After a few slow weeks of trading during the holidays. The second week of the new year has started to show some positive signs that maybe, just maybe, the 2025 rally is rolling over into the new year. The S&P closed the week at new ATHs as its within 1% of touching the psychological number of 7,000. The Dow Jones continues to climb towards 50,000 and Nasdaq is coiling up for a move back to ATHs as well.
Sector wise, we saw Semi's breakout and close at new all time highs this week, along with Materials, Industrials, Telecom and Consumer Discretionaires all hitting new ATHs. Even the Small and Mid Caps joined the party hitting new highs.
There has been no shortage of macro news recently. Between the capture of the Venezeuala Dictator that sent the energy markets in a temporary frenzy. Or announcements from Trump on plans to purchase mortgage backed securities (MBS) that sent home building stocks rallying higher.
Trump also announced a 1 year 10% cap on interest rates. Now the key word is announced, the banks still have to play ball. Over the weekend, I recieved an offer from my Citi card to simply click a button to confirm the next 9 months of my cards with them at 9.9% interest. Some banks might not play ball but it seems already some are trying to get ahead of this from a PR standpoint. It goes without saying, avoid credit card stocks in the short term.
As the market continues to heat up, as always we know to focus on the charts. Index wise, Nasdaq looks to be the place to focus on over the extended Dow 30.
Sector wise, Consumer Discretionaires are just getting starting in there breakout compared to a sector like Industrials that feels extended at current levels.
On the swing trading sides of things, my goal is to continue to focus on a less is more approach. Coming into the week with a small handful of top idea's and trying to ride them for as long as possible. Instead of spreading myself (or yourself) to thin in a bunch of names.
After watching TSLA pull back 75 points, we found a nice entry that has worked out so far. If it continues to climb towards the retest of 500, great, if not then we know where to exit.
Going into the week ahead, still keeping an eye on the ORCL 202 area, ASTS through 100 looks good in time but it's still too wide vs 90 for now. WING 275 is setting up nicely vs 260, NXST is setting up for a textbook breakout through 212. AMZN looks great as it continues to climb towards the 260 ATHs. AS is still showing us the sneaky buy back through 40 vs 36. Even FIG, the recent IPO that has lost nearly $100 in its share price since going public, has had nearly a week of inside days in a tight $2 range. There are set ups out there, but we still need to focus, as always, on finding tight risk entries. Waiting till 10am for entries and raising stops in the afternoon.
Calling out your ideas before you get in them, continues to be a method to limit losses in trades that are not quite ready yet.
From Bennett
Founder Big Picture Trading
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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
Utilities
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