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
Trading Experts App waiting on Apple's Green Light
Trade Theory 1/11
Vermont Snowboarding Trip 1/23-27
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Broad Market Outlook
A week ahead most were packing it in saying the market was dead, which was the same thing we started to pick up deals in the major sectors that we have not seen in quite a long time. Now with most sectors, markets and countries ripping off lows, the fear as subsided and guess what? All the pikers that puked due to fear a week ago will be chasing to get back in from the fear of missing out. We see this over and over again and hopefully you too can continue to exploit Mr Markets parlor tricks to push people out of there positions at lows only to dangle them back when they are at highs.
Across the board the market ripped on Friday and you could use any reason why from the news, I personally could careless why, the charts showed us deals and we made money from them. We started off the first week of the new year with a $10,000+ day in the Alpha chat that put the first notch in our $5 million goal for 2019. For the members like Zac who completed his business plan you are in the 3% that will out earn the peers that do not plan there year ahead.
This past week already has given you a glimpse of what is in store for 2019, with the correction and bear market in the rear view there is plenty in store for a profitable and successful 2019. Keep charting, keep saying weekly, keep locking in profit, upping your stops and you will see how you can achieve the goals you set for this year.
From Ben G
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Macro Rotation Outlook
Cheat Sheet
Nasdaq got some room to run
S&P 500 260 next area of resistance
Dow Jones240 next area of resistance
Mid Caps 320 next area of resistance
Small Caps 260 next area of resistance
China double bottom 86 DCA
Japan waking up
Europe needs time
Emerging Markets 40 DCA
India 33.50 bull flag
Russia filled the gap
10 Year 2.66%
Bond working its way to 80
USD flagging
Oil bottoming
Nasdaq
The weak hands always fold at lows, the Nasdaq dropped 23% off all time highs and guess when most people were selling out and raising cash? Last week, guess when the best time to buy was? Last week....
Now can we still take out lows? Most certainly, we spoke about the market needing to get some legs underneath it and if you look at China (GXC) that double bottom is an example of what we are referring to. Right now the questions is "will the low hold?" after the low holds the question turns to a statement, "the low held". Even if we do retest or not, most of the pain is over, the market already dropped 23%, just like on the upside when we want it to keep grinding higher on the way down we think it will never end. It usually does when everyone wants to get out and that happened in the last week of 2018.
SPY
The SPY spun a similar tune dropping 20% off highs and we took full advantage getting stock 2% off lows, a prime example of buying on the way up. The next battle ground will be 260 we should expect continued chop as its very improbably for back to back to back 3% days, embrace the moves the market is giving us.
Dow Jones
Nasdaq dropped 23%, SPY dropped 20%, and the largest companies in the US only dropped 18%, the strongest tend to survive longer than the flasher group. Still a long way from resistance and some solid set ups in the Dow 30 names like CAT, PG, BA, CSCO, INTC and AAPL.
MDY Mid Cap Stocks
Both our recent DCA's are green as the mid caps work its way back to what was prior support that we should expect to turn into resistance for the time being.
IWM Small Caps
Up a quick 8 points off our DCA, will be keeping an eye on the 144 level that was prior support anything vs the low is fair game.
GXC China
This is what we mean by the market getting some legs, now China is no where near out of the woods however if this double bottom holds in a few months we will be saying "damn that was such an easy buy", I will be DCA'ing 86.
EWJ Japan
Japan is starting to wake back up so we will put it on the radar for a spot to add.
VGK Europe ETF
Need to see more basing before we trying to add more to Europe.
VWO Emerging Markets
It has been 4 months see we have added to the Emerging Markets, we added on the downtrend break and the next area that we will look to add will be through $40.
INDA India
India is getting flagging tightly under 33.50, could be worth a nibble through that area.
RSX Russia
After paying its annual dividend, Russia has filled the gap and formed a nice double bottom, back on the radar to add to.
10 Year Treasury Note Yielding 2.66%
We started to get the first warning sign of an inverted yield curve (shorter term rates yielding more than longer term rates). Most people panic at this which is something to take note of. For now the 10 year is still yielding more than the 2 year so we are still good.
10 year Treasury Note 2.66% (higher = good)
2 year Treasury Note 2.49%
BND Bond Market
BND working its way back to the 80 level that it has not seen in quite some time.
USD
The dollar still flagging near highs however looks like it might want to roll lower which would be good for us.
OIL
Oil still smoked however we have not really seen much of a dip in prices at the pump, the current price per barrel is around $1.70 per gallon.
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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 eye on 168 level
VDE eye on 87 level
VIS holding
VOX holding
VAW holding
VCR eye on 155 level
VFH eye on 62/63 area
VNQ eye on 75 level
VDC holding
VHT 162 should be a fight
VPU holding
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Sensitive - sectors that have moderate correlations to overall market conditions.
VGT Tech
We got such a sick DCA $1 off lows now we can sit back as it works its way through this 168 level, 12 points higher than where we were buying.
VDE Energy
Got two solid DCA's near the lows of this move and now we can be patient and it works it way back up in this 36 point range.
VIS Industrial
End of 2018 had all the deals, so far we just need to be patient.
VOX Telecom
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Cyclical - sectors that are more sensitive overall market conditions.
VAW Materials
Picked up some VAW at the end of the week, similar to VOX, been lighten in this sector as I already have a decent allocation.
VCR Consumer Discretionary
Got a great price off lows and now we can be patient as it works its way through the 155 level a dozen points higher from where we were buying.
VFH Financials
VNQ REIT
Picked up some VNQ after it came back into a prior support area, next level to keep an eye on is 75.
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Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
Got a great price in the 2nd DCA, 1st DCA almost near my price, still about 15 points of room from my cost in this range to plan with.
VHT Healthcare
Got a sick price however 162 is going to be a battle ground for sure, super wide 30+ point range with a price 2 points off the low of the range.
VPU Utilities
Still in the upper area of its range, not much of a deal.
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Longer Term Financial Planning
Did you start maxing out your IRA this year? The new limit is $6,000. You also have until April 15th to max out 2018.
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Sub Sector Rotation
Cheat Sheet
IBB holding, great price
ITA needs time
IBB Bio Tech
Up a quick $10 from our buy and running into the prior major support area that could be some trouble, if it clears that 112 is the next major spot, quite hard to buy on this vertical run, glad we were able to sneak in when no one was looking.
ITA Aerospace & Defense
Still in this overall downtrend however trying to poke its head out from under the shadows, sill needs some time.
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The New Big Picture Set Up
The Big Picture PG $118+ 12 Month Target
We took the PG in early December however it just wasn't ready, market got smoked however you would have a hard time knowing if all you owned was PG. If you bought the dead high at worse you were down 9% for all of an hour during this recent bear market. If that isn't relative strength I don't know what is. $94 will be the spot to DCA.
Big Picture Target $118+
Big Picture Entry $94.05
Stop $89.89
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The Big Picture's Updated
The Big Picture MCD $210+ 12 Month Target
MCD is setting back up for 3rd times a charm/the sneaky buy back through 179, we would like to see a little bit more of a consolation in this area as we should not expect the first tickle of this area to just blast through to new highs.
MCD just started to tickle this area however it might now be just quite ready to really get the breakout we are looking for.
Big Picture Target $210+
Big Picture Entry $179.05
Stop $168.89
The Big Picture INTC $57+ 12 Month Target
For how rocky the markets have been, INTC is tightly flagging in this $3 range, Intel is the lower beta tech, old dog, however when the new dogs are getting sent to the pound, someones the old companion is just what we need. Have been trading in and around this range to get a feel for it. Eventually this 49 level should push though to retest highs and works itself down to the road to take that out (3rd times a charm).
If you were the worst trade and bought the doji that we were selling while tech dropped 23%, INTC only dropped for all of 1 day, now it is right back flagging under 48.
Big Picture Target $57+
Big Picture Entry $48.05
Stop $42.89
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.
CSCO followed the market and pulled back 18% off highs back to its lows, however do we care? No, we sold at dead highs and have a full tank of mental capital to try this trade again for the 4th time.
Big Picture Target $60+
Big Picture Entry $44.05
Stop $39.89
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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 at the East Coast snowboarding trip in January!
Trading Experts Atlanta Racing Trip
Was great to catch up with Rob and Mr Moon down in ATL this past weekend. Racing these Porsche's on a private track helped reinforced how much of dumb money I have been all these years whipping my Aston around.
In ATL 100% legal, in NJ that's an easy 3-5.
Rob "I'm going to leave the GT3 with you, take care of my baby"
I got you Rob!
Trading Experts East Coast Snowboarding Trip
Less than 3 weeks away!
Date January 23rd to 27th (Wednesday to Sunday)
Airline Ticket RUT
Cost $1198 by Jan 23rd (including 4 day lift ticket)
So far on this trip it will be Shake, myself, Kriss, Colin Rafferty, Darrin, Sam and whispers that Nick Aza, Gina and Carl might join as well. There is still room for 4 more Alpha Members to attend!
If you can only make it for a few days or just want to come hang let me know as the pricing is much different!
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