≈ Will they keep leading the way? ≈
When performing top down analysis, traders and investors look to sector groupings to identify strength or weakness within the stock market. Each weekend, we rank our sectors for our Tackle Newsletter to reflect the coach’s consensus of what we see within these groupings. Over the past month or so, the highest rated sectors have been Technology, Communications and Consumer Discretionary stocks. The performance of these sectors has been bullish, and has held this market up, while other areas have lagged.
During Episode 378 of the Trading Justice Podcast, Matt, Tim, and Mark discussed some of the groups within the market that have been performing well and have maintained strong charts. One of the groups was the ‘Pandemic’ stocks, or those that have benefited from the lockdown, which include the likes of Wayfair, Shopify, Docusign, Chewy, Zoom, Netflix and Peloton. Another area has simply been the ‘Blue-Chip Tech’ stocks that have performed very well including names like Facebook, Microsoft, Apple, Google and Amazon.
It is important to watch for themes within stock market performance as you run your daily routines and trade the markets. Over time, the themes become clearer. As markets adjust and change, new groupings or sectors might rise and create opportunities. Top Down analysis is Step 1 in the Seven Step Guide to Trading. If you can benefit from learning this step, start that course immediately or go back and review Module 1 if you have not seen it in some time.
You can access the course here: https://tackletrading.com/course/seven-step-guide-to-trading/
Will these groupings stay strong and lead this market? We will keep watching daily to identify the trends and opportunities as they develop. But, over time, the market will create opportunities in different areas, and if you learn to spot them, you will find better trading candidates on a daily and weekly basis.
Chart of the Day
Sector Performance from June 1st
Over the last month, Technology has been the leading performer among the sectors, followed by Discretionary, Industrials and Communication Services. Utilities and Health Care were the weakest performers.
Video of the Day
How to breakdown a Sector and Find Trades
Learn how to scan within a sector to find trades. When opportunities arise in certain areas of the market, it is important to be able to find those types of companies and take advantage of the price action.
Today’s line up
Traders Lounge 11 AM EST
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Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
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