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
What a year, we started out the year in a technical bear market, where most thought the world was ending and yet, we had one of the best years in the last decade.
This year showed us a few lessons, and the main one that continues to get pounded into my head is how useless the headlines are. Think of all the major ones this year:
Fear of rate cuts
Fear of lack of rate cuts
All year we had these headlines in our faces 24/7 and all they do is give us a reason to sell stock that most of the time has absolutely zero effect on said headline.
I think back through all my years of trading and all of that time wasted worrying or staying on the sidelines about whatever current negative event, and each and every time, it was always time wasted. Let's focus on the charts and avoiding the news.
Going into this year we should expect to see new highs continue, and be aware that we will need corrections for this market to continue to get some legs underneath it.
What do I mean by legs?
When these leg's are forming, this is usually when:
1. No one want's to get long
2. People want to start shorting
3. The chat is very, very quiet
Right now we are just drifting higher, with no leg's to support it, which has to happen when hitting new highs. We just have to understand that these usually end a certain type of way.
The reason why I am saying this is because right now we are all virtually 100% long, fully invested. Let's continue to ride this wave higher, and be aware that we are ending this year, looking almost identical to how we ended 2017 going into 2018, expect we have not gotten as parabolic just yet.
Next Trading Experts Meet Ups!
January 9th Vermont
Macro Rotation Outlook
The Dow, SPY and Nasdaq are all hitting new highs daily, continue to up those stops as most continue to jump on the "this will never end bandwagon", ride it, just be ready to get out.
The SPY like the Nasdaq continue to stair step higher into new highs, just keep upping those stops!
Nasdaq closed the week strong and it can continue to drift higher as there is no resistance, for now a trailing stop by the weekly low or prior week seems to be the smart move.
MDY Mid Cap Stocks
Mid Caps are in second to last, with Small caps in dead last, we can see how Midcaps have finally retested however didn't have much juice just yet to send it higher as we tend to see this during retest, like you will see in the financials.
IWM Small Caps
Small Caps are in last place trying to play catch up on that retest of the prior high.
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!
- 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
Sensitive - sectors that have moderate correlations to overall market conditions.
Tech continues to set new highs after new highs, and that is great to see until that trend stops, for now a stop vs the weekly low or prior weekly low looks to be the move to avoid a nasty pull back when that day comes.
Energy like Telecom, seem like holds and worthy add's, in time will be added above $82, for a move back to $100 in 2020.
We can see a little mickey mouse flag forming under $156, could be a spot to DCA when it wants to break out, a stop vs $150 should keep you protected.
The grind back to prior highs is just beginning, really this is just an all out hold in my opinion however if your price is near the $90's then a stop vs $90 could make sense.
Cyclical - sectors that are more sensitive overall market conditions.
Materials has a longer road ahead like the Small Caps, where it still needs to take out prior pivot highs before we see any new 52 week highs anytime soon, a 128 stop should keep you in.
VCR Consumer Discretionary
Discretionary's, like Staples, both look great as they take out new highs.
Financials took out that prior high however we are starting to see how there has been no buyers will to take this retest to some new highs, might be time to tighten up.
New range in REIT's are starting to form as the rate cut and hike talk as died down.
Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
Staples look great to continue higher vs 158.
Healthcare is starting to lose some steam, we see a doji forming at highs, next week will be key to see if it can push higher or if a change in trend will be starting.
IBB Bio Tech
Bio's running into a prior pivot high after the biggest and easiest run's its had in 5 years, can't give any of these gains back, tight stop vs 120.
Grinding back to those prior $144 highs, for now, it still needs some room on the stop.
The New Big Picture Set Up
This CRM has been flagging all year under this $168 level, and recently started to get as tight as its ever been. For now I will be looking to start a position through $166 and then add through $168 vs $163. There is no real reason why this cannot be a $200 stock in 2020.