Daily Profit Compass April 21

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Tickers discussed: SPY QQQ IWM DHT  TK TNK    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.

Inspiration – Reach for the unknown

More wisdom that points us to the place that we fully accept that we cannot control what we experience. That goes for both inside and outside the charts. When we are inside the charts I encourage you to keep the metaphor of yourself being a leaf on a stream; flowing with price to an unknown place. Let the path of least resistance take you there. If you do that, you won’t be fighting anything. You’ll be in sync with price. And being in sync with price is what we are all after as traders.

Earnings

NFLX after the bell along with $CP, $CMG, $TXN.   Should provide reads on rail traffic, Fast food, and semis

News Flow

  • Trump to temporarily halt immigration on COVID concerns
  • Oil posts worst day in history as front month contracts collapse. Marine shippers spike as storage dries up.
  • IBM misses on Revs and pulls guidance
  • Reports swirling that Kim Jung Un of N. Korea is in grave health. NK spokesperson says he is fine
  • Secret Santa Mnuchin sends first relief monies to Airlines; meanwhile real people are still waiting for their paper checks

Conflict Resolution

The Bulls and Bears have been waging a battle for hearts, minds, and price over the past month. Bulls and their V-bottom hunters steadfastly maintain the economy will experience a quick uptake. Bears and their L – bottom buddies, think it will be much longer.  Price across the indexes are at trade locations where the bears need to put up or shut up. Yesterday was a start but the bulls held and not much real technical damage was done. This morning futures indicate a down open between 1-1.50%.   There are some key levels on SPY / QQQ to watch.  IWM remains bearish as price never even took out its 38% fib level.  The real key to this market are the FAAMG names.   This market simply wont move appreciably lower unless the AAPL’s and AMZN’s and other large cap tech names break.  At over 22% of the market cap of the entire market, its simply a matter of math.   Watch NFLX closely after the bell.  If bears whack this one it might ripple through to others. If they rip it, bears better run for cover.  It’s still anyone’s game, but I dont think we will need to wait long for this near-term conflict to be resolved.

Marine Tankers

The marine shipping sector ripped higher on the back of plummeting oil causing super-contango ( front month – back month spreads blowing out )  and land-locked storage drying up. The super-contango condition allows a very profitable arbitrage for those who can take physical delivery now, store it, then deliver 3, 6, or 9 months out.  That is why speculators are scrambling to book these marine tankers.  This condition should persist for at least another month if not 2 or 3 depending on how long both the demand shortfall and supply surplus exists.

I have posted a few marine shipper charts below ( DHT, TK, TNK )   Here are other tickers you may want to check out.  DSSI / EURN / FRO / GLOG / NAT / STNG

These stocks are very volatile.  Rather than piling into one name spread your money across a small basket of names.

Disclosure:  I bought DHT June $8 calls yesterday.  Small position. May add another name or two. Going out in time to let the trade breathe and dont plan on micro managing the position.

Sector Summary

 

Wave 2 DATA

4/21 Redbook / Existing home sales / $NFLX earnings AMC

4/22 Mortgage applications / Oil inventory

4/23 Jobless claims / New Home sales / Flash composite PMI / KC Fed MFG Index /  Natgas inventory

4/24  Durable Goods / Consumer sentiment

Charts in Focus

$WORK

WORK is working on a massive inverse head and shoulders pattern. While it’s projected measured move might be beyond expectation at 88%  I bet most would be quite pleased with half of that. Bulls ok above $21.50; bulls get emboldened below $21.50

$INSW
Marine shipper with a clean breakout working.

$TK  If price can take out the 200 ema, I like it long with a stop just below.

$TNK  Another shipper, another bullish set up. Little cup n handle working. A break above $24.50 should trigger this. Set a stop just below $24

Strategy and Tactics – Tilting bearish

No changes.  Still leaning short. Long  long gold and gold miners; long marine shippers

Positioning Update: Short IWM , repositioned in Apr 24 $121P;  Long GLD May 160 C. and  GLD May 165C ;  Long GDX  May 31C.; long DHT Jun $8 calls

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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