Daily Profit Compass Aug 11

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Tickers discussed: SPY QQQ IWM  FAAMG Update  BABA JD KWEB MLCO GDX GLD Open position update 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.

Companion Video

The 23 min video covers a technical review of the indexes, FAAMG, several trade ideas, Gold and Gold miners.

 

Earnings

News Flow

  • Trump said to be considering a cut in capital gains tax.
  • Dimon, Bezos pledge to hire 100,000 New Yorkers
  • $CRM unloads stakes in $ZM and $DBX for a tidy profit.
  • Before a Covid vaccine has even been developed or proven safe and effective, they’re telling us most Americans won’t be able to get it until Mid 2021.
  • With the city streets in turmoil, Seattle’s female, African – American Police Chief quits after the city council slashes funding for the police.
  • Internet searches for “Covid / Corona” hitting the lows

Gold Sentiment at the Highs

Disc. – I am short GLD

As $USD positioning remains a crowded short

Disc. – I am long $USD

Bond Yield / Equity Jaws wide open

Value – Real Deal or just another Trap?

I’ve been skeptical of the value trade the last 2-3 times we’ve had 1 week pops that end up being faded. Maybe for that reason I did not pile in yesterday. If it’s real we have plenty of time to find objective entries.   Industrials did really well yesterday. One name I am sick about is FDX. I exited just before the moonshot. They say no one ever went broke taking profit, but I disagree. You need the moonshots to erase mistakes and I have seller’s remorse. Nothing to do but find the next one.  Anyhow, the challenge is finding the good set ups. Several are pointed out in the video. More coming your way soon.

Strategy & Tactics –  

QQQ is soggy. As great as the value trade might be, if FAAMG rolls over or stalls, the sheer market cap will make it tough for SPY to simply run away. IWM has the tailwinds if Value goes on a run. 

The new levels become key reference levels for us going forward.  

  • FAAMG – Continue to Watch closely for bullish or bearish price action following earnings.
  • Markets seem poised for a FOMO run. Watch for QQQ breakout to ATH and SPY breakout above $329 to spark another rally.   Check…..we got this yesterday
  • Massive GDP contraction and bump in initial jobless claims met with a collective sigh by markets. No effect. 
  • Caution on GOLD / SILVER appears to have been wrong as FOMO rages. Tough to set in long here.  It’s like buying JMIA at $22 yesterday. When ever this collapse / pulls back, it will be fast. Be sure you are rolling and protecting your profits.
  • Staying bullish does not mean complacent
    • Stay vigilant! Ratchet stops / Strikes higher on your winners and keep exposure at manageable levels.
    • Dont be afraid to go short if you get a price signal; especially if you’re holding a bunch of longs. You’ll like that balance on red days. 
    • Mark clear levels on your holdings for exits; honor those levels on a pull back.
    • You know they can pull the rug at any time for no reason at all.
  • Stay Fluid and flexible in both positions and thinking; Dont lock in on Narratives.
  • Expecting a hi-vol summer with Covid and political headlines whipsawing markets

FAAMG Live Annotated Charts

Click on the Links to view my annotated live charts

Updated August 10

FB                  Daily

AAPL            Daily

AMZN          Daily

MSFT           Daily 

GOOGL       Daily 

Bonds reach a key trade location

Price has reconnected with the low side of it’s rising channel. If it holds the expectation is for a return to the 171.50 area at a minimum. A break below the channel and $167.50 is first support. More importantly, if the channel breaks it could be the start of a deeper pull back. Below 167.50 lies 165 as next support.

 

Checking in on Chinese Internet

$BABA

Flashing a potential double top look with bearish divergences on the 2nd peak. A break below 245 sends it to support at 230 where I think it will be met with dipsters. $230 is a very objective BUY location as it is the original break out level.

$JD

Internet retailer JD is consolidating in a $7 – $8 Range. What grabs my attention is the massive volume / price void between $58 – $45.  Any break below the box may move fast. Almost no support between $58 and the 200ema at $48.  If the stock were to break out, the measured move target is around $72.

$KWEB

KWEB is an ETF with a basket of Chinese internet stocks. Looks like another potential double top. To my eye, a break of the 50ema sends it to the 200ema for a test.  Price is in no man’s land right now. Alarm the edges of the box at $71.50 and $63.50 for an actionable trade location.

$MLCO

Chart looks constructive as the Casino operator makes a push back up into the pre-covid value range. I see T1 up around $22-$22.50 and T2 at the high end of the range at 24.75. I think you can be long against $18.75

Active Trade set ups / Positions

Bold Text signals meaningful technical changes and / or potential change in an active position. 

$GLD  Bot GLD Aug 14 $190 P  Aug 7

$UUP – Initiated Sept UUP Sept 25.50 calls  Aug 3    looks like a fail. Will post if i exit

JMIA –   Earnings Aug 12. Will pick up ball after that.

$DLTR –  New Name. Alarm $100 for a potential gap fill $12 higher.

$COST: Closed for a nice win on Friday at $340 …. Monster break out. We are long against $322.50.  Measured move target is $357. Stay long. Manage risk.

$GDX –  PM complex near peak FOMO and parabolic charts are due for a pause. Keep rolling and protecting your positions.

$NFLX – Price flirting with the $25 OH gap at 405.   405 is an important pivot. Trade as you like. Ops on both sides. 

$DDS –   Did you pick some up?   Up 20-25% in just a few days.  Like it long against 22.50; but short against $22.50 on a break below.

$OLLI –  Watch for downside bracket break or potential long. Active Bracket trade set up. Alarm $110 for potential breakout to fresh ATH’s; 

$BBY – BRacket Buy Trigger yesterday. Active Bracket 99.50 and 95.30.  

$SYNA – Active bracket but earnings Aug 5  Bracket trade set up . alarm $81 and $77.   Waiting till after earnings to enter

$WKHS – Vol compression now. Could break either way. Set an alarm at $13 support.

$XRT –  We got long against $45.50; with the stock near 50 we Rolled up from August 45 Calls to Sept 50 calls and raised stop to 48; staying long

$INTC –  Not working. Any daily close above $49.50 and we are out. We’re in the Sept 47.50 Puts

Index Chart Review

SPY  2 hour

Price within a narrow rising wedge. A move above $336 is a place to reset.  Move up stops and strikes as price advances.

SPY 30 min

QQQ 4 Hour

Price squarely in it’s uptrend channel. Low $280’s possible if price reaches the top of the channel

QQQ 30 min

IWM 4 hour

If price can punch through $160 it opens up a path to $167.50. If price does break above $160, its a great place to re-calibrate and move up stops and strikes.

IWM 30min

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