Daily Profit Compass Jan 28

Tickers discussed: SPY QQQ IWM FB AAPL AMZN GOOGL MSFT NFLX TSLA Sector SPDR ETFs

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 

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

  • 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

Are the Wheels falling off?

Yesterday we saw, more or less, a 3% sell off. Worst since October.   The short squeezers have been a disruptive force and have forced hedgies to re-assess and take down risk. Also the spike on the VIX doesnt help either.  That means more selling.  It does not mean we have to crater, but I think we go lower from here.  I think we will know soon whether or how hard they want to bounce it.  Will be interesting to see how much conviction is out there.  As I and others have noted, bull sentiment is at extreme highs, hedge funds are “all-in” on the rally, and lastly almost no shorts are out there to support any down move.

At this point, we’ve hit a major pot hole. We just dont know if the axle is damaged and the wheel is going to fall off yet….but we should know very quickly.

Action Activities

  • Review your positions. Know your stops and honor them.
  • Review your exposure:  You may want to reduce your own exposure.   Defense wins Championships
  • Begin to layer in some Shorts:   We are not in a “gonzo short” moment but there are emerging sell signals on certain stocks and sectors.  If you still have long exposure, having some shorts will help balance out your PnL swings.

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.

Sector Studies

Today I quickly go through the ETF’s to identify the trade locations

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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