Daily Profit Compass March 25

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Tickers discussed: SPY QQQ IWM  AAPL  Strategy and Tactical Update

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:  Common Traumas






Both inside and outside the charts, we traders suffer from the same things. Within trading, deep-seated  traumas continue to weave their way into every trade we make.  Having deep-seated traumas act on us is usually not a good thing. Working through these issues gets at the heart of improving as a trader. Most aspiring traders never bother to try because this work is often painful and difficult. It’s a lot easier to simply put on a fresh trade and fire off a few tweets. If you want to make deep, long-lasting improvements in your trading, get to work identifying your traumas and sticking points. ( they repeat over and over again )  The first part of any campaign of improvement is to accurately identify the problem.



News Flow

  • We have a deal.  No vote yet but both sides say an agreement has been reached for the Fiscal Stimulus package
  • After a 2 day dip in deaths offered false hope, Italy suffers another deadly day as deaths spike to over 750.
  • India goes to full lock-down
  • Germany closes in on historic stimulus package
  • Billionaire Fertitta lays off 40,000 at his empire of restaurants and casinos.
  • OXY slashes pay for anyone making more than $76K as cash flow plummets
  • Hoteliers lay off tens of thousands as properties go dark.


Squeeze Play?

I set up the title and graphics late last night projecting my hopes and dreams for a continued rally as late-to-the-party shorts were squeezed out yesterday.  The stimulus news produced a nice pop in over-night futures but as of this writing, traders have faded the entire move and have taken a nice green candle and turned it red.  We talked about this yesterday as a possibility.  Pajama traders are allowed to take profits every once in a while.  Let’s see how it goes in the regular session. I still think there is a good chance for a continued squeeze by the big boys. Look on the bright side…..there won’t be a massive gap below that needs to be filled. 🙂

Reminder:  Although we’ve discussed it many times, it’s worthwhile  repeating now.  Price has a tendency to revisit the overnight highs and lows in the regular session. One of the first things I do each day is to review the overnight price action, then mark the high and low in a special color on my platform. You’d be surprised to know that the overnight action often respects support / resistance levels that have already been identified, and how often during the regular session price revisits those levels.  The reason i mention this is because across all of the indexes, price found our pre-identified target levels in the overnight session.  

Wave 2 Data Flow

  • 3/25 Durable goods / Home prices / oil inventories
  • 3/26  GDP / Jobless Claims  ( Big Day; Jobless claims may spike 2M ++ ) NatGas inventories
  • 3/27 Personal income / Consumer Sentiment

Index Chart Review

SPY Daily

From the chart below you can see price was stopped by the falling 8ema. Those in the long trade would see price take out $245 and make a move to $250 as a first objective. Moves back below $235 would be bearish and would likely mark a continuation of the downtrend.

SPY 30 min.

A nice clean chart for you with the key levels marked. As it stands now, price needs to clear $245 to get some upside momentum going and open the door of opportunity for higher prices. Although it does not look all that significant on the chart, the open gap below is almost $11 wide. Traders most certainly want to be short for that gap fill!  FYI – Price found $250 in the overnight session.


QQQ Daily 

Real simple folks. Longs want to see price above $186 to open an opportunity for $192.50.  If bears push prices much below $180 and into the open gap below it will make yesterday’s big move look like a false breakout amid a continuing downtrend.


QQQ 30 min

A clean board for you on this 30m look. All the salient levels are marked. Be sure you alarm the $7.50 wide open gap below. Like SPY, this eventual gap fill offers the potential of a “magic erasure” trade if you get it right. It will make you forget a lot of boo-boos if you catch the gap fill.  FYI – Price found $189. in the overnight session.

IWM 60m

Choosing to show the 60min chart because it perfectly illustrates the double bottom technical formation and the measured move target. As long as price is above $108 the formation is active and traders can look for the measured move target to be fulfilled ( we do have an intermediate target of $112.50 ).

Prices below 104.15 favor a gap fill to 99.90

$IWM 15min

A granular look at the price action and levels. Price found $112.50  in the overnight session so there is a good chance it returns to that level for a double check. Like the other indexes, there’s a big gap below to fill.




AAPL and big cap tech in general have held up better than most. If price can power above $240 and clear the 60m DT line, I think price can find $167.50 if a rally breaks out in the broader market.

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