Daily Profit Compass April 13

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Tickers discussed: SPY QQQ IWM  VIX FB AAPL AMZN MSFT GOOGL INTC   Strategy and Tactical Update

The Daily Profit Compass provides the stock market analysis for the day. Key levels and trading locations for the indexes are provided, along with trading plans and timely commentary to keep you on the right side of the trade.

Trader’s Couch :

Make practice the focal point of your learning

Generally speaking, you can learn more by doing something for an hour than reading about it for 10 hours.  Yes, by all means, continue to make studying part of your learning process, but make doing the focal point.  In trading, there is no substitute for time in the chair actually trading.  Feeling the widest range of possible emotions course through your body as price goes both for and against you is an indescribable sensation. You’ll never get that from a book. Learn by doing. And FYI, you can learn the same lessons trading a $100 position as you can trading a $10,000 position.

Earnings

News Flow

  • China tightens border with Russia to combat inbound Virus infections
  • OPEC +’s “historic supply cut” met with skepticism as super-contango time spreads widen
  • Iger steps back in to actively manage $DIS as the company reels amidst market turmoil as it loses $30M a day. Bob Chapek, the newly appointed CEO, effectively “benched”
  • $AMZN halts accepting new online grocery customers
  • To avoid massive Ch. 11  loan losses on shale assets, the big banks are contemplating becoming shale operators via specially created companies. The move would require regulatory approval.
  • $JPM tightens mortgage requirements. Prospective buyers now need a 700 FICO score and 20% down payment. Basically saying we don’t want to give mortgages anymore.
  • $GS says we’ve bottomed.
  • Fauci says US could re-start ” in some ways” during May
  • 70 Covid vaccines being explored
  • Boris Johnson released from hospital; thanks staff for saving his life.

 

Market snap shot

Not much to add in the way of commentary after yesterday’s Profit Navigator. If you’re new or missed it, find it HERE

Futures are red by about 1.25-1.5% but are bouncing around. European Markets remain closed for Easter as were several Asian Markets so US futures did not have a lot of global sentiment to follow this morning.  Looks generally risk -off as we head into earnings season with some big banks getting things rolling tomorrow.  Today may be a day to either tread water ahead of earnings or possibly react to oil prices as the market digests the OPEC+ supply cut deal.

Wave 2 DATA

4/13  None

4/14 Redbook,  Import-export prices  FOMC’s Bullard and Evans speak; Big banks kick off earnings

4/15 Retail Sales / Empire State MFG Survey / Industrial Production / Business Inventories / Housing Index / Beige Book / Bostic speaks

4/16 Housing Starts / Initial Jobless Claims / Philly Fed Survey / FOMC Balance sheet at 4pm

4/17  April OP-ex / leading economic indicators

Strategy and Tactics – Tilting bearish

I am positioned bearishly after all the indexes hit resistance and stalled on Friday. As we’ve been discussing, from my view, the path of least resistance is lower in the immediate future. As earnings begin to unfold, that can all quickly change. With bad news likely already in the market to a certain extent, any perceived good news may pop price. If CEO’s offer horrid comments on top of worse than anticipated earnings, sellers may become more active.

Oscillators

For those that missed it over the weekend, $NYMO and $NAMO oscillators have gone from never-before seen lows to never-before -seen highs in just a couple weeks.  An almost impossible and dangerous place to buy stocks.

$VIX…Poised for a pop

The $VIX has pulled into the key 61.8 Fib retracement zone off the high and is close to key support at $36 on the daily chart.  On the 30min chart, price has formed a beautiful bullish falling wedge. Staying on the 30min chart any break above the downtrend line of the wedge and above $47.50 give price room to run.  As part of any breakout confirmation, I’d like to see the RSI break above 50. Even if you don’t decide to trade it, watch closely for the breakout. It will provide clues on how to position yourself in stocks.

FAAMG Charts in Focus

The FAAMG names are such an important part of the market that I wanted to bring them back into focus. Even if you dont trade them, watch them closely for clues on market direction.

$FB 60m: Bulls are ok as long as price holds $170. Gets more iffy below as price would be favored to make a move to $162.50.

$AAPL  Daily On the daily chart, price has hit a triple confluence of resistance at $170. Perfect place to locate a short with a tight stop above.

$AMZN 60m Stock has shown great resilience in this downturn. A pop above the upper trendline gives a fresh buy signal. If price pulls back to the low side of the channel and holds it would be a nice “value buy”.  Too hard a stock to try and short. If you’re bearish for some reason, look at XLY where AMZN is 23-25% of the index.

$MSFT 60m.  Clearly apparent that $164 is the key spot. Stay long above; get short below. Nothing ambiguous about this chart.

$GOOGL $1218 is OH resistance. Bulls get a fresh buy signal on a pop above.  Bears have an opportunity to push price down to $1160 as long as price stays below $1218

$INTC 60min.  Bulls need to hold the uptrend channel to keep the chart constructive. A Break below the channel around $56 would likely bring in more sellers

$Index Chart Review

Follow the annotations on the charts.

SPY 2 hour

SPY 30 min.

QQQ 2 hour 

QQQ 30 min

IWM 2 hour

IWM 30 min

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