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.
Be Fluid, Flexible and willing to adapt
We talk about it all the time. Be fluid, flexible and willing to adapt. Each morning we craft a game plan for the day. We look at a couple upside scenarios and downside scenarios as if we know what will happen after the bell rings. We don’t. The levels and plans are there to inform our trading, not dictate it. Learning when to toss out the game plan takes time in the chair and a willingness to do it. It is a skill that is learned. I am an engineer and therefore appreciate plans, rules, and laws of nature; rigid things. Being fluid and flexible hasn’t been easy for me. But over time I have gotten better at it. You’ll get better at it too; keep working at it. You’re likely making progress and don’t even realize it.
Sector Snap Shot
Back to bifurcation with cyclicals lagging.
- New Covid cases top 50,000 yesterday
- McDonald’s closes indoor dining; AAPL closes more stores.
- Jobs report at 8.30am promises to be choppy and hard to decipher
- $AAL says it has 8000 too many flight attendants
- Putin wins a key vote allowing him to remain in power until 2036.
- A patriotic 3-day “covid-weekend” begins tomorrow. That said, market reacting less and less to covid outbreak news
- NOTE: Weekly options expire TODAY. Make sure you address any open positions you may have.
Gold Miners log their best quarter EVER!
As the QQQ’s become more and more extended, the strategy of “roll and protect” takes on more importance. Regularly raise your stops / strikes to scrap the profits from the position while still participating in the upside. We don’t know when, why, or how much, but there WILL be a rug pull. On that day you will not want to have a bunch of embedded gains evaporate.
More and more options are being bought that expire within 24 hours. There’s a high degree of failure of these to work. We have a nice team of guys in the trading room that focus almost exclusively on SELLING near dated options and do quite well. They put time decay on their side. If you’re interested, join the trading room and I will introduce you to the team. They will be happy to include you in the discussions.
Super-Sized Jobs Day
Because of the holiday, at 8.30 we not only get new unemployment claims but also the June jobs report. Honestly nobody has a clue. Estimates are dispersed all over the place. We’ll just have to wait an react to the price movement. Currently, futures dont seem too worried as i see lots of green across the board.
Take care today heading into the 3 day weekend as to how much risk you care to take into the weekend. A good rule of thumb is to have your exposure such that you can enjoy the holiday weekend without obsessing over what might happen Sunday night. Be able to sleep well at night and enjoy the weekend.
Was disappointed that gold flashed a failed breakout. Popped above $1800 but now has fallen back. Watching closely.
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 charts
FedEx $FDX sets up for a nice bracket trade.
Index Chart Review
SPY 2 hour
SPY 30 min
QQQ 2 hour
QQQ 30 min
IWM 2 hour
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