The Big Picture Outline
- Financial Planning
- Broad Market Outlook
- Macro Rotation
- Sector Rotation
- Sub Sector Rotation
- New Big Picture Idea
- Updated Big Picture Idea's
______________________________
Financial Planning
Take any hundred people at the start of their working careers and follow them for 40 years until they reach retirement age, and here's what you'll find, according to the Social Security Administration:
1 will be wealthy, 4 will be financially secure, 5 will continue to work because they need to, 36 will have already died, and 54 will be broke living off Social Security and help from family. 5% are successful while 95% are unsuccessful. Care to guess which group had financial planning?
Clients pay thousands of dollars a year to have a financial plan run for them at my investment bank, we include this benefit to you for no cost. If you would like us to put a plan together for you and your family so you can get closer to being in the 5%, shoot me a message on GroupMe saying "planning" and we will show you the simple steps to get you to your first your first million.
______________________________
Broad Market Outlook
We are in the chop, at highs wondering are we flagging for the next rip or at the peak of the roller coaster where its that brief pause that feels like an eternity before the free fall.
Now when we shine the spotlight on individual names and away from the broad market, it was a monstrous week, Cris closed over 100% on the year and had his best day up over $3,000 with back to back to back comma days. I don't really know what a triple double is in basketball however if there was one for trading, Cris picked one up last week.
Kainoa also had a monster week, both Kainoa and Cris made a big chunk of their money in BYND. Now the most impressive thing about their trades were not the PnL, it was their human psychology behind the trades, they sold when they were high fiving about the trade. Hearing Cris saying I know this is my high five sell signal to get out, was something only a real trader can do. He was able to use his emotions to his advantage and take his chips off the table, while the gambler would have pressed on and lost it.
This is why it is easier to focus on what you are in and less on what the market is doing. The market is going to do what it wants and it will always look so easy after the fact. Worrying about what its going to do is just a waste of time and energy. I have not read a tweet, an article, or watched a second of CNBC's coverage of this from the start because the facts are there, most just read the headlines.
Right now the market is headline driver with this trade war drama, that everyone is freaking out about because "trade" and "war" are sexy. Let me grandma in a night gown this down for you. We account for 4% of China's GDP, aka we are the customer, what we get from China amounts to less than 1% (.87% to be exact) of our GDP. If we completely stopped doing business with China, full stop, our overall GDP would drop a mere 1%, a nothing move, hell the SPY moves that amount daily. What is that old saying? The customer is always right, Trump hate him or love him, he is the buyer and the buyer is always right.
You can either be the trader at 3:30pm on a Friday nervous about whatever glued to the SPY wondering why its dropping $1 or you can keep it simple, scan charts, find setups, game plan and execute. For myself, the latter is much easier. Care less about your opinion on matters that you have no real input and focus on what actually matters.
So many names on the radar for the week ahead, CMG 722, UHAL 400, CHE 336, IDXX 255, TECH 204, RTN 180, SAGE 172, MKC 157, ALXN 140, FIVE 130, PFPT 130, DXCM 124, ATHM 120, NEWR 108, VFC 96, QYLS 96, TMK 89, MRK 80, DFS 82, DNKN 77, FMC 80, ANIP 74, LNG 70, RP 66, EXPO 58, FL 58, VOYA 55, IP 48, ELAN 34, ORLY 360, DRI 122, LLY 118, FMX 100, INTC 46.
______________________________
Goals Exceeded
Cris M 104% return in the last year
Cris M Best Day $3,000+
Cris M 3 Comma Days
Adam Rav $20k Day
Sir Wil Comma Day
Kainoa Comma Day
T Harambe up 27% this month
Lewis Steen adding a new member to the family!
Sam Perrelli graduating college!
Goals on the Radar
Nick Neef Comma Day
______________________________
Macro Rotation Outlook
Cheat Sheet
Nasdaq 7200 stop
S&P 500 280 stop
Dow Jones 252 stop
Mid Caps 335 stop
Small Caps 148 stop
China 82 real out
Japan 53 stop
Europe 53 stop
Emerging Markets 36 real out
India 36 real level
Russia 22 DCA
Bonds heading to highs
10 Year at 2.39%
USD near highs
Oil above 68 should see move towards retest of highs
Nasdaq
The market does not usually fall in a straight line, it bounces and dips just enough to make it look safe, we can see how the first wave down pulled into prior support and bounced, now here is the key, once or if we retest that low, we are heading lower.
Below 7300 raise some cash.
SPY
280 is the line in the sand, sure we can flag and chop around up here however that is what everyone wants, and the market is great at giving us what we don't want. What would that be? Breaking 280 and rolling lower. Accept that and move onto the next task, we were given the best quarter in a decade, should be ok with a much harder quarter to follow.
Below 280 raise cash.
Dow Jones
Big Picture wise the large caps will be the first to breakout higher, 268 has already tested 3rd times a charm, and we know how major markets take more attempts at highs and the DOW is leading that race so far. Support of 252 still looks strong however if it breaks its not the end of the world and would actually be good for us longer term, the sick breakouts are the ones no one wants to buy and buying 268 looks so easy right now, too easy.
The large caps will lead us higher down the road, for now 252 is the line in the sand to free up some money in the large cap space.
MDY Mid Cap Stocks
We are starting to see more of the roll over, we saw the first pull back, with a 2 day bounce that rolled right over, we should be expecting to see a test of 335 this week.
IWM Small Caps
Small caps short term look like they want to retest support at 148, longer term 160 looks absoulty amazing.
GXC China
EWJ Japan
Still flagging in a few dollar range however it does seem like a flush of support is in the cards, possibly a retest of lows.
VGK Europe
Europe trading pretty text book, trying to form higher pivot lows to keep this uptrend in tact. Shorter term we should expect to see a break of 53.
VWO Emerging Markets
Retesting lows would not be the end of the world and if it did, it would help to continue to form this large base between 36 and 44.
INDA India
Wild wild west over in India where corrections and bear markets happen weekly, 7 range between 29 and 36 in this stock, as much as 36 is a sick level to break, might be easier to get stock at more affordable prices.
RSX Russia
Russia keeps looking better and better that 22 break in time.
BND Bond Market
Bonds are inching higher, we should see new highs in time which is a whopping $1 higher.
10 Year Treasury Note Yielding 2.39%
3 Month Treasury 2.39%
2 Year Treasury 2.20%
5 Year Treasury 2.17%
10 Year Treasury 2.39%
30 Year Treasury 2.82%
USD
Still flagging.
OIL
Oil trying to hold onto this uptrend with everything its got.
|
|
VDE Energy
Energy is bear flagging, however if it is actually basing, I will DCA above 88.
VIS Industrial
136 stop.
VOX Telecom
88 is the battle ground which has been for quite some time, now that it is out of the downtrend and can start basing, that will be the level to keep an eye on.
______________________________
Cyclical - sectors that are more sensitive overall market conditions.
VAW Materials
118 is the out however I will be looking to DCA abve 122.
VCR Consumer Discretionary
172 stop.
VFH Financials
69 has been a major area of resistance, for now seems like an avoid until it can take that level out.
VNQ REIT
84 stop, set and forget.
______________________________
Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
145 stop, set and forget.
VHT Healthcare
Still wedging, 163 stop.
VPU Utilities
126 stop, set and forget.
______________________________
Sub Sector Rotation
Cheat Sheet
IBB 100 break in the cards
IBB Bio Tech
IBB looks like it wants to test the sub $100 levels, maybe even retest lows.
______________________________
The New Big Picture Set Up
The Big Picture FMX $126+ 12 Month Target
On Friday, after scanning a 1,000+ charts, I stumbled upon FMX, that has been basing for 6 years under the magically $100 level, last week it ticked $100 and pulled back. So far this has been the smallest pull back only a mere 4 dollars. I will be buying above $100 vs $96 to start, however I will be quickly upping this to breakeven, the goal will be immediate follow through, this name has been dancing around $100 for 6 years, it could easily do the same for another year.
If we do get follow through and I sell anywhere less than 126 this trade would be a fail, if it breaks lets hold this sucker for the retest.
Big Picture Target $126+
Big Picture Entry $100.05
Stop $95.89
______________________________
The Big Picture's Updated
The Big Picture QSR $100+ 12 Month Target
Back in 2017 QSR was a name that we swung very well and moved on for all of last year, after a year and half it is finally back to its prior high, a perfect example of how long stocks can take to get back to their prior highs. Above $68 there is no resistance in this name to hold it back.
Reminding me of YUMC as it got back to the prior level, QSR does not seem ready, will be upping the stop vs 67.
Big Picture Target $100+
Big Picture Entry $68.05
Stop $66.89
The Big Picture PGR $95+ 12 Month Target
PGR has gone on a crazy run this year and has started to flag exactly how we would like to see it, I started a feeler position to keep an eye on it, and will look to buy through 74.
Great sneaky buy back, we can see there is a seller at 78.50, tight stop so we can take this set up for the 2nd time.
Big Picture Target $95+
Big Picture Entry $74.05
Stop $76.89
The Big Picture CDNS $54+ 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.
Big Picture Target of $54 exceeded
Stop $61.89
______________________________
Trading Experts Miami/Bimini Bahamas
We might be Trading Experts, however we are no photo experts, this was the only photo we took the whole weekend, there were a few funny highlights from the trip last week:
Kriss, Heaven, Capt Joe and Skender all won money at the casino, which was awesome to see them all actually leave with more money than they came with.
Getting to South Bimini required a bit of traveling taking ferry to ferry and having golf carts on both island, however the views on that private island especially at night were simply unbelievable.
Our goal was to see one of the sunken ships that was about 5 miles off the coast, after talking with a few locals, our friend Coconut Joe said he had one of the best captain on the island for a price only a fraction of what we have paid in the past to charter boats in Exuma and Turks. I didn't bat an eye as he mentions the boat is not "that pretty", when the guy pulled up, it was basically a drunk homeless man driving a 30 year of raft with a moped engine attached. One being all for adventure, we hoped in and set sail on a trip where we almost had to kill a man.
At first the drunken hobo was funny, however after he drunkenly pulled out his machinate and told us he was friends with Bill (Gates), we noticed some trouble, now obviously nothing actually happened however there were a few tense moments, at one point Kris was about to throw the guy overboard after his phone fell in the water. I eventually did (throw him overboard) which is still one of my highlights of the trip. We dropped everyone off on the beach and I stayed back with the hobo to go get our golf cart at the other end of the island, my buddy Skender stayed back with me, the captain said I could drive the boat(raft), so as he stood up to let me take over the controls, I ripped the steering wheel and sent him flying over the side of the boat, the look on this hobo's face as he fell off the side fully dressed will forever be locked in my head. He was quick or maybe the boat was just that slow that he was able to hold onto the back of the boat, so we had to pull him back on board instead of leaving him in the ocean.
All in all, the trip was a great success and having a smaller group it was much easier to move around, explore and share real experiences. As much fun as the huge group trips are, its hard to get those 1 on 1 connections with some much going on. I have not even began to think of the next trip however it will most likely be some time in the end of July. If you are interested in coming, let me know, as I would like to keep it like this trip of half a dozen members.
______________________________
