Daily Profit Compass April 14

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Tickers discussed: SPY QQQ IWM  AAPL JPM BAC WFC    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 : Don’t look back

Keep focused on your goals with your eyes looking forward.  Looking back is a distraction and effectively slows you down

Earnings

News Flow

  • Market pops on better than expected COVID headlines and prospects for re-opening the economy
  • Trump’s re-open plan hinges on massive testing which thus far remains elusive
  • Meanwhile 2M homeowners are not paying their mortgage and its expected to worsen
  • $CHK to do  1 for 200 reverse stock split.  A strategy you may see more of in the oil patch
  • Lobbying on behalf of various industry groups to be included on “Essential Business” list intensifies. For example: Is your pet groomer an essential business
  • Airline relief bill nears finish line
  • China tightens border with Russia to combat inbound Virus infections

Big Banks report

By the time you read this, it’s most likely that JPM and WFC will have already reported earnings.  Other big banks will follow in the coming days.  The commentary on the outlook will probably be more important than the numbers. There will probably added volatility in these names, possibly opening the door for a nice trading op. Watch them closely if you’re a nimble , active trader. Otherwise, look for clues in these early reporting companies as to outlook and performance of financials.

Kind of a weird day in markets yesterday. We traded down most of the day, but there were pockets of strength and it seemed like there was an underlying bid.  Tech outperformed  largely on the back of AMZN up 6% ( up $500 from the low and close to an ATH ) along with NFLX up 7% and punching thru $400.  ROKU was up nicely after reporting a big jump in user adoption. Gold and Gold Miners had a nice day; both breaking out to fresh relative highs. The indexes had a big ramp into the close. Reminded me of the Gap- Camp – Ramp  Fed inspired liquidity driven market profile we often saw Oct 2019 – Feb 2020. Will have to watch for a return to this profile as it would be a huge tell that the FOMC liquidity fire hose is working. Here is your sector summary.

 

Wave 2 DATA

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

Still being slightly short, I did not like the price action yesterday.  If they’re gonna ramp price in the last hour everyday, shorts will have a tough time. We talked about the FED not letting ANYTHING go down.  Maybe an early sign that their liquidity is finding it’s way into the market.   I am prepared to go back to a neutral posture if price hits my stops.

Positioning Update: I closed QQQ short for manageable loss; rolled IWM puts down to APR 24 $120P and collected a nice win there. GLD rolled May 152 C to May 160 C. GDX rolled May 27C to May 31C. Really liking the price action in GLD and GDX. Staying with them

Oscillator Watch

Both $NYMO and $NAMO oscillators came down a little, but still running hot. 

 

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.

$BAC Daily  Price needs to recapture $25.75 and hold it to get on the right side of the chart, otherwise lower prices would be favored from here. 

$AAPL  60min  Price broke out above $270. Back tests of $270 that hold can be bought. Price has a path to $279 and is T1.

$JPM Daily  Price needs a break above the 50ema at $104.65 and hold it otherwise price is vulnerable to a pull back. Anything below $97.50 is a short

$WFC Daily.  Price needs to clear the 50ema at $35.66 to get some running room. Anything short of that will likely result in choppy price action within a fairy wide range. If price works its way to the low end of the range it would set up as a long against the low near $25.

 

 

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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