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Broad Market Outlook
Eventually the party ends
As we can see even over the last 3 years, we have been given extremely long periods of great trading. What follows tends to be a few months of harder action. When you look at the last 1,000 days of trading, we can see quite clearly that for at least 70% of the time the market is on your side.
Now the hard part, is being aware of this, making sure that you clean up during the 70% and making sure to not give back much during the other 30%.
Given how sharp the vertical move higher has been recently, we have to be well aware that a pull back is in the cards. Even a 10% pull back which is completely normally would be a drop back to 300.
We saw last week and really just end of Friday, the overall quietness in the chat and lack of PnL posts. Let's continue to focus on the best charts, while also be willingly to start lifting our foot off the gas pedal. That does not meaning selling everything and stocking up on Campbell's soup and ammo. It might be the time to lighten up on the cash being outlaid per trade and focusing on getting your risk as close to break even as soon as possible.
Macro Rotation Outlook
Keep upping those stops.
Once you start to hear your friends saying they want to buy the SPY off the support, the fix is in.
New highs are met with new highs until they don't, for now a stop vs 9,000 seems to be the move.
MDY Mid Cap Stocks
As we will see with another sector below, we can see sectors, stocks and major markets retest highs and even push a bit further to run stops, however more often then not, the up move is over for the short term.
IWM Small Caps
Small caps are still playing catch up to try and tag that retest of the prior high.
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Sensitive - sectors that have moderate correlations to overall market conditions.
Time to start looking for the exit.
Will be keeping an eye out for the next add up off support.
Looks as if the mickey flag at highs is failing.
As much as we wanted to hold for the $104 retest, had to take a bit off the table, rather miss a few then give back alot.
Cyclical - sectors that are more sensitive overall market conditions.
Materials like the Small Caps are not really in the game in this market rally, just lagging really far behind.
VCR Consumer Discretionary
Was time to take a bit more off the table after it looked as the overall move was starting to roll over.
Looks like the mickey flag that was forming at new highs will be shaking some stops out very soon.
As we saw with the Mid Caps, the retest could push a bit to run some stops, however for the most part, we tend to see moves end near the retest for some time. Did great buying up off support and selling into the new high.
Defensive- sectors that tend to outperforming during sub par market conditions.
VDC Consumer Staples
Staples are still stair stepping higher, currently giving us a clear out below 158.
Took some gains in the healthcare sector after the stair step move higher for the past 3 months.
IBB Bio Tech
Seems a shakeout of this 116 level is in the cards before we see a move higher.
Bit of a red flag as the utilities are breaking out day after day with the market at highs.
The New Big Picture Set Up
This MDLZ is as A- as one can find in this market, flagging at all time highs back at this $56 for the 3rd major time.