Daily Profit Compass June 19

Tickers discussed: SPY QQQ IWM 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.

Trader’s Couch –  Will Return

 

Earnings

Sector Snap Shot

News Flow

  • Futures  rises as China pledges more AG purchases
  • Quad OPEX today
  • EU talks more stimulus
  • Klobuchar drops out of VP race; advises Biden to pick a woman of color
  • Trump’s first big rally in OK scheduled for tonight
  • FL Covid hospitalizations hit record
  • WireCard CEO resigns with $2.1B missing

 

Market Snapshots

June OPEX

Please review any open JUNE expiry option positions you have today and either roll / close them out. June Option expiration is today.

It’s been a while since OPEX created crazy volatility but traders should be prepared regardless.  This OPEX is supposed to be one of the biggest ever. While there are always activity and trades to make under the surface, at least at the index level, we saw a very quiet day of trading as Bulls and Bears continue to grind each other to dust.  Continue to think FAAMG holds a major key.  All names have been resting.  If these get going it will bode well for the broad markets.

We also have a massive pension re-balancing at the end of the month; another potential for an inflection point.

 Strategy and Tactics  

  • Bullish bias longer term with liquidity flood but neutral to bearish short term with momentum drifting lower and with neither bulls nor bears gaining control.
  • 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.
  • Expecting a hi-vol summer with Covid and political headlines whipsawing markets
  • 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 – Firm but upside momentum fading with bearish divergences on the 60m timeframes.  FAAMG needs to power through this to open door for general market upside. .
  • 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

No changes with narrow ranges. If FAAMG can power through this soft patch and burn through the bearish divergences on the 60 min charts, QQQ and the market in general will be off to the races.   Not a prediction, just a prerequisite. Could go either way.

  • 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 – Oscillating while deciding what to do; soggy.

Index Chart Review

Yesterday was a very narrow range day and produced no technical events on any of the indexes. I refreshed the charts, but made no changes to the commentary.  Today’s OPEX is said to be one of the biggest ever with tons of options rolling off.  Part of the reason for the extra quantity of options is from all the new traders coming in since the Covid crises. OPEX often tend to coincide with market pivots. Next week will be a big test.

SPY 2 hour

SPY 30 min

QQQ 2 hour

QQQ 30 min

IWM 2 hour

IWM 30min

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