Tickers discussed: SPY QQQ IWM UUP TLT FB AAPL AMZN MSFT GOOGL FAAMG 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.
Trader’s Couch
Cultivate Flexibility
As traders, we control everything up to the point of executing the trade. Once the trade is on, we aim to control our emotions and execution of our process. The price action is out of control and that is where our fluid and flexible thinking comes in. It’s the most important factor we can cultivate once price is doing its thing. Those that cling to a preconceived idea will most often lose.
Earnings
THe paek of earnings season was last week, but still plenty to go. TSN, MCK, CHGG, RNG, TTWO, KLAC, SPCE report today
News Flow
- Congress in the cross-hairs as Covid relief impasse rolls on.
- Siemens Healthineers to buy $VAR for $16B
- Sturgis Bike Week to bring 250,000 people to South Dakota in what could turn out to be a massive super-spreader event
- ByteDance considering spin off vs sale to MSFT
- Beloved actor Wilford Brimley dies at 85
Dollar Dynamics
You can’t see it here but UUP put in a big bullish engulfing candle on Friday. Bull Set up: Price hitting it’s long term support line, Stochastics bottoming out ( lower panel ), strong seasonal strength coming into view, plus everybody and their pet rabbit short the $USD. We are poised for a “rip your face off bounce”. Would likely put the brakes on the gold and silver rally, not to mention equities. I like the idea of a long UUP position with a tight stop below the trend line. I’d go out to January with $25.50 calls. If price closes below trend on a weekly closing basis, get out.
Bond Moonshot coming?
Get ready for Pre-election Vol
Source: Cam Hui
August Angst
August can be a rough month for stocks. It’s not unusual for a rug pull. THat coupled with the graphic just above showing that its more than common that vol increases into an election. We’ve got the covid relief package mess and a big payrolls print on Friday. Plenty of reasons to be anxious or nervous here. But lets set that aside. We are leaning bullish based on the price action and we do not have a ton of positions so our exposure is in line. We can play short term bullish trades for added exposure. We can turn bearish in all of 2 min if we get a signal to do so.
Let’s maintain our bullish posture despite warning flags that may have us uncomfortable. We can exit at any time if price tells us to. As it stands, we may get another FOMO push if we break to new highs in QQQ and SPY breaks above $329.
Strategy & Tactics
Bulls in control until Bears prove otherwise.
- FAAMG – Continue to Watch closely for bullish or bearish price action following earnings.
- Covid Relief Bill and July unemployment print on Friday are the big macro factors on the board for this week.
- Markets seem poised for a FOMO run. Watch for QQQ breakout to ATH and SPY breakout above $329 to spark another rally.
- Massive GDP contraction and bump in initial jobless claims met with a collective sigh by markets. No effect.
- Risk off Assets flashing a bright yellow light but to date, yellow lights have not slowed anyone down
- GOLD / BONDs and / USDJPY currency pair are flashing a problem. Eyes wide open.
- Gold a crowded long; $USD a crowded short. A toxic sentiment mix primed for a reversal.
- 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
SPDR Sector Technical Review
30 min video that identifies the key trading locations on the indexes. HERE
FAAMG Live Annotated Charts
Video Review of the FAAMG Charts. HERE
Click on the Links to view my annotated live charts
FB Daily
AAPL Daily
AMZN Daily
MSFT Daily
GOOGL Daily
Active Trade set ups / Positions
Bold Text signals meaningful technical changes and / or potential change in an active position.
$AMD – gappy bracket trade set up; raise stops and strikes if long from lower levels
JMIA – Our baby rocketship. Keep rolling higher and booking profits as you go into earnings Aug 12. Stay long. .
$NEE – Flagging above $280 post earnings; considering fresh long entry
$DLTR – New Name. Alarm $100 for a potential gap fill $12 higher.
$COST: Flagging above support but little movement
$YETI – Looks good; stay long into earnings Thursday Aug 6
$PZZA – Make sure you get paid on this. Price has stalled and has met our technical target. Roll higher and protect / raise stops / close. Earnings date not posted yet.
$FDX – Watching for re-entry – exited last week at 173.5
$GDX – PM complex near peak FOMO and parabolic charts are due for a pause. Keep rolling and protecting your positions.
$NFLX – Taken off the board after bracket trade failed. Time to reset this one.
$CHEF – Lost $12 on Friday triggering a SELL signal; Earnings in rear view
$DDS – drifting Like it long against 22.50; but short against $22.50 on a break below. Decide how you want to play. No position yet here.
$FIZZ – Bad day at the office off 8% Friday. If you were rolling higher and protecting win; you are stopped out.
$OLLI – Active Bracket trade set up. Alarm $110 for potential breakout to fresh ATH’s; $107ish is the low side of the box.
$BBY – Active Bracket 99.50 and 95.30. Price inside the box. $5 gap below to fill. Alarm your levels
$SYNA – Active bracket but earnings Aug 5 Bracket trade set up . alarm $81 and $77. Waiting till after earnings to enter
$WMT – 20 ema test. staying long. 20ema is line in sand.
$WKHS – Vol compression now. Could break either way. Set an alarm at $13 support.
$XRT – Holding the breakout. Long against $45.50
$INTC – Price broke below the bracket. I have initiated a position in the Sept 47.50 Puts with a relatively tight stop at 49.50. Right or right out.
Index Chart Review
SPY 2 hour
SPY 30 min
QQQ 2 hour
QQQ 30 min
IWM 2 hour
IWM 30min
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