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
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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.
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Broad Market Outlook
This week we had monster news from the FED, I felt it was soo important that I was online at the DMV at 2pm renewing my registration. I spent the week asking new traders, experienced traders, professionals and even money mangers, virtually 90% had no clue as to what impact the outcome would be and how it would effect our markets.
So in short here is the answer from the smartest money manager I know, he said it so simply:
Raise rate = FED thinks the economy will be weaker going forward
Unchanged = FED thinks market is running fine
Lower Rates = FED feels the market will be weaker going forward and needs help
For you or myself, raising or lower rates means nothing to us, unless we are shopping to buy a home, our Credit Card interest rate is not going to change, our current rate on our mortgage is not going to change, the 0% interest we get in our savings account is not going to change either. Quite frankly for 99.9999% of people, changing of rates will have zero impact on there day to day life's.
As traders, we trade charts, we could care less about the fundamentals or impacts on GDP or blah blah blah, we buy $100, have a stop at $99 and sell at $105+, rinse and repeat. Hopefully now you see why I could careless what the FED does.
We saw the SPY and DOW hit new highs this week with Nasdaq lagging behind, broadly the meat of the move is behind us, up 25-30% this year, up 6-8% in the last two weeks, just when everything looks beautiful and sunny, that rain cloud pops up before we know it. Now remember I am speaking broadly about the 4,000 plus stocks in our market.
The cyclical stocks have been doing very well, think of Materials, Financials and Consumer Discretionary's, all 3 of these sectors have tight risk entries, while the rest like Defensive stocks like REIT's and Utilities are a tad extended.
From a swing trading standpoint, regardless of where the index's are there are always opportunities, as long as we keep scanning daily, find set ups, buy high, DCA higher, trail our winners and save weekly, we will make money regardless if the market is at 52 week highs or lows!
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Goals Exceeded
Cris Mora 18 Green Days in a row!
Sibling Comma Day Gina and Carl $1,000+ days!
Goals on the Radar
Valentino's 10th client
Mike Higgins getting 50 feedback's on Amazon (with the Alpha's help)
D Wood $1,000 Day
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Game Plan for the Week Ahead!
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Macro Rotation
Cheat Sheet
(1st) Dow Jones Take some profits, 260 Stop
(2nd) S&P 500 288 Stop
(3rd) Nasdaq 7400 Stop
(4th) Mid Caps 345 Stop
(5th) Small Caps 145 Stop
Bonds 82 Stop
10 Year at 2.08%
Oil 59 Stop
Dow Jones
Large caps have been leading us and the Dow 30 is in 1st place right now chart wise, however 4th times a charm might not be enough for us to see new highs, taking profit time, 260 Stop.
SPY
288 Stop as SPY tickles new highs, broadly we are not paid to buy highs, were paid to buy when people are shitting there pants.
Nasdaq
We can see Tech lagging a bit while the Dow 30 and S&P 500 hit new highs, Nasdaq should be tagging that level soon, for now 7400 stop.
MDY Mid Cap Stocks
Mid Caps still lagging, Stop 345.
IWM Small Caps
Small caps lagging even behind the Mid's 145 Stop.
BND Bond Market
82 stop as bond prices continue to rally as rates fall.
10 Year Treasury Note Yielding 2.07%
Back near the 2% level which has been an area of prior support and resistance, we could see it hold here and bounce, however bigger picture seems like were touching lows before we retest highs.
Full stop major red flag, will be if the 10 year yields more than the 30 year and as you can see there is still a .50% difference between the two.
10 Year Treasury 2.07%
30 Year Treasury 2.58%
OIL
New higher low in Oil, for now the out is 59 a barrel!
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International Rotation
(1st) Russia take profits 24.50 retest, 23 stop
(2nd) India 36 DCA vs 32 Stop
(3rd) Europe 56 DCA 52 Stop
(4th) Japan 56 DCA 52 Stop
(5th) Emerging Markets 43 DCA 40 Stop
(6th) China 88 Stop
RSX Russia
Look to take profits on the $24.50 retest, stop vs 23.
INDA India
36 DCA vs 32 Stop
VGK Europe
56 DCA vs 52.
EWJ Japan
56 DCA vs 52.
VWO Emerging Markets
43 DCA vs 40.
GXC China
Picked up some GXC this week, for now the out is 88!
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If you have a friend that can benefit from what you have learned from Trading Experts, shoot me there contact info and we will see if we can help!
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Sector Rotation
Key points
- Best suited in a taxable account
- 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 break even if better opportunities arise elsewhere in other sectors.
- If you have more than $50k, we can set this model up for you!
Cheat Sheet
VGT 204 Stop
VDE 78 Stop
VIS 140 Stop
VOX 88 DCA
VAW 128 DCA 124 Stop
VCR 182 DCA 178 Stop
VFH 69 DCA 65 Stop
VNQ 84 Stop
VDC 142 Stop
VHT 170 Stop
VPU 126 Stop
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Sensitive - sectors that have moderate correlations to overall market conditions.
VGT Tech
For now the out is vs 204, if your in hold on as we should see a retest of new highs soon!
VDE Energy
Picked up some VDE this week, still alot of work to do, next spot will be this 88 level, for now the real out is 78!
VIS Industrial
Got some nice stock on the way up off recent lows, for now the stop is vs 140 as it try's to retest the 148 area!
VOX Telecom
For as long as the Big Picture has been around, VOX has been in a downtrend, finally the tune is started to change after 2 years, this 88 is a major battle ground in this sector!
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Cyclical - sectors that are more sensitive overall market conditions.
VAW Materials
Stop vs 124, while VAW works on breaking this macro downtrend!
VCR Consumer Discretionary
Stop vs 178 while the Discretionary's try to break 182 for 3rd times a charm!
VFH Financials
Like Materials, Financials are trying to break this trend of lower highs, for now looking to add above 69 vs 65!
VNQ REIT
84 Stop as the REIT's continue there move higher, might be a bit extended short term.
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Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
142 stop as the Staples try to flag out near highs!
VHT Healthcare
170 Stop as Healthcare tried to break this 176 level!
VPU Utilities
126 Stop and let it work higher!
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Sub Sector Rotation
Cheat Sheet
IBB 100 Stop
IBB Bio Tech
Stop at $99.89 and let it work, got a nice add up through $105 last week that has been working!
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The New Big Picture Set Up
The Big Picture CPA $140+ 12 Month Target
CPA is an industrial, more specifically an airline from Panama, we can see how this base has been forming under the $100 psychological level for quite some time, had an earnings gap up and forming an earnings flag, and has had 3 attempts at it so far, which checks 4 things off that I would like to see, we can also see the higher lows after each attempt. This is a set up where you can take the swing through $100 on tight risk, or be light, buy $100 set the stop at the weekly low and hold for 3-6 months for it to work its way back to $140 or higher!
Big Picture Target $140+
Big Picture Entry $100.05
Stop $87.89
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The Big Picture's Updated
The Big Picture SRPT $175+ 12 Month Target
Last week we were pretty enthusiastic about this name and no surprise it gave us a small middle finger, I am still in and will add $125, main lesson learned is the 30 minutes rule - avoid putting in buy stops until after 10am!
Got in a week early, held and let it put in a pivot, for the guys who were mad it didnt go day 1, was for sure a lesson in patience, added back up through the $125 (key Dollar Cost Averaging on the way up), I took this as a regular swing, trailing the stop by LOD and took the gain, still in a wide $25 point range, have a feeling we will be buying through $135 down the road!
The Big Picture VOYA $75+ 12 Month Target
Voya shook some people out for sure when it broke $52 and snapped right back showing us people still want to be involved. Will have to buy the $55 break.
Picked up some on Wednesday than added on Friday, still not ready, will continue to buy $55 till it breaks, than hand sitting time!
Big Picture Target $75+
Big Picture Entry $55.05
Stop $52.89
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 break even, 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.
When $100 goes, we will be in!
Big Picture Target $126+
Big Picture Entry $100.05
Stop $95.89
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Trading Experts Brooklyn Meet Up
Such a great time last night getting to catch up with all the Alpha's! We had the whole team out, Braden our app developer made an appearance, Dennis who has been helping us from a podcasting stand point came through, Sam and his editor were on deck as well, who helped us film our new intro so we can continue to put out more videos. Higgins smuggled in a bottle of Henny along with dozens of Power Caps that we were handing out like hot cakes! Got to hear more about Valentino's new coaching business, and Phil Niemans wild nights (that he never invites us too) while he parties with Paris Hilton. Sam P and Kevin made the long haul from south jersey to have a few beers with the crew. Yeno (Big Papi) who has been helping the Alphas get jobs stopped by as well, had some accounting experts Yousef and Alejandro stop by as well! Brooklyn native Yosnel showed Andy, Yeno and myself around into the wee hours of the night!
We really appreciate everyone who made it out and it was amazing to see the progression from the last big meet up back in November at Beauty in Essex where most of the conversation revolved around future business ideas, fast forward 7 months later, pretty much everyone in the picture above is running some type of business that they started, from soccer coaching to sleeping pills to podcasting to accounting to video editing, selling on amazon and real estate!
Trading Experts NYC Meet Up
Such a great time and thanks to all the Alpha's that made it out to this weekends meet up in NYC! Shake and myself will be planning another NYC meet up next month!
Trading Experts Miami/Bimini Bahamas
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.
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