Daily Profit Compass June 30

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Tickers discussed: SPY QQQ IWM  FB AAPL AMZN MSFT GOOGL    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  –  About Ayn Rand

Ayn Rand was a 20th century Author that wrote “The Fountainhead” and “Atlas Shrugged“. Having seen the Bolshevik revolution in Russia first hand and how the emerging Soviet Union confiscated her Dad’s family pharmacy, her writings deal with what happens when the government starts controlling everything. About how near monopolies are formed by the help of government crony capitalism. About how the welfare state kills incentives to be productive and creative.   She warns about and predicts what happens to societies that go down that path. To me it’s fascinating.

Last night I ran across a Mike Wallace interview of Ayn Rand from 1959.  Like Jesse Livermore’s books, its eery to listen to an interview done 60 years ago and have the content seem like it was done yesterday. Rather than try to explain it, let Ayn Rand do it in her own words.  You’ll have to excuse the fact the interview was conducted in a cloud of Mike Wallace’s cigarette smoke. Find the 27 min Mike Wallace interview of Ayn Rand HERE

If your interest was piqued by the interview, you can learn more by listening to this 1 hour interview of Yaron Brook, President of the Ayn Rand Institute. Find it HERE


Run up to earnings season

We’ve got about a month before earnings season gets into swing. This run – up period is typically bullish both for individual stocks and the market as a whole. We need to be aware and look for bull triggers on our index charts. This would present itself as price reclaiming levels from below. If we see that, it would be evidence that the baby downdraft and choppiness was just consolidation within and ongoing uptrend. If we however see a lower low print ( prior swing low taken out ) then we must conclude that more corrective activity is underway.


Sector Snap Shot


News Flow

  • Powell and Mnuchin head to Capitol Hill to provide a status update on the recovery   12.30pm
  • Re-openings continue to be scaled back
  • China approves new HK security bill
  • $USD strength re-emerges.
  • UBER said to be interested in buying delivery service Postmates
  • NOTE:   Holiday Shortened Trading Week. Markets closed Friday.  Be aware of non-standard weekly expirations that will be on Thursday.

Market Snapshots

Market Review – Conflict Resolution

The bulls and bears continue to thrash about with neither making much progress. When ever the bears knock it down, the dipsters are there to kill any hopes of downside follow through. Likewise, bulls have made no progress either since 2 weeks ago when the bears printed a massive red bar.  The only choice here is go level to level as the trend goes flat.

 Strategy and Tactics – 

  • Bears emerging but lots of work to do.
  • Planning on feeding you some bear set ups to monitor so we are ready if they trigger.
  • Watch financials and FAAMG; See if FB troubles migrate toward other big cap tech names.
  • Expect daily vol to continue with headline whipsaws and with VIX elevated at 35.
  • 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.
  • 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

FB – 221.71 is your daily pivot. a break back above is a place you could buy w/ a tight stop. Price below 221.71 keeps chart bearish.

AAPL a close below 350 would trigger a sell signal based on a trend break ; stretched from ema’s

AMZN printing divergent highs but no sell signals. Price $250 from the 50ema

MSFT printing divergent highs. A break back below 195 would likely bring in sellers, but currently no sell signals.

GOOGL – stay long against $1360; a break below sets up a 200ema test at 1320

Index Chart Review

SPY 2 hour

SPY 30 min

QQQ 2 hour

QQQ 30 min

IWM 2 hour

IWM 30min

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