Market Outlook
After a nearly 60 day dry spell of not hitting a new all time high, the S&P did it twice last week. Usually and something we are quite aware of, is that the first retest is often met with resistance. For the S&P the retest area was the 760 area, but the market did not care for that rule this time and blew right past it.
Now over the last few months the S&P traded in a tight 5% range between 730 and 760 or a 30 point range. When it comes to finding the measured move of most bull flags, the first short term target is often a 1:1 climb of the current flag in question. Given the 30 point range, we can assume a 30 point climb higher from 760. Which would give us a short term target of around 800, where this big round psychological number can often act as magnet.
Now with all the fireworks going off with the S&P starting the new all time high train while its jammed packed in the thick of earnings season. Finding swing set ups last week felt like slim pickins. Granted we are entering into the tail end of summer where trading tends to slow down as all the big money are off on yachts somewhere.
The good thing is that even with the slow swing trading environment, it should pick up after Labour Day and for those who have benefited from the Big Picture Model over the years. Even if there were not many swing trades worth taking last week. Our model is at a new record high again. While the pickins may be slim in the week ahead this is always a good reminder that we have something to be happy about.
Sector wise, Semi's continue to try to inch there way out of the breakdown stage they have been in and they just might be able to pull it off. But the risk reward up here is not as favorable.
Sure it can push through this 590 area and work its way back to 670 but its a much harder fight then the easy one its been use to since April. While there are two other sectors that are setting up with much less resistance in front of them.
First up we have the current sector leader, Financials.
They have been in a solid stage 2 breakout since April respecting the channel its been it and for the last two weeks have continued to work on hitting new all time highs (red line was the previous ATH area), when pickins are slim, focusing on the leader is easiest.
The next runner up is the Healthcare sector.
They have already retested there ATH, pulled back in and are right back at the ATH area for a 3rd time. The healthcare sector is setting up for a textbook breakout and this would be the sector to keep the closest eye on for the week ahead. If there is a swing trade worth taking, it will most likely be in this sector or bio techs this week.
With this slower action on the trading front this past week and some idle time on my hands, we have started working on a new tax book. I know, taxes boring, but we are making this book focused towards business owners. Very similar to our trading education, where we use real tax mistakes that our clients unfortunately learned the hard way (before coming to us). Such as why you should never put a property in an S Corp.
Our next book will be more engaging and story telling based compared to the Tax for Dummies books that could put us all to sleep. Our goal is to keep you engaged with case studies to see what you would do in varies business decisions based on the lesson at hand. For those who are running a business or thinking of starting one soon, this book will help put all of those questions you may have in a cohesive order. As I have tried my hardest to do with the Dumb Money book about swing trading and investing. Expect to see this new book out in 2027. If any business owners want an early sneak peak at the topics we are going over shoot me a message on discord.
Also while we wrap up this weeks newsletter talking about books, the audiobook for the Dumb Money book is live!
From Bennett
Founder Big Picture Trading
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For those who like to listen to there books, we listened and our audiobook is live along side the kindle, soft and hard cover! Add this book to your library today!
Click here to add to your book portfolio
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