Tickers discussed: SPY QQQ IWM Commodities WW ZBH 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
If events in either your trading life or your life outside the charts knock you off-center, return to gratitude. 99% of the people on this planet do not have money to trade or invest. Get over your bad trade or whatever is bugging you by being thankful and deeply appreciative of what you’ve got. This approach will quickly re-center and stabilize your core and then you’ll be better able to tackle whatever it is in front of you.
Earnings
News Flow
- The Fed is seen holding rates at 0 for 5 years in new policy.
- Violence in Kenosha intensifies as 2 fatally shot.
- Hurricane Laura rapidly grows to Cat 4 storm
- Cloud Sector sees lift thanks to $CRM blowout
Got Diversification? Commodities come to Life
A great place to find truly non-correlated assets as inflation and demand pick up. More in-depth coverage coming soon.
Pausing for Powell
Jerome Powell speaks from Jackson Hole tomorrow . It is a traditional venue where any new thinking about monetary policy is presented. It has been widely circulated that Powell will make some kind of announcement about inflation and how the FOMC is thinking about it. Powell is growing into this job and I think he know knows what to do to keep markets inflated. Hard to see any policy decision derailing the market before the election, but for whatever reason, the market often fades Powell no matter what he says. Expecting more of a quiet drift higher into the speech tomorrow. Be ready for anything, but that’s the expectation. Speaking of pausing, the great rotation to value paused yesterday. They stopped piling into Airlines, cruise lines, hotels, banks etc. Keep an eye on these sectors for clues.
CRM had a big lift yesterday on the DOW inclusion plus they knocked the cover off the ball on earnings after the bell. Will probably lift cloud names and tech in general.
Strategy & Tactics
No Changes – Maintain Bullish bias; be cognizant of the many yellow flags
- 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
Charts of Interest / Trade Ideas
$WW – Weight Watchers
Nice well-defined range with price at support. A break below $23 would send this tumbling lower toward a measured move target of $18. A breakout above $28 should open the door to the low $30’s. Another option is to BUY it here at support and look for a move to the top of the box …..a $5 move aint all bad.
$ZBH
Consolidating nicely under key resistance at $140. Alarm $140 and when it triggers BUY it. My expectation is a run to the prior high at $160 but may see a hesitation at $150 where there is a small layer of resistance.
Active Trade set ups / Positions
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AUG 25 Activity
NIO – Bought on breakout above $16.
PINS – Stopped for 30% loss. Nice idea, wrong result.
Aug 24 Activity:
TWTR – Opened Sept 41 C for $1.73 on breakout
PINS – Opened Sept 32.5 puts at $1.83 on a breakdown from a consolidation range and into a wide open gap.
Aug 20 Activity:
XRT- Extreme bearish order flow has again picked up with big players shooting against our long position. In the face of soggy retail numbers and the bearish order flow we closed the Sept 50 Calls for $3.05
$V Rolled stops to breakeven
Aug 19 Activity:
Trade Idea to get long $V at the money Sept Calls against $200.
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.
$GLD Closed puts for massive 340% win. looking to re-enter;
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$UUP – Initiated Sept UUP Sept 25.50 calls Aug 3 looks like a fail. Will post if i exit
Index Chart Review
SPY 30 min
QQQ 30 min
IWM 30 min
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