Market Outlook
"It's not whether you're right or wrong; it's how much you make when you're right and how much you lose when you're wrong"
George Soros
Last week had something that we may only see once in a life time which was Fed Chair Jerome Powell addressing the indictment his office receieved. Which just shows the true distain the President and Powell have for each other. It does put Powell in a tough spot to cut rates and quite frankly, with a market at highs, we don't need anymore cuts right now. Powell is stuck in a tough damned if you do, damned if you don't situation, where doing what the president doesn't want, seems to be the damned route, he is going to take. We might see some quarter point rate cuts this year, but I would not be banking on it if this back and forth continues, which it seems like it will.
Earning season aslo has started and as we get into the thick of it, it's imperative that you know when the names you are trading are reporting. There is nothing worse then getting caught in an earnings gap down because of a simple mistake of forgetting when a name reports.
Market wise, it was a mixed bag of rotation last week. We saw the Small and Mid Caps continue to breakout to new ATHs, a trend that should continue through out the year. While the Nasdaq names continue to tighten up as they form a textbook bullish pennant. The S&P continues to form extremely small pull backs as it inches towards the 700 level at a snails pace.
Among the sectors, there were quite the handful that broke out this past week as the overall index barely budged a percent. Semi's rallied to new highs, along with Industrials, Materials and even Consumer Staples went on quite the run but failed to tag new ATHs.
It seems sector wise, either sectors are on a virtical climb to new highs or they are flagging out with no middle in between. With little weakness other then Utilites slowly pulling into macro support.
Right now as the Small Caps are just waking up from a half decade slumber, this could be a great time to focus on the Small Cap names while the larger cap markets seem a bit overheated. From a trading standpoint, my focus will be on those names for the upcoming week.
From a trading standpoint, given what we are seeing from the sectors, is showing us a main clue. Right now when it comes to breakouts, you need to be right immediately or get out of dodge. A few of my recent trades (H & WST) both were names that spent time around my price for a day or two and it was a sign to get out of dodge. Hyatt was a breakeven trade that sold off 3% after I got out. While WST was a 2% loss before it sold off 7% on the day in question. Both names hit the breakout level and had little or no follow through. While Orlando on the other hand caught ASTS and in a blink, the name was gone from the breakout area and the next day was up nearly 20%. Now ASTS was an insane move, but the point is that with breakouts right now, if its still near or below your entry price by the following day, look for the exit. The winners take care of themselves, the losers are the one's that need to be pruned quickly.
The market will be closed on Monday for MLK. While on Thursday I will be heading up to Vermont with a handful of members for our annual snowboarding trip that we have been doing for almost a decade at this point. If you are driving distance to Killington, Vermont and want to come by, shoot me a message on Discord. P.S. pack a bathing suit (the house has an indoor pool).
It will be a light trading week on my end, as I tend to avoid putting on risk before going away. However I still as always will post the best charts I can find each day this week. Call out your top idea's and any questions you have let me know!
From Bennett
Founder Big Picture Trading
P.S. For all of our tax clients, please fill out your questionnaire if you have not already and start emailing over your tax doc's as they become available to Tax@BigPictureSwingTrading.com, if you are not a tax client and want to do a free tax review let me know and we can show you possible tax deductions that you may have missed.
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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:
Looking to join a group of swing traders focusing on low risk trades?
Need help with your personal or business tax filings?
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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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Big Picture Set Up's
AS
ASTS
AXP
BIDU
GILD
IDXX
RRR
SHW
TSLA
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Vermont Trip is this weekend!
Looking forward to catching up with all the members attending this years annual Vermont Trip! See you all on Thursday!
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