Market Outlook
"The goal of a successful trader is to make the best trades. Money is secondary"
Funny what a week of higher price action can do to ones confidence about the market. At the start of the week when the market was hovering ever so closely to the recent key area of support in the S&P 500. All that what we had seen over the last two months spelled out a break of support. Something I was planning for, but the market had other plans.
As stark as the market looked coming into this holiday week, it did what Mr Market loves to do. The complete opposite of what everyone is expecting. And just like that, the market climbed higher every day last week, where its now just about 1% away from hitting a new all time high.
For now the continuation of the forming of topping patterns in the major indexes and sectors is the key theme. We saw the plethora of breakdown stages that had formed over the past month, virtually all break higher. Seeing this it shows us the market would rather trade in a range at highs, then continue down the break down path. Range bound trading overall is what we should come to expect.
When we talk about sector rotation or the changing of leadership, we are seeing that pretty clearly recently. For most of this rally over the last few months it was Semi and Tech leading the way.
But after both of these sectors increased by nearly 100% off there lows this year. They are getting tired as the two major sectors that lagged early in the year are now playing catch up. Those two being, the Healthcare and Bio Tech sector. Healthcare which was a dog at the start of 2025, was the only sector last week to put in a new all time high.
Biotechs are not to far behind as they are closing in on there ATH retest area as well.
There are also sectors such as Consumer Discreationary that are setting up for a Blue Sky Breakout in time and even the Energy sector which has been bull flagging nicely recently.
With the snap back we got last week, all the charts that were broken the week prior, don't look as broken today. But with that trade off, often goes the risk reward with it. The best risk rewards are the hard buys, not the easy ones. We are walking into the new week with endless easy buys. It should be no real reminder that buying a stock on its 5th day up is often not a wise move.
Being selective over the last few weeks has been rewarding as most of you are seeing the benefits of that. It could be Joe's swing in REGN thats up $100 from his entry.
Or Abby trading the ranges in WMT over and over successfully. Having one good idea tends to pay much better then chasing around a bunch of OK ideals. For myself, my two main ideas has been TSLA and AAPL more recently.
TSLA, like the market and most names, looked toast a week ago and today seems to be still chopping around in its wide 90 point range. Where Apple looks like it may just want to repeat what Google has done after it broke out of its all time high a few months ago.
Apple has not done much yet, but same with Google, it was slow and boring at the start of the breakout before it really got going.
Both Google and Apple broke out to new all time highs, and both formed tight bull flags above those highs. Now Google is a few months ahead price action wise, but if Apple can hold up here and push higher, it could repeat what Google did.
As the focus right now is on Healthcare and Bio Tech, there is another name showing us a similar set up. That name would be GILD, its taken GILD over a decade to get back above its ATH from 2015.
More recently it finally broke out above that decade long resistance area. But, just like Google at the start and Apple so far. GILD has also been slow to turn on the ATH breakout jets just yet.
It got above the ATH level and has been trading in a tight range, not being able to break higher or lower for that matter. The main focus is when GILD can break and close above the 129 level to see if it wants to continue the climb higher. Based on the measured move of this macro pattern, GILD could be a $200+ name in 2026.
My focus continues to be very selective in a few ideas while trying to risk as little as possible. TSLA, AAPL, GILD, are all trades where my goal is to risk as little as 2-5%, yet aim to make 30% or more.
So the question to ask yourself, what is the best chart out there that you can find?
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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What Big Picture Offers:
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Cyclical - sectors that are more sensitive overall market conditions.
Materials
Consumer Discretionary
Financials
REIT
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What's been on your mind about your trading lately?
Reply to this email with any question or idea you've been thinking about. I'd love to hear it and dive in deeper with you.
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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's
AAPL
CRSP
FANG
FIG
GILD
GILD PT2.
REGN
ROKU
TSLA
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