Finding right sectors (beginners) - SWING TRADING

Feb 27

The Game Plan.
1. Based on the SPX general trend.
2. Figure out the top1% performing sector and stock (outperformers).
//lets say, before recent slump BTC was the benchmark. And now it's probably SOXX (semis).
3. Compare the relative performance (/) to SOXX (/SOXX).

Feb 27

Note

OIH (oil services) beginning of february

Feb 27

Note

some people use /SPX. I think it's better to compare to SOXX. because that's the top, hot sector. Sticking with SOXX means lowering risk due to demand side.

Feb 27

Note

XBI (bio tech) break out since november. (Inflow month... pay attention. With SPX being volatile).

Feb 27

Note

BLOK blockchain, btc miners in around APR or September.

Feb 27

Note

Gold based from gold miners. November, December or January.

Note: "Gretzky principle: go where puck will be, not where it is". Meaning, dont buy the break outs -- buy before they happen. Sell on the weakness.

Feb 27

Note

Clean tech break out. ---> Buy before they break out.

//only buy sectors that are above the 200dma.

Feb 27

Note

Buy before they break out - meaning, add the alert in half way.

Feb 27

Note

Lithium miners are interesting. Since mid FEB.

Feb 27

Note

are.. or was interesting.

Feb 27

Note

Accumulation + Tight ranges are good. High swingy volatile, "spread out" are bad. Look for HIGHER LOW structure. It points to institutional demand (or market demand in general). Dumb money don't buy at lows.

Feb 27

Note

You can use /spx for accuracy (timing the entries). But /SOXX to screen for right sectors, stocks.

Feb 27

Note

If Gold beats SPX, that gives mixed feelings. If it beats SOXX, that gives me confidence.

Feb 27

Note

Your ultimate goal as a swing trader should be to have your portfolio always go up.
It's common sense but it separates actually earners with losers.
You have no control over the outcome (nor should worry about it, even if failing or losing everything)
- you have to control the precision of your entries (the timing and quality).
Mastery is mastering this basic. Not in complex stuff.

The goal (your portfolio, one direction): ----> ----> ----> ----> ---> .

Step one; is to cut off what's impossible. Believe.
note: You follow the SPX general trend.

Feb 27

Note

Rule 1: never buy extensions. Only pattern break outs.

Feb 27

Note

Level Two! Navigating and reading market "environment". Using intermarking analysis, "reads" (tells).

Value outperforming growth has been correlating with FAANG underperformance. Probably expensive FAANG, money rotates to value. And you can (I would argue) pin point or prove that with this chart. Where-ever FAANG bottoms and VTV/VUG peaks (double top), money rotates back to tech.

You dont want to lose time. And money.

Feb 27

Note

Your money correlate with the outcome of the chart.

Feb 27

Note

all results correlate with SPX structure. It's the same as to say "SPX is the driver", or the same as saying "buy based on VIX high rejection, or VIX is the driver".

Feb 27

Note

BTC/GOLD is the best indicator for pure "risk on" environment vs "risk off" (safety, fears, risks).
When in risk on, it's like taking a candy from a baby. Easy money.
It makes sense why we are on a risk off, because of USA vs IRAN, and I would be cautious about 2027 due to CHNA vs TAIWAN. (dont argue with the market. Be nimble).

Feb 27

Note

if you are a loser... you buy this low, because.. "cycle lows". Lows == massive returns. Congrats on underperforming the market, losing time and money due to panic selling.

Feb 27

Note

Note: success correlate with upslope 50 and 200dma. Which means - BTC SUCKS this first half of year. Don't compete. Dominate. It means only be with trends that align with this 50/200 rule.

Feb 27

Note

which is to say.. BTC/SOXX Would have humbled you. Basics.. my guy.

Feb 27

Note

Following technicals and swing trading means being behind the curve, all these top swing traders share money rotation after the fact. I think it makes sense to use investment approach, what happens 6-12 months ahead, because that's the true driver (and markets work based on investment, not trades).

ie think in abstraction. You want to be "early" (6-12 months before the fact, fundamental). Markets always price something in.

Which proves why bitcoin without drivers would not rally anywhere, despite of xyz sentiment thesis or "bullish technicals".
And why buying gold (before "taiwan) made sense. Because markets price in the future. Charts are backwards looking, despite of the success that correlate with sharp 50/200 slopes.

Feb 27

Note

in this context, USOIL bullish is a head wind for stocks.

Feb 27

Note

Oil market doesnt mater. But sometimes it did have predictive property.
1) USOIL/SPX marks both strength in USOIL and weakness in SPX. in the end of 2021 crude oil was correlated to rising inflation (or vice versa?)(above 1-2% goldilocks range), with rising TNX yield, in return a headwind for SPX?
2) oil market reversed, in a bullish trend. That spooked the market? Cant recall what was the macro back then.

3) real threat for a iranian sea blockade. (and domino effect).

//In August 2024 the same threat, when Israel-Iran traded with strikes. (Though elevated market in a presidency year before September-October expected pull backs).

Feb 28

Note

"unintended consequences". (dominoes) -> US prolongens war with Iran.. opens potential for Taiwan invasion etc. Because you would correlate this (US attack) to the ones we seen last year, ie a logic fallacy.

stocks should fall.

Mar 14

Note

most of the stocks are now bellow 200dma. => bear market.