Welcome back to the best post on the web pertaining to stocks (or at least I would like to think that, I know it is not true though). Anyway, if you have never been on this post before I will take a minute and explain it to you. Essentially what this post is designed to do is provide you with a launching pad to do your own due diligence from regarding your preparation for the week ahead. I am not here to do all the work for you, just to help. If you plan on learnings this business you better be doing your own hard work because to make it as a trader you need to have your on unique formula that you have developed over the course of your hard work. We can now move on to matter you all came here for… Stocks.
A quick review of last week:
Last week we talked about as long as $SPY held higher we would likely trade higher and make another all time high. This is exactly what we did. We discussed how it is was going to be difficult to be aggressively long in this new upper zone but that is not a reason to be shorting the market. We definitively spoke about NOT fighting the trend multiple times last week in the Week Ahead post. Alot of this holds true for this upcoming week as well. Let’s talk about it –
However, before we get to far into this upcoming week I want to share with a video I found interesting this week. If you have never been to this post before this is the section of the post in which I share something that is not (usually) related to stocks that gives us a break for bit. This week it is a video from FinLitTV that I am in. When I was in NYC a month ago I was interviewed by them because they wanted to hear how a teenager navigates his life as a market participant. The goal behind FinLitTV is to promote financial literacy in young adults. I highly recommend at least checking them out. Here is a link to their site – http://finlittv.com/
Here is the video. In this video I speak about how I manage my teenage life with my professional stock trading life. After this video we will get back to stocks.
Alright now we can get back to some stocks and what we are looking at going into the Week Ahead.
Alot of this upcoming week will be the same old market we have had for the past few months now, a very strong bull market. I would like to stress that fighting the trend is horrible idea and calling tops is also by far a horrendous idea. Calling tops makes a fool most of the time if you happen to be right about it once it was luckily and you WON’T be able to do it again anytime soon. So now that we can agree on this we can accept the fact that this is an uptrending market and we need to navigate it from the long side by buying unextended charts coming out of strong technical bases.
Sector rotation has been the name of the game for the past few months now and it continues to happen. Oil and gas companies began to wake up late last week and appear to be the next sector to be the beneficiary of sector rotation. What this essentially means is that as one sector (or stock) extends another sector takes over receives inflows while the extended sector cools off and forms a new base to launch from later on. Sector rotation is a never ending circle and if you are able to master the recognition of it then you are going to likely do well. The energy is the other sector that appears to be perking up a little bit and coming out of a decently long term weekly base. Both of these sector (oil and energy) are worth some time to look into to see what charts out of those groups are looking the best.
In summary for next week: Do not fight the trend, follow sector rotation, raise stops on extended stocks, repeat.
At this point in the post I share my two videos of the week. The first one is called “Sector Analysis”, this video I go over alot of major sectors and how I feel overall on the broad markets. The second video called “Security Analysis” goes over alot of individual stocks that I feel like most people trade as well as some nice set ups I have ran across. After the two videos there will 20+ annotated charts for you to sift through. I highly recommend you look at them all because there are some nice ones in there.
Now finally the annotated charts! Have a great week!