Tickers discussed: SPY QQQ IWM EEM 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.
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Earnings
Hi-flyer $ZM, $CRWD, $AMBA Tuesday, $DOCU, WORK, $AVGO Thursday
News Flow
- Overnight unrest rolls on; several policemen shot across the country; Unrest spreads in NYC despite first curfew in 70 years
- Trump threatens to use troops to quell the unrest
- France’s GDP plunges 11%
- TSLA basks in glow of SpaceX success as shares rise.
- Visa reports some improvement in payment volume
- Lufthansa clears path for bailout; $DAL negotiating w/ pilots for voluntary retirements and layoffs to reduce staff.
- Western Union $WU making a run at MoneyGram $MGI again.
Sector Summary
XLK / XLV soggy ; interest rate sensitive defensive XLRE / XLU zoom
Market Graphics
Chop, Chop and more Chop at the top
Trading was choppy yesterday at the index level. SPY was stopped shy of a marginal new high while QQQ inched above it’s recent high but the action was soggy. IWM broke above $140 and made it as high as the mid $141’s but they faded that move back to $140 by the close. $140 remains a pivot level for this index. Overnight the futures started off weak but reversed to modestly green this morning. The overnight move is in keeping with the recent pattern of overnight ramp followed by regular session camp. I remain mystified at the relative lack of price discovery during the regular session.
Strategy and Tactics
- IWM – I was stopped on my short against $140; will probably re-enter on a break below.
- VIX – Bought Jun 30 calls. We’ll see if vol picks up in the days ahead.
- SPY $300 and QQQ $229 are the key short term levels to watch. Above and bulls have no immediate worries. Below things get more iffy.
- For longer term traders, bulls still in control. No immediate worries but further downside will test uptrend lines / channel lows. Seems like a time to pay a bit more attention.
- Continue to watch FAAMG. Even if you dont trade them, sheer cap size will move QQQ and markets in general.
- I still think Tactical shorts ok, but overall bias remains and should continue to be bullish. A tactical short I am focused on is IWM.
- Stay mentally flexible even though your heart may urge you to go “all in”
- Keep ratcheting up stops if you have nice runners. Have a plan to get paid.
FAAMG Update & Trading Guidance
- FB – Price lifting off TL support; Prices above $221.71 keeps the daily chart bullish
- AAPL – Price lifting off support and clearing $320. ; $316 and $313 are your key downside support levels. Breaks below $313 favor a move to $302.50ish.
- AMZN – Price recaptured $2450 and is consolidating in a tight 60m bull flag. A break above 2475 opens path to 2530. Chart has gone from soggy and iffy to interesting and bullish
- MSFT – Price still pinned below $183; needs above for 186.50; Below 182 re-opens path to 176. Needs 187-187.50 to open up higher range / prices
- GOOGL – Soggy; alarm 1440 for $40 gap to 1480; alarm $1410 for bearish breakdown
$EEM Makes a move
The dash for value has extended to offshore markets. Here EEM has popped above a resistance level. I am not interested here as price heads into the teeth of the 200ema and downtrend line, but a pop above and things would get interesting. Alarm $39.50 for a heads up.
Index Chart Review
SPY 2 hour
SPY 30 min.
QQQ 2 hour
QQQ 30 min
IWM 2 hour
IWM 30 min
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