Daily Profit Compass Jul 29

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Tickers discussed: SPY QQQ IWM  FB, AAPL, AMZN, MSFT, GOOGL FAAMG 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

A 20 minute detailed look at the indexes covering the daily, 2 hour, and 30 min time frames on SPY, QQQ, IWM


Massive week for earnings headlined by FB / AAPL / AMZN / GOOGL at the back end of the week.  Other noteables: SHOP / MCD / TDOC / UPS / XOM / CVX

News Flow

  • GOP Fiscal hawks ( those not facing re-election ) gum up the works on the Covid deal;  Liability protection becomes a sticking point among many
  • FOMC front runs itself by announcing the extension of it’s lending facilities until Dec 31;  The FOMC announcement is at 2pm with a presser at 2.30pm
  • Top 4 CEO’s of big cap tech representing nearly $5T of market cap hit Capitol Hill for testimony
  • The US is about to report the worst GDP report EVER.  Estimates are for a 35% or more contraction.
  • US Corona virus deaths close on 150K; nearly 50x the 9/11 death toll and 3x Vietnam’s death toll in 5 months
  • DraftKings becomes the PGA’s betting partner; 50% of the Miami Marlins MLB team has Covid

Market Ear

Is Credit card spending rolling over?  A cut in Covid benefits won’t help.

China FOMO

Traders are encouraged to keep an eye on Chinese names for trading ops. BABA / BIDU / KWEB / JD / BZUN etc

$USD/JPY Jaws open

We talked about this traditional risk-off signal over the weekend. Like all the warning flags, no one cares until they do.  Be careful out there. This jaw-opening between SPY and the currency pair has been swift and dramatic.

Time for a Macro-Driven Pivot?

Lots of macro wild cards out there. I really don’t like that $USDJPY breakdown.  THe FOMC is a wildcard. Although nothing is expected, with Powell you never really know.  Big cap tech earnings are a wildcard as well.  And while I think a fiscal covid bill gets signed, benefits appear tobe headed for a haircut. I show a graph today of credit card spending possibly rolling over. If benefit cuts hit spending is poised to move down.  Lots of macro factors at play. The technicals on the indexes are finely balanced. A lot riding on the big cap tech price response to earnings.

Strategy & Tactics 

Cautious ahead of FOMC and Big Cap Tech earnings

Benefit of doubt remains with Bulls. 

  • FOMC at 2pm – The first move is usually fake
  • Watch the FAAMGs. 
      • Earnings on Thursday looms.  AAPL / GOOGL / AMZN / FB all report after the bell.
      • Bears still have to prove it. Bears have had so many chances and have done nothing. Make bears prove they can take, then maintain, control.
      • Be cautious on overnight exposure on Thursday. 
  • Risk off Assets flashing a bright yellow light. 
    • GOLD / BONDs and / USDJPY currency pair are flashing a problem.  Eyes wide open.  No impact yesterday.
  • 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

FAAMG Live Annotated Charts

Annotations updated  THursday  Jul 29.

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. 

$AMD –  Big pop on earnings beat; if you are long, at a bare minimum raise stops and strikes.  

JMIA –  Continues to recover after announcement of secondary offering.  Targeting $11 for an exit ahead of earnings Aug 12. i have one eye on the clock.

$NEE – Holding $280 after earnings; watching for re-entry as earnings have now cleared.

$DLTR –  New Name. Alarm $100 for a potential gap fill $12 higher.

$COST: Emerging above its bull flag after breaking out.  Looking for higher

$YETI –  Holding above the breakout. Bought the Aug 45 Calls, looking for a pre-earnings run. up 2.5% yesterday and moving higher. Closing position ahead of earnings on Aug 6 no matter what.

$PZZA –  Make sure you get paid on this. Price has stalled and has met our technical target. Roll higher and protect / raise stops / close.  Earnings date not posted yet.

$FDX – Holding recent breakout

$GDX –  PM complex near peak FOMO and parabolic charts are due for a pause. Keep rolling and protecting your positions.

$NFLX – Bracket trade busted as price returned to inside the bracket; the immediate set up was foiled. 

$CHEF – Testing key support at $12 but with earnings days away, letting that pass before stepping in. $12 alarmed for a downside break

$CCL – Broke key support. Opened a tiny position in Aug 7 $14 Put

$DDS –  new name off the radar flyer.  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 –  Roll and protect if long; very defensive name but i’d make sure getting paid is part of your plan.

$ICE – Holding breakout above 94.  Could have room to run.

$OLLI –  Alarm $110 for potential breakout to fresh ATH’s

$BBY – Bracket 99.50 and 95.30.  Price inside the box.  $5 gap below to fill. Alarm your levels

$SYNA – Still in bracket/ Earnings Aug 5  Bracket trade set up . alarm $81 and $77.   Time is short before ER. May have to wait until after earnings to enter

$WMT – continues to consolidate above the breakout level. stay long

$WKHS – Set an alarm at $13 support.

$XRT – Holding the breakout. Long against $45.50

$INTC – Price broke below the bracket. I have initiated a position in the Sept 47.50 Puts with a relatively tight stop at 49.50. Right or right out.  

Index Chart Review

SPY 30 min

QQQ 30 min

IWM 30min

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