Daily Profit Compass April 27

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Tickers discussed: SPY QQQ IWM CSCO INTC CSX CYBR HAS IBB  Strategy & Tactics

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

Positive visualizations build fortitude

Identifying, then visualizing, worst -case scenarios and how you would positively handle them is a constructive exercise. Worrying however reinforces a sense of helplessness and hopelessness in the face of those problems.  If you visualize yourself successfully dealing with those potential worst-case problems, it will build confidence and inner fortitude if / when those challenges present themselves.

Earnings

GOOGL on Tuesday AMC   MSFT / FB Wednesday AMC   AAPL / AMZN Thursday AMC   plus lots of other notable names this week.

News Flow

  • BOJ scraps bond buying limits and goes into ludicrous mode saying it will buy as many as needed.  Asian markets cheer; US Futures follow Asia higher
  • Boris Johnson goes back to work. Encourages UK to remain locked down.
  • Cuomo contemplates phased in re-opening plan beginning in Mid May.
  • Meat shortages loom as meat packing plants continue to close. Price spikes coming to a store near you soon.
  • Sen Tom Cotton says dont let Chinese students study STEM in the US
  • Shocker:  US ” Small Business” Loans didn’t go to the companies that needed it the most
  • Oil backslides below $15 with prices off 13% premarket
  • Hong Kong has spent over $1B to defend $USD – HK Dollar peg.  Kyle Bass and others see the HK peg to crack sooner vs later.
  • VIX drops below 40

Walking a Tightrope

I am growing a little tired of talking about price in this spot. I guess it’s normal to become a little bored during a consolidation after a period of high volatility where every moment of every day brings a tradable move. All the more reason to remain patient and not force a trade that is not there.  The market is finely balanced like a man walking a tightrope. It wont take much to pop the overhead resistance just as it wouldn’t take much to roll this bounce over. I dont think it makes sense to go out on a limb either way. The trend is up so I think the bulls remain in control until price tells us otherwise. Stay patient out there. Plenty of time to jump on the next leg higher or lower.

“Through no Fault of their Own”

Throughout this COVID episode, I keep hearing the phrase “through no fault of their own”.  Doesn’t matter if its Airlines, hedge funds, Boeing, Restaurants, Cruise lines, or any other business segment you care to list. My question is is it ever anyone’s fault?

  • Who’s fault was it in 1973 when millions were laid off as a result of the oil embargo?
  • Who’s fault was it in 1982 when many of my college friends could not get jobs as the Fed was turning the screws against inflation causing a recession?
  • Why did I have to get laid off in 1987 when the stock market crash caused a contraction in semiconductor demand?
  • What about the recession caused by the dot com bubble crash?  Who’s fault was that?
  • Who’s fault was it when millions, who had nothing to do with Wall Street, lost their homes during GFC 1 ?  Nobody hinted at bailing out all these people because it was “no fault of their own”
  • Covid was a catalyst, just like there was a catalyst in all the other prior downturns

I am not saying there should not be help to distressed industries, but let’s stop with the “through no fault of their own”

Sector Summary

 

Wave 2 DATA

4/27 Dallas Fed Survey

4/28 Redbook / Case-Shiller / Consumer Confidence / Richmond Fed Survey / FOMC Meeting starts

4/29  GDP / FOMC Announcement 2pm w/ Presser

4/30 Jobless claims / Personal Income / Employment Cost index / Chicago PMI

5/1 PMI Mfg Index / ISM MFG index / Construction Spending / Rig Count

Charts in Focus

For all the charts on individual names, please check for earnings release dates!!

Not going to post all the FAAMG names, but all may see a positive run up into their earnings prints. Keep them in focus if you’re a nimble, active trader.

$CSCO

Price consolidating just below $43 which coincides with thew Dec 2019 low.  A break above $43 targets the 200ema at $45ish, then $46.50.

$CSX

Price consolidating below $64. A breakout targets $68 as a first objective. Set an alarm at $64. Earnings have already been released.

 

$CYBR

Many many charts out there that look like this. A rally up to key resistance and consolidating below. Alarm 97.50 on the long side and 92ish on the low side. As simplistic as it sounds, this stock will either break out or it wont. There is $10 of upside on a breakout.

$HAS

Price pinned just below the 50ema at $75. A breakout above targets $80, then 87.50 as T1 and T2

 

$IBB

Price flagging above support at $123.50 / $124.  Pretty objective place to get long with an open path to higher prices.

$INTC 60min

We had a nice gap fill trade Friday. If price can pop the down trend resistance line, T1=61.25 and T2 = 63.  A breakdown below $58.50 would favor a move back down toward $56

Strategy and Tactics – Neutral

Lots of bullish charts out there but have yet to trigger. Content waiting for either a breakout or a breakdown w/ all FAAMG names reporting this week. I covered my IWM short on Friday. Very light on positions. Long gold and gold miners; long marine shippers

Positioning Update: Long GLD May 160 C. and  GLD May 165C ;  Rolled GDX  May 31C to May 35C ; long DHT Jun $8 calls

Index Chart Review

SPY 2 hr

SPY 30 min.

QQQ 2 hr 

QQQ 30 min

IWM 2 hr

IWM 30 min

 

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