Tickers discussed: SPY QQQ IWM TLT GLD GDX CAR CYBR KRE JPM
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 – Embrace Uncertainty
Replace the word “Learning” with “Good Trading” and the above quote could have come from any one of the Market Wizards. If you’ve been following along for any length of time you should be detecting the good trading psychology revolves around certain themes. Embracing uncertainty is certainly one of them. If you have not done so read “Trading in the Zone” by Mark Douglas. The vast majority of the book is centered on uncertainty and playing probabilities. If you don’t want to buy it, shoot me an email and I will forward you a pdf copy of the book.
Earnings
Intel reports after the bell. An important bell weather for semis and tech in general.
News Flow
- As the GA Governor begins to re-open their economy, Trump advises “it’s too early”. Was Trump for re-opening the economy before he was against it? Getting weird IMO.
- Intial Jobless claims print at 8.30 today
- The ECB ponders a 2T Euro fiscal bazooka.
- Many brokers limiting retail traders to “close only” orders on USO and other oil related positions.
- CTFC opens insider trading investigation regarding suspicious oil trades ahead of the Mar 8 OPEC + meeting. Illicit gains may have netted hundreds of millions of dollars.
- Secret Santa Mnuchin says “We need to spend what it takes to win the war” in response to McConnell’s growing skepticism of bailouts for states as the US debt for 2020 reaches toward $4T
- Casino stocks lift on LVS earnings surprise
- More headaches for $ZM as Daimler, Ericsson, and BoA advise against using the popular video conferencing app.
Gold Shines
Gold is so weird; it beats to the tune of its own drum and Lord help those who try to figure out the why’s and what-fors of its day to day wiggles. On yesterday’s risk on rally gold and the miners decide to put in a monster candle. Welcome news to our long positions. Gold, and by extension, the gold miners are in primary bull markets. I like the idea of accumulating both on dips. No need IMO for some big overweight position; keep position sizing inline with what ever you’d do normally. Let it grind away in the background. Gold futures are up almost 1% in the premarket.
Elsewhere, after 2 days of selling, equities had a bounce back day with green across the board for the indexes. QQQ continues to outperform as buyers stepped into FAAMG names. I may sound like a broken record, but unless / until FAAMG names crack, the market averages wont go down even though under the surface certain stocks or sectors may struggle. Just too much market cap in the top 5 for lesser stocks to have much of an effect. To put it in perspective, someone was saying AMZN had a larger market cap than the $DAX. Unreal. As I write this, futures are flat ahead of th initial claims print at 8.30. No doubt we’ll see something on the order of 3.5- 5 million new claims. We’re already sitting on 22 million over the last 4 weeks.
We remain at / near the top of the recent rally’s range. Now its a waiting game to see if the bulls have any power left to pop the overhead resistance or if the bears decide to mount some selling pressure like Monday or Tuesday. Still anyone’s ball game.
Sector Summary
Tech goes from worst to first after 2 days of selling pressure. What hasn’t changed is Financials which have been stuck in the bottom third for what seems like weeks.
Wave 2 DATA
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
$TLT 60 min
I favor accumulating on dips towards the lower end of the risk range. IMO TLT holds its bid over the foreseeable future. All bets off below $163.50 as the chart would flip bearish with lots of downside should that happen.
$GLD and $GDX Daily charts
Nice rallies for both just as faith was waning. Stay long; accumulate on dips. Gold is in a primary bull market.
$CAR Daily
Price broke below trend triggering a sell signal. Target is prior low. Set a stop at $13ish
$CYBR Daily
A break above the 50ema and 97.50 gets price on the “right side of the chart. Bears should pay attention as well. If this is going to fail, its right here.
$KRE 60 min
It’s not secret banks have been weak. Here price is grinding with a triangle. A break above or below trigger a long or short entry. Early bears may want to consider a break into the gap below as an entry point
$JPM Daily
I am glad Jamie Dimon is getting better but his stock is still sick. Horrid price action after earnings has price testing the bottom of the bear flag. A break below would target a back test of the recent low. Set an alarm. The indicators favor a move lower. THe RSI never cleared 50 and the PPO is flattening below the zer0 line…both bearish looks.
Strategy and Tactics – Tilting bearish
No changes. Still leaning short on IWM, Long gold and gold miners; long marine shippers
Positioning Update: Short IWM , rolled position to May 1 119P, Long GLD May 160 C. and GLD May 165C ; Long GDX May 31C.; long DHT Jun $8 calls
Index Chart Review
We have not looked at the daily charts in a while. Here is a refreshed view with some commentary. Follow the annotations on the charts.
SPY Daily
SPY 30 min.
QQQ Daily
QQQ 30 min
IWM Daily
IWM 30 min
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