Market Outlook
The overall uptrend continues to trade in smaller ranges as the market clings onto this upward channel for dear life. The Nasdaq names were pretty strong all week but did have a weak close on Friday. While the S&P and Dow 30 names continued to form their own respective mickey mouse flags.
It seems that broadly the markets are in this massive upward channel. As its getting very close to the upper range of the resistance area in this channel thats held since 2018. We have even seen somewhat euphoria trading with the endless amount of breakouts we have been gifted with this summer. As the markets inch towards this macro resistance area.
As the markets have gotten near macro resistance areas, we have seen the shorter term upward channels that the Nasdaq and S&P 500 have both stayed in since May. Are now starting to show whispers that a shift out of that breakout stage into a topping stage is more than likely in the cards.
We have seen this overall slow change from easy breakouts to now more selective set ups. For now it seems a matter of when, not if these support area for the major markets are bound to break into a new stage.
But this isn't a pull the fire alarm type of breakdown. The markets have been extremely strong and unless there is a new major market changing event, there should not be this massive switch from bullishness to bearishness. But it does seem a shift to a new consolidation period is on the horizon.
Materials continues to be a leading clue, as they were the first sector to break the support area of the breakout stage. They were the first to form a topping consolidation pattern (orange lines), and they were the first to break out to the upside out of that topping pattern.
We can still expect to see new all time highs moving forward, but we also should not be surprised if we start to see more side ways actions as the market digests the run it's been on and waits for the next round of positive news. If we start to get a rate cut or two, that would be a sure catalyst to send the markets back into breakout mode.
Going into the week, healthcare names have been showing one of the best risk reward setups as they are flagging tightly under their recent stage 1 base.
This could be a sector to keep an eye on if the market continues its climb higher this week. With the market closed on Monday, you have an extra day to do your research and come into Tuesday ready for what the market wants to throw at us. For myself, my focus is this WMT trade.
As we saw it pull back into support and got long on the way back up after a few inside days. I will be looking to trade the range its been in and take profits again if/when it can get back up towards the recent area of resistance.
MLM is another top idea that has been forming a textbook blue sky breakout through 625.
Enjoy these last few days of summer and before you know it, fall will be here and I'll be inviting you to join us for the first Big Picture meet up in New Jersey.
From Bennett
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Macro Rotation Outlook
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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Cyclical - sectors that are more sensitive overall market conditions.
Materials
Consumer Discretionary
Financials
REIT
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Defensive - sectors that tend to outperforming during sub par market conditions.
Consumer Staples
Healthcare
Bio Tech
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Brick by Brick
Thank You for Being One of the First
I want to sincerely thank you for joining me at Big Picture Trading. Over the years, I’ve discovered how much I enjoy building new ideas from the ground up and the excitement that comes with adding my own vision and creativity to a growing business.
I’ve just finished putting together a small gift that I’ll be sending your way in the coming weeks. This is only the first of many surprises I have planned, and as you were one of the very first members to support this new chapter, you’ll always have a special place at the top of my list.
It’s been a real pleasure connecting with you on our calls over the past month. Please know I’m always just a phone call or text away if you need anything at all.
With each future gift I create, I’ll continue down the list of early members like you who believed in me from the start. Sometimes being early comes with a cost in the markets, but here, you’ll see the benefits of being early unfold with time.
Thank you for your trust and support & I look forward to growing together.
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