Daily Profit Compass June 16

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Tickers discussed: SPY QQQ IWM FAAMG  ATVI  CRWD  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 –  

Yesterday it came to my attention that some pain was administered to several of our group members. I am sorry about that. While financial losses can be gut wrenching, its the emotional toll these losses can take on a trader.  The quote largely nails what being a market participant is all about; how we avoid pain, how we deal with it and how we sometimes capitulate to it. The topic merits much thought and inward reflection especially if you often find yourself in that unfortunate place. It would take hours and hours of discussion to get to the core of how each trader experiences and copes with market pain. The simplest advice I can offer is to stop doing whatever it is that is causing you pain. I am not talking about just a bad trade. I am talking about repeated actions / behaviors that always end up the same way…suffering.   Taking too much risk, ignoring stops, too many positions, too much of your portfolio at risk, revenge trading, day trading, trading with no process, relentless hunting for stock tips, …that’s just off the top of my head.  The thing is YOU KNOW what it is. Just stop. Take a step back and re-examine what is going on before proceeding. Figuring out how to avoid pain is half of what trading is all about. 

Earnings

Sector Snap Shot

News Flow

  • Buying ETF’s were not enough; the FED dives into buying individual corporate bonds.
  • SCOTUS says workers can’t be fired for LBGT status in landmark case
  • Walmart and Shopify announce new partnership to expand WMT’s online presence and offerings
  • $AAL in talks to float a junk bond offer to raise cash
  • PG&E to plead guilty to 84 counts of involuntary manslaughter in deaths caused by the 2018 “Camp Fire”
  • Covid raids Bridgewater’s AUM as assets fall 15% at the hedge fund giant
  • China signals that it’s fine with 4 more years of Trump in WH
  • Team Trump working on $1T infrastructure program but details are fuzzy.
  • 6 former EBAY security officers charged by the FBI of cyber stalking

What to watch this week

  • Retail Sales this morning at 8.30am
  • Powell to testify on Capital Hill at 10am today before the Senate; tomorrow before the House
  • Friday – Quad witching / June OPEX.

Market Graphics

Fed sponsored Re-ramp?

Little voices are whispering “Here we go again”.  I’m trying to resist them but when you see giant green bars on Fed breaking news it makes you wonder. Anyhow, prices are higher this morning and are pressing into over head gaps on SPY and IWM. QQQ never had the big gaps so it is simply higher. If price fills the gap and pops above, it would seem that the 1850 point drop of last Thursday will be a fading memory. Let’s stay vigilant and focused level to level. THe market has shown it can turn on a dime. At 34, the VIX is far from signaling the “all-clear”

 Strategy and Tactics  

  • Staying light and nimble waiting for clues on future direction. Feels like no man’s land here.
  • But with indexes moving $5 +++ on a daily basis with zero overnight risk, you can make a fine living just on that.
  • Want to take care on establishing positions with duration. Certainly dont want to load up bullish or bearish positions. Like I said, feels like a dart throw.
  • If we take out the gaps and finish higher across the board today the bulls will be emerging again.
  • My bias is bearish but not enough evidence or conviction to load positions.
  • FAAMG – Unless we see these break, the market cannot truly crack. Keep them in focus.
  • 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 Update & Trading Guidance

  • FB –  Missed a nice trading opp to buy support at $224 on the 60min chart.  Prices above $221.71 keeps the daily chart bullish; below favors 50ema test at $210.50
  • AAPL – Still walking the 8ema higher; $325 coincides with prior ATH and 20ema. No worries for bulls above $325
  • AMZN –  Dual tags near the 20ema held and bounced higher. THe 20ema at 2492 is a great reference level for longs.
  • MSFT  – Key off the 20ema at $185.22. Above ok for bulls;  below would favor a 50 ema test is favored at 178.
  • GOOGL – Stuck at $1420 and looks soggy. Needs to break above and go. Below 1420 / 1410 still technically vulnerable to further downside.

Charts in Focus

$CRWD

With price flagging / consolidating just below $100 at the prior ATH, it makes sense to alarm $100 and be ready for the breakout. An eyeball measured move looks like $120 is in the cards on a break out

$ATVI

Gaming is re-emerging again as covid fears revive. Alarm $75 for a buying entry location. At $75 price will have recaptured the upchannel, PPO will have likely put in a bull cross, and RSI will have broken out above resistance.

Index Chart Review

SPY Daily

June 15 Supplement: Price set to open around $297, mid way between support at 295 and resistance at 300.  In general, i think you can buy $295 and sell $300.  Be aware that on the open there will be a gap above.

SPY 2 hour

SPY 30 min

QQQ 2 hour

QQQ 30 min

IWM 2 hour

IWM 30min

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