Daily Profit Compass August 24

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Tickers discussed: SPY QQQ IWM  BABA NIO  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 

Complex has the added feature that it SELLS much better than simple does. That why is trading programs and consultants in general often make what they are doing seem much more complicated than it is. That plants the seed in your brain that you cant figure it out without their help. Or you’ll make a ton of money if you buy their program. Take this example: Website A  tells you to click a button for $1500 for the answer you seek.   Website B tells you to click on a FREE post which outlines a simple solution to your problem.  Most people deduce website A must offer more value because no sane person would give away valuable information for free.

Create a Simple Trading Process

A simple process is a repeatable process. A simple process is one you can regularly execute. A simple process strips away the un-necessary information that clutters the view of what is truly happening. A simple process will yield better results than a complicated one. Work hard on boiling your thoughts and process down to its essence. Clean, sharp, and crisp. Good things will happen in your trading; Let me know how it goes.

Companion Video

The 19 min Video coveres the indexes, FAAMG names and a quick look at SMH.  Run the video at 1.25X to reduce run time.

Earnings

News Flow

  • Global futures pop on Covid Treatment hopes
  • ByteDance set to file a lawsuit against the White House on Divestiture order
  • Meanwhile ByteDance investors seek to bid on TikTok assets
  • Gulf Coast residents brace for 1-2 Hurricane punch
  • FOMC on Deck
  • RNC Convention set to kick off.

The Profit Compass says stay long

Be aware of the many yellow flags, but remain focused on price. Both SPY and QQQ are within their rising 4 hour channels and are therefore in uptrends.  FAAMG names remain the key drive. As long as they remain strong, it will be hard to break the indexes.  Favor Growth over Value.  The great rotation to cyclicals and value have been head fakes so far. That may change, but until it does, not a buyer of value and IWM.

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

Charts of Interest / Trade Ideas

$BABA Daily

Love the set up. A break out from the $20 wide consolidation box at $265 a move to $285

$NIO

$16 and $11 are the locations of interest; alarm them both. The 2 month consolidation will allow this momentum name to rest.  Let’s be ready for the break out or breakdown in this name. Great opportunity regardless of which way it goes.

Active Trade set ups / Positions

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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;  – Bot GLD Aug 14 $190 P  Aug 7

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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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