Tickers discussed: SPY QQQ IWM FAAMG NTNX IBB QURE HUBS 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 –
My daughter is an architect in Atlanta. I’ve been amazed at some of the projects she’s worked on. But when you boil it down, the elements of solid, fundamental building construction are tried and true. Having a good plan, building on a solid foundation, following the plan, having a good team of artisans are all elements of building a solid structure. The architect adds style and a personal touch to the process. For the most part, we aspiring traders all know what to do. The principles of a solid trading regime are well known. The problem is few actually do what is required. They deviate from the plan by skipping steps or otherwise not executing correctly. I put myself in that camp. 95% of my problems are self-inflicted. Luckily the number of problems now are less than they were 10 years ago. Unlike the architect who has a building inspector following them around, we need to do the self-inspection to discover where the flaws are.
Sector Snap Shot
- Powell Part 2: Testifies before Hose today
- Market whipsaws on China and other Covid headlines.
- Cruise lines slide on $NCLH’s extension of cruise suspensions
- Achieving herd immunity in Sweden proves elusive
What to watch this week
- Powell to testify on Capital Hill at 10am today before the House; no surprises expected, but with Powell you never know for sure
- Friday – Quad witching / June OPEX.
Risk Tug -o-War
Bulls and Bears continue the risk tug-o-war mostly over covid headlines but I think bulls are gaining an advantage. With earnings season winding down and the major economic data releases in a lull, there is a bit of a dead spot in hard economic news flow. We’ll still have bouts of vol with VIX above 30 but aside from some horrible covid news, the market seems to have concluded that things are getting incrementally better. That combined with unlimited liquidity is tilting odds toward higher prices. While I have not gone gonzo anything, I am thawing toward the idea of higher prices at least into the upswing into the next earnings season. Still probably more overly cautious than most, I will gradually add long exposure with good set ups. We’ll see how it goes,
Strategy and Tactics
- Shifting toward bullish bias and looking to slowly scale into some long exposure.
- There will still be daily vol to take advantage of, but I see bulls re-emerging after last Thursday’s rug pull.
- Eye’s wide open though trying to keep open and flexible to new data and inputs.
- 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.
- FAAMG – These are super strong and part of the reason I am beginning to lean bullish from neutral.
- 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 – A move above $240 will take out the ATH; ATH’s are bullish. 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; price pushing ATH’s
- AMZN – RSI / PPO and turning up which is bullish; THe 20ema at 2492 is a great reference level for longs.
- MSFT – Pushing toward ATH’s; no chinks in the armor so far.
- GOOGL – Back above 1440. 1480 and complete gap fill still the target.
Charts in Focus
$HUBS – Hubspot
Price consolidating above support and while letting the 20ema catch up for a re-connect. I like this long against $215 on a break out. Set yourself an alarm.
$NTNX – Nutanix
Refreshing a name that’s been out there and on our list for a while. Big OH gap offers a lot of opportunity but I want to see the 200ema in the rear view as support prior to getting long. I have 25.75 alarmed.
$IBB – Large Cap Biotech ETF
Large cap bio ETF $IBB has been soggy the past month as it digests a big 2 month run. Alarm $135 for a breakout and go ahead and alarm $124 for a potential pull back to support. If the market kicks into another gear I like $IBB’s chances for a nice advance. Trader’s are encouraged to also look at $XBI, the small cap Bio ETF. The chart has a similar look and feel.
$NEWR – New Relic Software
Gap hunting this $10 gap on $NEWR. I’ve got $73.75 alarmed for an entry. If the market remains constructive, I expect this to make a run. Unlike it’s last attempt, price is now above the 200ema and the rest of the emas as well. All the ema’s are rising and should act as support on any weakness.
This chart has not played out yet but still looks like an explosive set up if it can pop resistance and hold it. I’ve got $66 alarmed for a top side breakout. Maybe the 3rd try will do the trick.
Index Chart Review
SPY 2 hour
SPY 30 min
QQQ 2 hour
QQQ 30 min
IWM 2 hour
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