Daily Profit Compass July 1

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

Know who you need to become

“The successful trader that you want to become is a future “projection” of yourself for you to grow into”    Mark Douglas, Trading in the Zone

Our mentorship workshops kick off tomorrow and I am stoked to get started working with the team. One of the things that we’ll be working on is defining the “projection” that Douglas refers to. You have to be able to hold in your mind’s eye the trader you want to become. Once your “future trader projection” is formed, then the task becomes breaking down all the necessary elements that it will take for the trader to grow into that vision. The idea that “thoughts are things” is real. If you can’t imagine it, there’s no way to achieve it.  Nicklaus always “ran the movie” before every golf shot. Imagining the flight of the ball; imagining it landing in the perfect spot. Likewise, each trader needs to run the movie of the trader they want to become. Once done, its all about execution.

SPY July Seasonality is Bullish

An 8 year seasonality study shows that July has been historically bullish. Looking ahead to August, not so much.


Sector Snap Shot


News Flow

  • USMCA trade deal does into effect amid the deep recession.
  • Dr. Fauci offers dire warning that Covid infections could soon reach 100,000 a day.
  • Founded in 1962, NPC which operates 1225 Pizza Hut and 385 Wendy’s franchises files for bankruptcy.
  • Trump pledges to veto the defense bill to keep Confederate base names
  • China wastes little time implementing its new “Sword of Damocles” HK security law. 7 protesters arrested
  • Gold continues to flirt with $1800; highest since 2011
  • Airbus cutting 15,000 jobs
  • NOTE:   Holiday Shortened Trading Week. Markets closed Friday.  Be aware of non-standard weekly expiration that will be on Thursday.

Market Snapshots

Gold Seasonality

Gold is entering a historically bullish couple of months in July and August.  In the study below I looked at 10 years.

Gold Miner Seasonality

Similarly, gold miners have done well in July and August.

Q3 Kickoff

So, we kickoff Q3 today.  The forward visibility remains foggy as re-openings stall and the lack of clarity on policy are front and center.  Seasonality suggests July is a good month for equities but I’d expect markets will get jittery if it looks like the PPP program and extra Covid unemployment benefits roll off without an extension.  We’ve got to push the headlines and the laundry list of worries off to the side and focus on the price action. Figuring out the macro landscape is an impossible task.   The precious metals look strong and they too have great seasonality in July and August. We are on board early. Hopefully Gold can put $1800 in the rearview mirror and we get a little FOMO burst as others see the move forming.

 Strategy and Tactics – 

  • Very choppy action dictated by headlines.
  • Big Payrolls report on Thursday. Risk taking may take a backseat while waiting for that payroll report.
  • Expect daily vol to continue with headline whipsaws and with VIX elevated at 35.
  • Eye’s wide open though trying to keep open and flexible to new data and inputs.
  • Expecting a hi-vol summer with Covid and political headlines whipsawing markets
  • Want to take care on establishing positions with duration.
  • I realize its difficult, but don’t lock it on an idea or thesis. Stay open and flexible in your thinking. Let price be our guide. Stay mentally flexible here.

FAAMG Live Annotated Charts

Click on the Links to view my annotated live chart

FB                  Daily

AAPL            Daily

AMZN          Daily

MSFT           Daily

GOOGL       Daily 

Index Chart Review

SPY 2 hour

SPY 30 min

QQQ 2 hour

QQQ 30 min

IWM 2 hour

IWM 30min

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