Daily Profit Compass Aug 13

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Tickers discussed: SPY QQQ IWM  GLD TLT   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 – Will Return

Earnings

News Flow

  • Another Jobless Claims Thursday. Print at 8.30
  • Apple readies “Apple One” sub bundles to boost services.
  • Meanwhile, the WeChat ban poses problems for AAPL in China. Consumers prefer the app over the phone.
  • $CSCO falls 7% pre-market as the outlook dims despite ER beat
  • Manhattan Apartment rents crater 10% as the residence exodus continues
  • Stein Mart files for Ch. 11 as old school retailer bankruptcies keep piling up. Immediate liquidation planned.
  • Record bond issuance by the Treasury being digested by the market has firmed rates.

NAZ up 2% but down volume was higher

AMZN.  We’ve got a measured move target of $3600 on a breakout.  Could be more based on this big formation.

$LQD stalls.  Note how investment grade credit is higher now that before the Covid crises. Your Fed at work.

Value hits the pause Button

The buy-the-dip crowd have charts too!  Just as SPY and QQQ touch their lower trend channel boundaries, the dipsters arrive en mass for another save. Yesterday, big cap tech took center stage as traders flooded back in after a 3 day buyers strike. If tech is winning, Value is losing. The rush into Value took the day off. Although we did make a couple small buys ( $CF, $DNKN ) I am glad that the temptation to chase the value runners was contained. Rates are falling a little this morning. Let’s watch banks and other cyclicals today.  We’ve had the “value Head fake” before. I wonder what happens this time around.  I’m willing to buy based on the chart and price action but not wholesale. I want to be selective.

Strategy & Tactics –  

FAAMG and tech surged yesterday. More to come?   IWM was soggy as Value backs off.   IWM is a good proxy for the cyclical trade. If the value trade is real, we should see IWM take out $160.

  • FAAMG – THe 60 min levels on these names have been pure gold. Use them to your advantage if you are an active traders.
  • High Flying Work-from-home:  Do traders rush in on the dip?   
  • Parabolic collapse finally hits gold / silver and miners. Still more room to downside.
  • 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

FB                  Daily

AAPL            Daily

AMZN          Daily

MSFT           Daily 

GOOGL       Daily 

 

Charts of Interest

$GLD 60 min

Gold fell sharply into the close to fill an open gap, but this morning in the premarket it is bouncing a little.  Even those that normally do not care to trade gold should alarm $GLD at $184. If for any reason gold were to rally and jump into the $6 open gap, I’d think there was an excellent chance at a gap fill to $190.  As it stands, $177 is the next big layer of support.

$TLT – 60min

$165 is a nice layer of support, but should it break, here comes $162.  As it stands, we are in the middle of the broader trading range from $159 – $171.  I think this pop in rates won’t be durable and lasting. Any moves lower in bond prices I think will be a chance to buy / build a position. The levels are very clear.

 

Active Trade set ups / Positions

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

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 Aug 12 Activity

$INTC  I finally gave up on this short. More a time thing than price hurting. Closed Sept 47.50 Puts for about a 30% loss.

$GLD  Re-entered short with Aug $180 puts. Needs to move rather quickly, if it does not, will need to exit or buy more time.

Aug 11  Activity

$IBB – opened Aug $132P   $2.32

$MNST – opened Aug 80P looking for gap fill coming out of bracket low.   $1.02

$CF – Taking a shot at Sept 40 C  at 45c.   after players hit that strike 2600x ++

$DNKN –  opened Sept 72.5 C  looking for a breakout ahead of earnings after the Sept options expiration.

$GLD  Closed puts for massive 340% win.  looking to re-enter;  – 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. Killed on Earnings off 20%. May jump back in if price pulls in to solid support. 

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

$COST:  Watching carefully. Price is lower than my exit at $340 but happy to jump back in on a good set up. Measured more target in mid $350’s

$DDS –   Earnings today I believe. 

$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

 

Index Chart Review

SPY  4 hour

Dipsters kept price in the channel. Bulls in control of this time frame.

SPY 30 min

QQQ 4 Hour

Like SPY, the Q’s are back well within the channel.

QQQ 30 min

IWM 30min

Price looks a little vulnerable below $157.50. Price could fade if the value rotation stalls or is faded.

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