Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA OLLI SMH XOP
The Daily Profit Compass provides stock market technical analysis for the stock market today and is focused on the indexes and FAAMGs. Key levels and trading locations are provided, along with trading plans and timely commentary to keep you on the right side of the trade.
Earnings
Earnings kick into a higher gear this week. KO / IBM / JNJ / PG / NFLX / NEE / VZ / LCRX / LVS/ CMG / AXP / HON are among names that may shape sector performance and sentiment.
April Earnings Preview
While not comprehensive, the calendar highlights most of the big names scheduled to report this month beginning next week with the money center banks.
Companion Video
The video is a detailed technical review of the indexes and FATMAAN names. All the key trading levels are identified along with commentary and trade plans for each ticker. Run the video at 1.25x to reduce run time.
Find the Video HERE
Crypto Crisis?
Coming off the $COIN direct listing last week and a new high in Bitcoin nearly tagging $65,000, reports are circulating that the Treasury plan some enforcement actions against several financial institutions for using crypto for money laundering. This has caused price volatility over the weekend briefly taking price to $51K. Price has since stabilized in the mid $50’s but the event puts a fine point on the headline risks with crypto. THings are great until the government says it isnt.
Peloton Treadmill Risk
$PTON prices are plunging on news the Consumer Product Safety Panel issued a warning on PTON treadmills citing risk of death to small infant getting caught under the machine. Price is off about $10-$12
Strategic Look
I am still in the camp of remaining bullish until further notice. Although there is always risk of a rug pull, there are no sell signals. Yes there are yellow flags ( there always are ) but to step aside for these yellow flags would be a mistake. We want to participate in whatever upside remains while still being aware of downside risk. I accomplish this by regular rolling strikes and stops higher as individual names advance and thus regularly making bank deposits while staying long.
- The economy WILL re-open; that should be positive for real economy stocks
- Odds favor higher bond rates over lower rates. That should be a tailwind for financials and cyclicals but a headwind for bubble tech.
- Mega cap tech: Although rising rates are not great for tech, I think mega cap tech will hold its own as it has rock solid earnings support ( unlike bubble tech )
- Materials / Resources / Commodities: Taken together these have been in a 10 year bear market. That is changing. The $CRB commodity index hit a 2 year high. Ag commodities have been running which has fueled fertilizer stocks like CF, MOS, NTR, CGA along with DE etc. Looking for a “golden age” of commodities at least for the next couple of years. Look at the 1970’s and the period of 2000-2007. When commodities run they can do so for years. Dont think you missed it.
I think the backdrop remains bullish for the reasons cited below.
- Bullish Tailwinds
- New Highs are bullish ; not Bearish
- The run up into the next earnings cycle is usually bullish
- Seasonality: 15 of the last 16 Aprils saw price on SPY go higher
- TLT / Rates. Rates have taken a breather but IMO it is a pause before rates head higher. THat would be bullish commodities, cyclicals, banks. Potentially bearish high-flier bubble stocks but we’ll suspend judgement until that day comes.
INDEX CHARTS
A detailed walk-through of the levels and trading strategy for the indexes is given in the video ( link above) . The static charts are provided for reference. The FATMAAN names are also reviewed in the video.
SPY 2 hour
SPY 30 min
QQQ 2 Hour
QQQ 30 min
IWM 2 hour
$IWM 30 Min
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