Daily Profit Compass July 6

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

“When I see a bubble, I BUY it”  George Soros

We can make a lot of money if in fact a bubble is forming. I think the key is to keep employing a “roll and protect” strategy.  As your options go up 100% – 200% continue to roll up to even money and book profits while still remaining in the trade. There will be periodic rug pulls with the possibility that what ever positions you have on will go to zero or be severely menaced. That is why you don’t want to leave a lot of embedded gains in your positions. Your wins don’t count until they are in the bank.

Earnings

Sector Snap Shot

News Flow

  • Market sets aside Covid case count as futures jump
  • China Market rocking; Asia Markets are risk on
  • UBER board approves $2.65B deal for Postmates
  • Buffett makes a $10B deal for Dominion Energy assets
  • Lucky Brand Jeans files for BK

Market Snapshots

SPX valuation pushing 22x; well above 5yr and 10 yr averages

You’ll hear a lot about the surging China market today.

Will the breakout hold?

SPY and iwm have been trapped in trading ranges for 3 weeks. THat may change today as futures are popping on the back of a strong Asian session. If these breakouts hold the upside could be substantial. The trading range was $14 .  THe measured move points to $328 on SPY if the breakout holds.

Keep in mind that the open will leave a big gap below and that there is an unfilled gap from Friday. So from that perspective there is reason for caution but for now the market looks strong as it looks past covid and other worries. Keep a long bias and keep ratcheting up your stops.

 Strategy and Tactics – Lean Bullish

  • Bulls emerging after a strong Asian session
  • A break above the recent trading range targets much higher prices if the break out holds.
  • Vol has been getting crushed. Currently 27. Moves below 25 will add to bullish flows. Above 30 is cautionary.
  • 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 July 6

Click on the Links to view my annotated live charts

FB                  Daily

AAPL            Daily

AMZN          Daily

MSFT           Daily

GOOGL       Daily 

$PZZA

Papa John’s has been consolidating in a $10 range. Alarm $85 for a potential breakout that targets $95 on a measured move basis.

$BABA

China stocks have been hot. Keep an eye on BABA. Price in no man’s land at the moment but $230 will come up fast and be worth an alarm for a potential breakout to new highs.

$JD

Price is flagging just below $62; a break above opens the door to the next leg higher.   Set an alarm and be ready.

Index Chart Review

SPY 2 hour

SPY 30 min

QQQ 2 hour

QQQ 30 min

IWM 2 hour

IWM 30min

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