Market Outlook
In a week of trading with 2 new all time highs by Friday the market was trading a mere .75% higher than where it started the week. The broad indexes (S&P & Nasdaq) are both cemented in their breakout channels which is great for us long term holders. However with this extremely small price action, some setups have been lackluster at key breakout levels.
We know the key pivot low of 653 for now will be the time to raise cash. Until then, we have to just keep swinging the bat until the market tells us to take the walk.
Sector wise, it’s a bit of a mixed bag compared to where the indexes are. Healthcare is breaking out as if TSLA is in their space. Utilities broke out through the retest area and biotechs have been on fire.
The fact that Utilities are breaking out and flew right past the retest area that, as we know is usually met with resistance, is showing a bit of caution as this sector is the flight to safety sector. In a breaking out market, we want to see this sector acting extremely weak, not one of the leaders.
Tech and Semis have been strong, which is to no real surprise other than the fact that the biggest semi on the planet had one of the most boring all time high breakouts possible.
The Semi sector as a whole (SMH) has had a more extreme breakout than the darling of the space. Another sign of caution. Virtually every sector is either flagging or showing bullish signs, really except for the Telecom sector that has looked a tad shaky here at its recent pivot low area.
This is an important chart to remember for if/when we see this action from the indexes and other sectors in the similar channel. When we start to see lower highs and support getting tested. As Telecom has been showing us, if there is a break and close below that area, Telecom will be a big avoid. Same will be true for the other sectors.
As everything, stocks, gold, silver, bitcoin, pretty much anything you can think of is rallying. The thought is it will go on forever and it can continue higher but we just have to know the signs to raise USD if that time ever comes.
It felt like a few weeks ago, every breakout was working. Yet over the last week or two, there has not been much follow through unless it was extremely specific names. Jeff, sorry I talked you out of RGTI, this and Christina's wild stock were two exceptions as they both defied the laws of stock physics and ripped higher while never looking back.
On my end, I have been extremely tight with any new trades, maybe even too tight. But I would rather be on the side of caution when most are hanging out on the exuberant side. Going into the week ahead, I will be keeping an eye on TSLA to see when a new pivot forms to potentially add to it. SHEL's macro 74 level still looks great and EDU is still gearing up for that 56 base breakout.
Congrats to all the members who had some very impressive gains from this past week and for everyone who has been more vocal sharing ideas, keep it up.
From Bennett
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Macro Rotation Outlook
