Daily Profit Compass August 5

Tickers discussed: SPY QQQ IWM  FB AAPL AMZN MSFT GOOGL FAAMG Update   Open position 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 – Will Return

Companion Video

20 min video covers the 2hr and 30min timeframes on SPY / QQQ / IWM.  Significant technical developments have happened that changes our trading posture.  A few trade updates are also discussed.

Earnings

The peak of earnings season was last week, but still plenty to go.

News Flow

  • Beirut blast kills hundreds as authorities conduct desperate search for survivors and answers
  • $TDOC / $LVGO agree to merge in $18.5B deal.
  • Gold continues to rock
  • China / US agree to more high level trade talks.
  • Equity Fut’s plumb new all – time and fresh relative highs

Another breakout; another Green Light

The fresh breakout removes technical doubts about price getting stalled below the highs. Now price has proven it can go higher and has given us fresh lines to shoot against on the long side. THe details are in the video. Long story short, we now objective reasons to be more bullish, and we’ll express that opinion by selective adding to longs with the confidence of knowing exactly where the break out should hold if it is to be durable and lasting. We’ll also know when / if it turns out to be fake.   Big macro prints tomorrow and Friday could turn this on a dime, but we need to trust price here. It has spoken.

Strategy & Tactics –  Renewed bullish posture. 

Fresh break outs are bullish. Now we have clean likes to shoot against across all the indexes.

The new levels become key reference levels for us going forward.  

  • FAAMG – Continue to Watch closely for bullish or bearish price action following earnings.
  • Covid Relief Bill, initial jobless claims, 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.   Check…..we got this yesterday
  • Massive GDP contraction and bump in initial jobless claims met with a collective sigh by markets. No effect. 
  • Caution on GOLD / SILVER appears to have been wrong as FOMO rages. Tough to set in long here.  It’s like buying JMIA at $22 yesterday. When ever this collapse / pulls back, it will be fast. Be sure you are rolling and protecting your profits.
  • 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

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. 

$TLT – Initiated Sept 170 Calls on Aug 3 >>>>> Rolled to Sept 4 TLT 172 calls at the bell Aug 4

$UUP – Initiated Sept UUP Sept 25.50 calls  Aug 3    looks like a fail. Will post if i exit

$AMD –  gappy bracket trade set up; raise stops and strikes if long from lower levels

JMIA –  Game over for now; Parabolic collapses are never pretty, but quite pleased at how we managed the trade. While other were jumping out of windows, most of our massive gains were safely in the bank.  Let’s continue to watch through earnings for a potential re-ramp.   Nice job traders 

$CCL / RCL / NCLH  Cruise lines getting soggy again and outright sell signals close

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 –  Closed for $6 win;  Earnings Thursday Aug 6  BMO   Please exit today if you are still in

$PZZA –  Closed for $10 Win. EARNINGS AUG 6 BMO  ; Please exit today prior to earnings

$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 – Price in the $25 OH gap.   Stay long against $405

$SAVE – Stopped out because i failed to realize earnings were monday AMC.   Process FAIL >>> Bad trade >>> no excuse for not knowing when earnings was. 

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 –   We are out 

$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

$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 – Raise stop to $47.  We’re long against 45.50

$INTC –  I have initiated a position in the Sept 47.50 Puts with a relatively tight stop at 49.50. 

Index Chart Review

SPY 2 hour

SPY 30 min

QQQ 2 hour

QQQ 30 min

IWM 2 hour

IWM 30min

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