Daily Profit Compass July 13

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Tickers discussed: SPY QQQ IWM  FB AAPL AMZN MSFT GOOGL  COST WMT  FDX TLT    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.

Quote of the Day

If your trades are driven by technical analysis, the trouble starts when you start “thinking” about corona case counts, p/e ratios and in general anything other than price. Focus on price; anything more is noise


News Flow

  • $ADI nears deal to buy $MXIM for $17B
  • China pushes for larger role for the YUAN on the global stage
  • China sanctions Cruz and Rubio in a mostly symbolic gesture.
  • PPP data errors call into question the effectiveness of the program
  • Disney opens Florida park just as the State’s Covid case count sets records on a daily basis.
  • Banks and NFLX earnings in focus this week.
  • The Washington Redskins finally cave in; Will drop Redskins from name


Market Snapshots

Stock Market Manipulation; yes it happens.

Let Jim Cramer explain how he and others do it. 10 min video



If real yields are any indication, Gold can push higher.

$6T in cash sitting in money market funds. When does it pile in?


Internet Stock Aggregate P/E does a moonshot. 

Bank Earnings on Deck 

The rubber is about to hit the road for banks. Despite just enough intermittent pops here and there to keep hopes alive, banks have been perpetual under performers. Collectively, they’ve never exceeded their GFC highs from over 10 years ago. Now, with corona virus with us and the FOMC having pegged the front end of the yield curve to near 0 and buying treasuries out on the curve as well, its not a great environment for banks. Now as virus numbers set records on a daily basis, re-opening plans are either being slowed or rolled back. Visibility into the next 6mo of the real economy remain foggy. As such, I wonder how much the banks will add to loan loss provisions. Banks with a large portfolio of small to medium sized company loans will feel the heat the most. I am especially concerned with regional banks. Their business is the business of making loans. I see the regionals having a really tough time with an increasing level of defaults and slow pays on their books. Unlike the big banks who have trading desks and other capital market diversifiers, Regionals are stuck with just being banks. I am expecting loan loss provisions to balloon as covid effects continues to weigh on the real economy.

 Strategy and Tactics – Back to bullish

  • When bears can’t fill a simple gap, they have a problem.
  • The market will eventually correct but bears have to be getting gun shy.
  • Stay long but keep risk within reason. Continue to roll strikes higher to protect profits and embedded gains
  • 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
  • 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

Annotations updated today July 9

Click on the Links to view my annotated live charts

FB                  Daily

AAPL            Daily

AMZN          Daily

MSFT           Daily

GOOGL       Daily 

$TLT 60 min

Some nice trading opps lately as price respects support / resistance and mid point reference points.

$COST – Premier retailer breaking out

Traders can be long against $322.50 at the prior high. Price above all ema’s which are bullishly stacked.

$WMT – catching a bid

Walmart exploded off of supported at $119 and quickly added $11. Price now testing down trend resistance. A break above favors a move to test the recent highs at $132.50.  A clean breakout could push to low $140’s on a measured move basis.

$FDX – Holding the gap

About 10 days ago we flagged FDX for a bracket trade. Since then, price has held the gap at $155. Traders can be long against that level and look for a test of $163. Be concerned if $155 breaks. A move below opens up some down side for a potential gap fill to $140.

Index Chart Review

SPX Broadening top update

SPY 2 hour

SPY 30 min

QQQ 2 hour

QQQ 30 min

IWM 2 hour

IWM 30min

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