Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA TLT CRM SPLK CIEN
The Daily Profit Compass provides stock market technical analysis for the stock market today and is focused on the indexes and FAAMGs. Key levels and trading locations are provided, along with trading plans and timely commentary to keep you on the right side of the trade.
Earnings
Companion Video
The video is a detailed technical review of the indexes, FATMAAN names, TLT, and several charts of interest for your trade funnel. All the key trading levels are identified along with commentary and trade plans for each ticker.
Run the video at 1.25x to reduce run time.
Find the Video HERE
Market Snapshots
Ever-present Wall of Worry
There are always lots of things for both we and the market to worry about. Covid cases count, death count, Bull sentiment extremes, GA Senate Elections, Stimulus package timing and amount, FOMC moves next week, and now we have fresh BREXIT worries as yet another deadline / deal fall apart. The Brexit news knocked 20 handles out of SPY. My philosophy remains the same. Nobody will be able to unravel that knotted ball of yarn to figure out the next market moves. Trying to do so will result in frustration, wasted time and wasted opportunities.
Instead keep your framework simple. We are at all-time highs ( bullish ) but those highs come with unsustainable bull sentiment. The market is fully capable of giant red bars at any time for any reason or no reason. Address the environment this way.
- Be defensive. Keep total market exposure at levels where you both feel comfortable and where 2 bad days wont cripple you.
- Roll and Protect Winners. Get a nice win? Roll your strikes higher to book the win and stay long. Nasty bars wont sting as much when your money is in the bank
- Raise stops. As price advances, raise your stops and honor them if hit.
- Make price take you out. The objective of any trade is to stay in your winners as long as possible. Don’t arbitrarily take yourself out of winning trades because you are scared of a rug pull. Make price take out your stop. That is an objective reason. We may rally hard into year’s end and we want at least some exposure to that possibility. Stay in strades that are working. Jettison those that are not.
Bonds testing support
TLT is coming into the $154 area which is key support. THis area corresponds to the 10 year yield of about 1%. Things may move quickly on the reflation front if yields moves above 1% and you may see bonds spike lower. Even if you dont trade bonds, keep your finger on the pulse of price here, especially if you are in reflation trades. Banks / cyclicals / re-opening names
INDEX CHARTS
SPY 2 hour
SPY 30 min
QQQ 2 hour
QQQ 30 min
IWM 2 hr
IWM 30 min
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