a new high.
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 3.07% (higher = good)
Right now the 2 year Bill is yielding 2.81%
BND Bond Market
New lows tend to be followed by new lows.
USD
The USD has been having a hard time breaking this area, remember weak dollar good for us.
OIL
As we mentioned last week that we should be expecting a flush of $70 it was quite the quiet flush, this tends to be the low risk spot to add on a turn in the oil names.
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 184 DCA
VDE added off support
VIS still in wide range
VOX still in downtrend
VAW needs time
VCR middle of 15 point range
VFH middle of range
VNQ 81 area resistance
VDC losing steam
VHT wide range
VPU bull flagging at highs
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Sensitive - sectors that have moderate correlations to overall market conditions.
VGT Tech
184 has been a spot in tech that we want to keep an eye on for a DCA.
VDE Energy
Picked up more energy this week after the pull back and got some great stock.
VIS Industrial
Still in a wide 12 point range, needs some time to settle out.
VOX Telecom
Picked up some VOX this week however still in the macro downtrend for almost two years now.
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Cyclical - sectors that are more sensitive overall market conditions.
VAW Materials
Still holding some, materials really got whacked in this last correction and should expect some time needed to mend the wound.
VCR Consumer Discretionary
VCR is in still quite the range of almost 20 points, will need to get it some time to settle out and set up.
VFH Financials
68 will be a spot we want to keep an eye on in time.
VNQ REIT
81 has been a battleground for some time now and a spot we want to keep an eye on.
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Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
Staples went on a solid 12 point run and it seems it might be losing some steam short term however in time the magnet of prior highs seems to be calling its name.
VHT Healthcare
Wide 13 point range where time will be needed to settle out this leader after the easy run it went on for most of the year, time to chop everyone up.
VPU Utilities
The most boring risk off sector bull flagging at highs should be a red flag.
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Longer Term Financial Planning
For most the thought of planning for retirement is almost a joke however having a plan in place to keep you on the road with the proper goals can help make the path toward your first million or tenth much more concrete, realistic and attainable.
We have being doing this already for quite a few Alpha members (Gina, Carl, Adam, Yousef, Valentino, Rich, Sir Wil) and we would be more than willing to put a plan together for you as well. If you would simply DM me and we will get a plan put together.
For all the members who are maxing out there retirement accounts here are the new limits for 2019!
2019 IRA max contribution $6,000
2019 Roth IRA AGI Limit $130,000
2019 401k max contribution $19,000 (no income limit on Roth 401k)
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Sub Sector Rotation
Cheat Sheet
IBB holding
ITA eye on 198
IBB Bio Tech
After bouncing $10 and coming right back yet holding above the low, started to add on the way up.
ITA Aerospace & Defense
Can keep an eye on 198.
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The New Big Picture Set Up
The Big Picture AAPL $300+ 12 Month Target
After pulling back right into a prior resistance level Apple is giving us a change to add back to a name that we have not traded in quite some time. We are still holding onto our 165 stock and have no problem looking to add some 30 points higher.
Big Picture Target $300+
Big Picture Entry $195.05
Stop $184.89
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The Big Picture's Updated
The Big Picture BA $420+ 12 Month Target
Throughout this correction and bounce, BA had 1 shit day and 2 days later recouped the entire days move that was lost. With this name flagging at highs in a major flag, and sneaky buy back, there are so many good things working for it. Can't drop the ball on this one.
BA was not ready for that breakout and that is fine as its giving us a spot to get in at a much better price through 340.
Big Picture Target $420+
Big Picture Entry $370.05/$372.05
DCA $340.05
Stop $328.89
The Big Picture CSCO $60+ 12 Month Target
We took CSCO back in August and you might remember how slow this name moves for a tech name however when the market is rip and dipping hundreds of points a day hanging with your grandfather tends to be just what the doctor prescribed. We can see how this $46 has been a clear line of resistance for CSCO, going forward I will continue to DCA above $46.
The level was 46 however after earnings it has not given us a spot to really get in, for now holding off on any adds.
Big Picture Target $60+
Big Picture Entry $46.05
Stop $45.89
The Big Picture HD $250+ 12 Month Target
Down the road that 3rd times a charm through $208 looks great however we don't want to be buying just than, as HD pulls back into a prior area of support I will be looking to DCA above the $180 area in time.
We took the $180 level for 5% and now its right back under the price that we were buying, giving us another chance to get back in.
Big Picture Target $250+
Big Picture Entry $208.05
DCA 180.05
Stop $167.89
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Trading Experts NYC Meet Up
Awesome to see such a big turn out last night with over 20 members showing up throughout the night bringing along wife's, girlfriends and friends. Great catching up with everyone and we can't wait to see you guys again on the East Coast snowboarding trip in January!
Trading Experts Atlanta Racing Trip
Date Dec 6th to the 9th
Airport Ticker ATL
The Porsche Racing Experience on Friday Dec 7th at 4pm!
We will be flying down to Rob Learn's hood to spend my 28th birthday racing some Porsche's around a private track in Atlanta on Friday December 7th at 4pm. For the Alpha's who live in Atlanta and want to join us in the race on Friday let me know as the price will be much different since housing is not an issue for you.
Trading Experts East Coast Snowboarding Trip
Date January 23rd to 27th (Wednesday to Sunday)
This year we have decided to descend to Vermont for a week long trip of snowboarding, trading and a few other surprises! We have rented a ski on, ski off cabin from January 23rd to the 27th (Wed to Sun). A 3 day pass will be included, if you plan on attending let me know! Also if you need a snowboard or a set up I have a dozen plus Burton snowboards in all sizes.
So far on this trip it will be Shake, myself, Kriss, Colin Rafferty, Darrin, Sam and whispers that Nick Aza might join as well. There is still room for 4 more Alpha Members to attend!
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