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 - resubmitted for approval for the 9th time
Turks and Caicos Trip 3/21st-24th
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Broad Market Outlook
We saw another great week in the market as it grinded its way back to the previous high before our last correction. World was ending to world is going to the moon and we aren't even a month into the year. As we continue to hammer down about this range bound market, there is plenty of money to be made outside the red zone. The SPY is in a 50 point range from highs to lows and it is smack right in the dead middle of said range. 230-240 were the value buys, 250-270 is right in the middle of the range and 270 to 290 is expensive stock.
We want to be finding deals in the value areas, upping stops in the middle of the range, and selling stock when the market gets expensive. You guys did an amazing job this week locking in profits that put the Alpha chat +$200,000 locked in so far, with $4.8 mil to go.
As we continue this sharp bounce of lows, we want to keep riding the wave higher, however having our stops in so when the wave crashes as it always does, we are the first ones on shore.
From Ben G
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Macro Rotation Outlook
Cheat Sheet
Nasdaq 6600 stop
S&P 500 260 stop
Dow Jones 240 stop
Mid Caps 320 stop
Small Caps 142 stop
China 82 stop
Japan avoiding
Europe avoiding
Emerging Markets holding
India 33 DCA
Russia avoiding
10 Year 2.75%
Bond working its way to the 80 level
USD range bound
Oil basing under 64
Nasdaq
What do we want? A hard break of this downtrend right? Will we get it? Probably not, for now 6600 is the line in the sand.
SPY
Spy working its way back toward the prior pivot before the breakdown, the people who were panicking and selling SPY 240 will be the same ones to come chase 270, real out is vs 260 for now.
Dow Jones
Month later looks like we will be testing the downtrend line that seemed so far out of reach a few weeks ago.
MDY Mid Cap Stocks
As the mid caps work there way back to 345, a stop vs 320 can keep us in the game.
IWM Small Caps
Similar to a lot of the other major markets, small caps are heading back to the resistance area, as much as we want a hard break, I would expect a fizzle.
GXC China
China so far finding its footing and poking its head out of the downtrend it has been in for quite some time, full stop is vs 82 for now.
EWJ Japan
Nice bounce off lows, still avoiding for now.
VGK Europe ETF
VWO Emerging Markets
Emerging Markets as we can see broke the downtrend then started to base, for Japan and Europe, we want to look for the same, once a base can start to form than we can look to add.
INDA India
Getting tighter and tighter under this 33 level looking ripe for a DCA.
RSX Russia
Russia still in this range with 21.50 being the level to keep an eye on.
10 Year Treasury Note Yielding 2.75%
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 2.75% (higher = good)
2 year Treasury Note 2.61%
BND Bond Market
BND still working its way towards the 80 level.
USD
The dollar found a pivot at 95 as it continues to trade in a tight range.
OIL
Oil started to get some legs after the disaster into the end of 2018, for now 64 will be a spot however this is only the retest and as we know we want to look for 3rd times a charm.
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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 172 Stop
VDE 82 Stop
VIS 127 Stop
VOX 78 Stop
VAW 112 Stop
VCR 157 Stop
VFH 64 Stop
VNQ 78 Stop
VDC h'ing over soon 134 Stop
VHT h'ing over soon 166 Stop
VPU avoiding
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Sensitive - sectors that have moderate correlations to overall market conditions.
VGT Tech
Similar to the large and small caps running into an area of resistance, just when it looks so easy to buy, tends to be the worst time.
VDE Energy
Nice flag forming, a stop vs 82 makes sense if you were buying 10 points lower.
VIS Industrial
As it continues to work its way towards 140 lets protect the downside with a stop vs 127 if you were buying 15 points ago.
VOX Telecom
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Cyclical - sectors that are more sensitive overall market conditions.
VAW Materials
Materials started the breakdown and have been a bit behind on the bounce, have a stop vs 112 just in case.
VCR Consumer Discretionary
157 is a great spot to protect profits after the 20 point bounce from our last add.
VFH Financials
VNQ REIT
If you were more patient than I was a stop below 78 should keep you in for the retest of prior highs.
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Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
Looks like an "h" in the making, 134 stop for the roll over.
VHT Healthcare
Looks like an "h" in the making, 166 stop for the roll over.
VPU Utilities
Still bouncing around in a range, avoiding for now.
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Sub Sector Rotation
Cheat Sheet
IBB 106 Stop
IBB Bio Tech
Flagging nicely under 3rd times a charm 112 vs 106.
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The New Big Picture Set Up
The Big Picture AAPL $230+ 12 Month Target
We have been slowly DCA'ing into wall street most loved name, as of late most will complain about its pull back off all time highs, this pull back is all par for the course as we have seen Apple do this number times. As of late this 20 point range seems to be finding its footing and after earnings are out of the way we should be able to get stock through 160 for an eventually move back to highs.
Big Picture Target $230+
Big Picture Entry $160.05 after ER
Stop $139.89
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The Big Picture's Updated
The Big Picture CDNS $56+ 12 Month Target
So we are shifting gears away from the large cap names and taking a look at CDNS that has been setting up through this 47 level since July. Now this is by no means a cake walk 47 buy as it has ran basically in a straight line up from 40. Will start light and if it wants to blast 47 and never look back even better, if it wants to start setting out we should have not problem adding in time.
As we mentioned we did not want to be buying CDNS after a $7 run up, after starting to flag a bit around risk is much tighter at $2 risk per share.
Big Picture Target $56+
Big Picture Entry $47.05
Stop $44.89
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.
PG had strong earnings and more importantly great future guidance which is what smart money wants to hear about. Still in a range that would have to be given to at least pre earnings low with 97 being the real area we want to be buying in time.
Big Picture Target $118+
Big Picture Entry $97.05
Stop $89.89
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).
Perfect example of why we don't gamble on earnings, how perfect did INTC close prior to earnings only to gap it lower. 50 is still the major area in this base.
Big Picture Target $57+
Big Picture Entry $50.05
Stop $47.89
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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.
Trading Experts Vermont Snowboarding Trip
Trading Experts Turks and Caicos Trip
For our first beach trip of the year we will be heading back to Turks and Caicos, the last trip was too much fun and the beaches were the best that we have seen. We will be renting an ocean front villa, we will be heading out to the sunken ship and we have a few other tricks up our sleeves.
This trip we are going to try to keep it a bit tighter aiming for 10 Alpha members, air fair is dirt cheap right now with tickets out of Miami for under $200. If you are considering attending let me know as I can help you find deals on your flights. The cost will be $1,498 per member that will cover all the activities, housing, food, drinks, and everything else once you land in Turks.
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