Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA
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 and FATMAAN names. 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
Stretched
The Vaccine boost from early November plus a nice Santa rally have most markets in a stretched and technically overbought technical position so some caution is warranted. That caution can take the form of using call spreads instead of straight calls, rolling higher as calls go in the money to book profits quickly, Scaling back to certain degree on your overall market exposure, and / or blending a small percentage of short positions into your over all mix. For the shorts, I am not talking about trying to pick a top and shorting highs, look for weak stocks that have rolled over and short into demonstrated weakness. Remember Jesse. BUY on a rising scale; SELL on a declining scale. For whatever reason, FDX is a name i am watching. Price broke key support on Friday and looks poised to make a run lower to the 200ema. I got a nice scalp on Friday. Looking to re-enter short if the set up presents itself.
NYMO and NAMO, two of my go-to oscillators for OB / OV market conditions are right in the middle of their ranges, so no help there. THe % of stocks over their 20ema is pushing the upper limits of historical ranges so some backing and filling can be anticipated but what I want to do is watch price above all else. Keep your stops fairly tight and respect them if hit. I think if a correction gets going , it could be a quick event vs limping lower. THink a few 2% ++ down days in a row kinda thing. Just guesses of course. Keep your head on a swivel. IWM is the index that is the most overbought and extended.
January OPEX is Friday
OPEX weeks are usually bullish, but then the week following OPEX can be bearish as gamma pinning action rolls off. Adding to the potential for a green week is the fact that the “stimmy” monies are hitting accounts. Traders are reporting many got last week. I got mine on Friday. This may give retail fresh ammo to buy more calls. The broad participation by retail has been confounding the pros and if we are in the midst of a parabolic blow off top of some kind, we want to participate as best we can, but with some guard rails.
INDEX CHARTS
A detailed walk-through of the levels and trading strategy for the indexes is given in the video ( link above) . The static charts are provided for reference. The FATMAAN names are also reviewed in the video
SPY 2 hour
SPY 30 min
QQQ 2 hour
QQQ 30 min
IWM 2 hr
IWM 30 min
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