Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA SNAP JMIA PLTR
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
Some big guns set to report this week.
Monday: XLNX, BOOT
Tuesday – JNJ, GE, MMM, DHI, LMT, AMD, MSFT, TXN, SBUX
Wednesday – BA, T, AAPL, TSLA, LRCX, FB
Thursday – AAL, MCD, LUV, TSCO, MA, V, SWKS, X, TEAM,
Friday – CAT, LLY, CVX, HON, CP
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. Trade ideas are also discussed.
Run the video at 1.25x to reduce run time.
Find the Video HERE
Economic Calendar
Busy calendar this week, headlined by the FOMC meeting and rate decision Wednesday at 2pm.
- Monday: Chicago Fed and Dallas Fed activity indexes
- Tuesday: Case Shiller / Home price index / Consumer Confidence / FOMC meeting begins
- Wednesday: Mortgage Applications / Durable Goods orders / Oil inventories 10.30 / FOMC Rate decision 2pm / Powell presser 2.30pm
- Thursday: Q4 GDP / International Trade #’s / Retail & Wholesale inventories / New Home sales / Leading economic indicators / Jobless Claims / NatGas inventories / KC fed
- Friday: Employment cost index / Personal income / Consumer sentiment / Chicago PMI / Pending home sales
Order flow Insights
$SNAP
The FlowAlgo algorithm flashed a buy on SNAP. Nearly $5M in call premium bought on 1.6x normal call volume. Popular strikes were the Feb 55 calls and Feb 60 calls with traders positioning for either a pre-earnings run into the Feb 4 earnings print or plan to hod through the event and hoping for follow thru on a good report. I like SNAP long on a breakout above $54 and targeting a move to $60 or higher ahead of earnings on Feb 4th.
$PLTR
FlowAlgo flagged this one as well as a BUY. In no doubt the monster candle had something to do with it. Over $24 Million in call premium bought on Friday on 3x call volume. To put that number in perspective $24 M would be a very nice day for SPY; in an individual name is simply incredible. There was a lot of dispersion in what they were buying. Some were a couple weeks out while others took a longer term view peppering multiple strikes. No earnings date is set yet, but likely will be mid-February based on recent mid-November print. Get long on a break of $32
$JMIA
Flow Algo BUY. One trader buying almost 12,000 of the Feb 29th 55 calls. Could have been part of a roll higher from lower strikes, but certainly shows commitment to stick with a winner. Showing Earnings for Feb 25. We are in the Feb 55 calls
A great Cheat sheet / Resource for these sectors
Top Performers of 2020
The Growing Bubble in “Bubble Watching”
Per recent Tweets, Mohammed El-Erian, the popular and well – respected market pundit, is the latest person to be sucked into the “Bubble in bubble watching” vortex. With that, let’s just do this so we can get it out of the way:
WARNING and Market Disclaimer
The market is in a bubble. Consider all monies currently in the market as 100% risk. Be prepared for both sharp moves higher and sharp moves lower for any reason, but mostly for no reason. Go forward using an abundance of caution. It is not different this time. Bubbles always pop but timing is unpredictable. Do not trade with money you cannot afford to lose.
So there…..you don’t need to waste time worrying about if we’re in a bubble. Assume that you are and act accordingly.
Trading Tips within the Bubble
- Consider reducing your overall exposure to the market to bring down overall risk
- Aggressively “roll and protect” winners to quickly and regularly book wins and maintain a more or less constant risk profile.
- For those with large common stock positions, explore selling OTM Calls to dampen downside vol shocks and somewhat insulate your holdings.
- Fully respect any technical sell signals that you identify. Trust your charts.
- Back in March, there were sell signals in place BEFORE the dramatic plunge. Those that respected the charts were not hurt as badly than those that did not.
- Don’t be afraid to mix in some shorts. There are sectors and stocks that are more vulnerable to dramatic downside moves. If you see a stock / sector breaking down, open a starter short and see how it goes. Parabolic collapses can be quite enjoyable if you are on the right side of it.
Go long Chart watching and Fade bubble watchers. You will make more money.
FATMAAN Names
In the companion video, I cover off the FATMAAN names using the daily timeframe. Some very interesting trade locations are on the horizon that will set up well for swing traders on the daily time frame.
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 hour
IWM 30 min
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