Daily Profit Compass Aug 19

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Tickers discussed: SPY QQQ IWM  FB AAPL AMZN MSFT GOOGL TLT GLD   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 

Livermore – Don’t fight Conditions

Take advantage of price movement; Don’t argue with conditions; Don’t shoot against it; Don’t get spread too thin….depth of focus trumps breadth.  In 2 simple, plainly spoken paragraphs, Livermore gives us an outline to make money.  HINT:  Trying to call a top and trying to short it are the exact opposite of what Jesse suggests.  We are in a moment of unprecedented “conditions”. Recognize it, take advantage of it, be smart about it and keep your feet on the ground.

Companion Video

The 27 min video covers the indexes, FAAMG names, TLT and Gold.  Running the video at 1.25x will reduce run time.

 

Earnings

Breakout

SPY popped to new highs and QQQ forged higher as the growth / tech trade resumes and the value trade languishes ( IWM ).  While there are so many yellow flags present, I think we have to trust price and maintain a long bias until we get a price signal to either go flat or bearish. I’d keep overall positioning at a comfortable level and not get too far out over your skiis. Participate yes, levered to the hilt, no.  Plenty of active trading ops to capture long side exposure with defined risk without the need for big swing positions.

With new highs having been achieved we now have new levels to shoot against. With no natural sellers above, we could be in for an extended run higher. Maintain as best you can flexible and fluid posture open to both a run higher and / or a surprise rug pull.

Strategy & Tactics –  

  • FAAMG – THe 60 min levels on these names have been pure gold. Use them to your advantage if you are an active traders.
  • 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 Aug 17

FB                  Daily

AAPL            Daily

AMZN          Daily

MSFT           Daily 

GOOGL       Daily 

 

Charts of Interest

$GLD Daily

To put it simply, I think the recent upswing in Gold was a purely technical move as a reflex reaction to the big gap down. These quick moves to back fill the gap are common technical moves. I expect price to be rejected at $190 and begin moving back down. I am looking for a move down into the $177.50 are.  If I am wrong and price clears $190 and holds it, you can buy it and set a stop just below and look for a re-test of the prior high near $195

GLD 60 min

Here is a closer look on the 60min chart. $190 is an objective level to try a short w/ a stop just above. If price pops $190 and holds it, BUY it and look for 194-195. Now that the gap is all but filled, I favor a move lower.

 

$TLT – Bonds

Bonds are at an interesting spot / inflection point at $165.  THe big down move has been largely uncorrected. I dropped in the fibs for reference. If price pops $165 I think it can run to the 38% or 50% fib levels. From a TA standpoint, you can be long against $165 with a move above.  I’d favor a move to 167.50 where the 50% fib and technical resistance lies. If price makes it that far, it would be a great place to initiate a short given the half back entry.  THat is a lot of scenarios.  It all starts with a move above $165 for price.

Active Trade set ups / Positions

++++++++++++++++++++++++++++++++++++++++++++++++++++

Aug 18 Activity – None

Aug 17 Activity – None

Aug 14 Activity – None

Aug 13 Activity

$XRT – Sept 50 C ; Closed 1/2 of position.  Entered Aug 5 at 1.90; closed at 2.90.   On the other 1/2 of position sold Sept 53 C for $1.20 credit.  These moves were prompted by extreme bearish order flow into the Aug 28 exp $51 puts over 15,000 x.  Retail Sales and Retailer earnings forthcoming.

EBAY  Opened Sept 60 calls. $1.23. Looking for a move back to the highs

$IBB Closed short position for a small loss.

 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

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

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

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

 

Index Chart Review

 

SPY 4 hr

SPY 30 min

QQQ 4 hour

QQQ 30 min

IWM 30 min

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