Big picture trading

Whenever the market falls, like it did this week, it’s important to do a ‘Big Picture’ overview.

Getting a big picture view means looking at the market as a whole, to determine where money is flowing in, and where it’s flowing out. Typically, this overview should include the key indexes, along with sectors, currencies, and commodities. Additionally, I like to include some of my favorite ETFs, based on where the strengths and weaknesses are in the market. 

Of course, you can do this chart by chart. For me, I find it quicker and much more helpful to get the Big Picture view using…

The Phoenix Finder Tool.

Check out the screenshot from yesterday:

The Phoenix Finder shows the strength of the trend — particularly how it shifts overtime. The bright green boxes indicate a strong uptrend, and when the boxes drop off, and shift to dashes, that’s the first indication that the trend is losing its strength. A shift to yellow is a warning sign, and a triangle along with red means we have shifted into a downward trend.

As you can see, the key indexes (including SPY, DIA and QQQ) have all shifted in a downward trend, and we’re seeing money flow into the Yen. This is a very typical ‘risk off’ situation, where money is coming out of equities in masse.

But, there are some equities that are bucking this trend.

These are the honey badgers. The stocks that do whatever they want, regardless of what the market’s doing. Now, these are going to be fewer when the market’s breaking to the downside, but they’re still there.

Do You Know How To Find Them?

Based on my grid, I can see that Chewy (CHWY), Teladoc (TDOC), and Livongo Health Inc (LVGO) continue to be strong, even on days where the S&P is down more than 2%. CHWY is one of my favorite stocks this year, as are TDOC and LVGO.

These hot COVID names are lit up on a stormy day!

As we get closer to the election I can almost guarantee we’ll see more volatility in the market, and that can bring about some huge opportunities. I’ll be live trading the two days following the election results, picking out honey badgers with the help of the Phoenix Finder. You can click HERE to join me on November 4th and 5th for the open and close.