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Broad Market Outlook
With this wishy washy action lately, even as the broad market is still managing to tick new highs, from a trading standpoint, it surely does not feel that way.
The shift out of the breakout market that we grew accustom to from October to November has continued to confirm the shift into a range bound market
In breakout markets, its obviously a much easier market to trade in, one where you buy what looks prettiest and often get rewarded. Buying high and selling higher. If a breakout market was a board game, it would be Checkers, where there's a limited amount of moves and often an easier game to grasp.
While a range bound market, forces you to think more critically and buying what looks the prettiest rarely looks as good the following morning. In a range bound market, its a quality game, not a quantity game. Its more like a game of Chess, where patience and thinking a few moves ahead often are whats required.
We often find the best deals in the names that look the ugliest in the short term. I don't mean names that are so dead that they are trading near 52 week lows, gapping down huge with increasing volume but names that are pulling into support in the short term that we keep an eye on to see if the selling continues or if its slowly up just when its most hated.
Just think of the overall shift in the groups outlook of the market on Wednesday (bullish engulfing back at highs) vs Friday pulling back in. In this 5% range, it does not look ugly just yet dead smack in the middle of the range. It will look much scarier if we see a retest of support at 450 where the market will look like its about to fall off a cliff and it just might however that cliff isn't the edge of Mt Everest, its a cliff with a ledge a few feet below at SPY 425.
If we pull into 450 this week, when things are looking its bleakest and the chat is the quietest, that is the ideal time to scan through the market to find a diamond in the rough.
If you can't find one, that the answer is simple, take a step back, away from the ledge, and let the rest jump down lower, then you can simply just take the stairs without any of the risk.
From Ben G
SPY
Dow Jones
Nasdaq
Mid Caps
Small Caps
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Sector Rotation
Sensitive - sectors that have moderate correlations to overall market conditions.
Tech
Energy
Industrial
Telecom
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"Don’t tell me what you think, just tell me what’s in your portfolio"
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Cyclical - sectors that are more sensitive overall market conditions.
Materials
Consumer Discretionary
Financials
REIT
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Video Lesson Playlists
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Defensive- sectors that tend to outperforming during sub par market conditions.
Consumer Staples
Healthcare
Bio Tech
Utilities
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Big Picture Set Up
BOX
This BOX continues to flag in this $2 range, let's not miss that $27 breakout.
GDYN
Quite a crappy trading day on Thursday to close bearish engulfing but it continues to hold that 36 area of support, keeping the stop as is vs 36 and will add up through 42 if given the chance.
TBI
TBI continues to base under this 28 level as the 200 day continues to catch up acting as short term support.
ZBRA
Almost got ticked into this one last week as 615 continues to be resistance, will look to add through this flag when its ready to break that level.
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Traveling Experts
4th Annual Vermont Snowboarding Trip Jan 20th-23rd
Video from the last snowboarding trip!
Less then a month until our biggest trip of the year! If you are interested in joining even if you don't ski or snowboard, we will have quads, snow bikes, paintball guns and much more fun in store!
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