Market Outlook
“If your trading the last week of the year, you didn't make enough during the prior 51”
Anonymous
Going into the week we knew to expect that break of 680, which the market quickly turned that support area into resistance all week. As we continue to trade in this range bound market, the 680 to 690 continues to act as resistance. While the 650 to 660 continues to act as the zone to buy in in the S&P.
As the market pulls in, it can feel almost stubbornly near the upper end of the range but then we get reminders like Wednesdays price action, that once support breaks, sellers present themselves.
As we get into the holidays the most bullish tendencies are Labor Day and New Years. During a period of 33 years, New Years was positive 31 times, with one even close and one down year. During this study of holiday trading, 223 pre holiday trading days were recorded. Of those, the market rose 193 times or 83% of the time. With the odds of the market rising on the day before a holiday were about 7 out of 8 times.
With all the talk about if this Santa Claus rally is coming or not, it does tend to show its face statistically speaking later in this week. Now volume will be light with the market having a half day on Wednesday and being closed on Thursday, with it opening back up on Friday. If the market closes strong on Wednesday, it could be wise to hold out till Friday as the Santa Claus rally tends to show its hand the day after Christmas. Where we could expect a green day of trading on Friday. In plain english just remember its hard to be a scrooge the day after Christmas.
If there is going to be a holiday bump at the end of the week, the best sector out there continues to be the Consumer Discretionary sector. As it gets a boost from TSLA also hovering near ATHs.
As the quote goes at the top of this letter, this last week of trading, should be a quiet one, finish out the year easy and light. There is no need to go into the holidays bummed about a low volume shakekout. If you have some winners on your hands, raise a stop, and go enjoy the time with family and friends.
With that being said, there are a few names setting up going into the week, EDU is setting up for the base break through 56 vs 55. SOFI is setting up for a move through 28 vs 25. ETSY is still setting up for the mini base break through 56 vs 53, JPM is showing us a blue sky breakout through 320. Even WST is setting up for a move through 276.
This is a great time of year to start recapping your trading performace as a whole, reviewing your best and worst trades. While also putting together your business plan recap of the year while setting your goals for the year ahead. If you want a copy of a template that I have been using for years to help with this task, let me know and I will email it over to you!
From Bennett
Founder Big Picture Trading
To read this newsletter, get access to our alerts, Alpha Chat & all the additional benefits of being a Big Picture member click here to start your 60 day free trial today and use code TE50 for a surpise discount!
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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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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
AS
CBRE
EDU
ETSY
GILD
JPM
NVDA
OKLO
PLTR
SOFI
WST
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