After getting within 2% of hitting new all-time highs, the market has temporarily stalled out. And for the first time in what feels like a while, closed the week lower than it opened.
It does seem like the extremely aggressive stage 2 breakout that the market has been in is starting to change. It seems a stage 3 topping pattern would be what is currently what we are seeing. But my thoughts are that the market starts to consolidate for some time, honestly the longer the better. The more this ATH setup continues to form, even if it takes all summer, sets us up for a great market once we can clear those ATHs.
If we are impatient and the market was to break out say next week (very unlikely), the breakout would lack the power needed to really push the market higher. If we do get a real consolidation then when we do get the ATH breakout, it should have some legs to climb higher.
For myself, the cash that I have on the sideline earmarked for LT investing will be put to work once we clear ATHs.
On the short-term side of things, being selective and focusing on your top idea seems to be working out nicely, as the PnL posts continue to increase even with the market pulling in ever so slightly.
Sector-wise, Financials continue to look great as they continue to flag out. Small Caps are showing us a nice sneak buy back.
While Healthcare, Materials & Utilities all have been somewhat weak recently. Healthcare and Materials are straight-up avoids where Utilities just seem to be like what the broad markets need, some consolidation under highs before the next breakout.
For those of you, Casey, Zac Culbertson, Philip Oros, Dave K, Jay, Ruth, Frankie, Connor, Jorge and everyone else who’s been crushing it lately—continue doing exactly what you’re doing, as it’s clearly working.
Shouts to Casey for sharing his EMA strategy. When you can explain/teach what you do, it helps cement those ideas, rules, and lessons far more than simply just reading about it. There is a reason I will never buy a retest—after explaining that lesson hundreds of times, it’s burned into my memory to never do that.
For the other members who have been seeing success from trading or even broader financial goals, share them with the group—we all can learn from each other.
And if you feel like you are behind or find yourself trying to compare yourself to another trader, first off, don’t do that. Every dollar in mine or yours or anyone else’s account is exactly how much they should have based on what they have done to get to where they are. Instead of looking at others’ greener grass, it’s far more efficient to focus and water your own lawn or ask for help on how to properly water your lawn.
Macro Rotation Outlook
MDLZ
MNST
