Tickers discussed: SPY QQQ IWM 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.
Earnings
XOM, CVX, HON, PSX highlight today’s earnings releases
News Flow
- Global markets flash risk – off
- Jobless claims come in at 3.8M; 6 week totals top 30M implying a jobless rate of 22%. Those are Great Depression type numbers and 2x the peak in GFC 1
- $AMZN / $AAPL strike cautious tone
- $BA raises $25B in liquidity with bond offering
- Trump threatens retaliation over CoVid
- The number 1 traded ticker on Robinhood this week was…..wait for it; $USO More than TSLA More than SPY or AAPL. more than all them.
- Marine Tanker day rates plummet on supply cut fears.
Current Covid Trends
Rug Pull Edition
The market softness we saw yesterday during the regular session extended after hours as cautious tones from AMZN and AAPL weighted on sentiment. Not a lot to say from my end. We’ve discussed the overhead levels of resistance for a while. We were aware of the bearish divergences, the over-bought Oscillators were at extremes. So to make a long story short, we were ripe for a pull back. We don’t know if this initial pull back is simply a retreat from key resistance or the beginning of something more. So there is no need to speculate bottom re-tests or anything more. We have our key levels alarmed. We’ve been ratcheting up stops. There shouldn’t be any panic. Remain calm, honor your stops and take it day by day.
Sector Summary
Wave 2 DATA
5/1 PMI Mfg Index / ISM MFG index / Construction Spending / Rig Count
Oscillator Update:
Skipping the charts this morning, but both NYMO and NAMO remain overbought and above 60. The rubber band remains stretched. If today’s sell off holds, it will relax the over-bought conditions to a certain degree.
From Yesterday: If you are neck deep in longs; please be aware. If you mess around long enough with NYMO / NAMO at these levels, you’ll eventually need a face transplant. #JustSayin
If you have not done so, I think it would be a good idea to incorporate a review of NYMO / NAMO in your weekly routine. No need to obsess on it, but just in the last month knowing these oscillators were oversold helped us avoid remaining short at the bottom. Now, knowing they were over-bought helped us avoid being max long. Worth keeping on the radar.
Strategy and Tactics – Short term bearish
The charts have flashed sell signals. Short term bearish posture. We’ll need to suspend judgement about intermediate view until more evidence presents itself.
Positioning Update: Short ES QQQ May 8 $214 P Long GLD May 160 C. and GLD May 165C ; Rolled GDX May 31C to May 35C ; long DHT Jun $8 calls;
Index Chart Review
2 hour sell signal across all the indexes. Don’t hope; Don’t pray; Simply respect whatever stops you have in place and re-orient your mindset that we are likely in the beginning stages of at least a moderate pull back.
SPY 2 hr
SPY 30 min.
QQQ 2 hr
QQQ 30 min
IWM 2 hr
Price is sitting at $133 in the premarket, close to the $132 gap support level. That is a troubling sign. Be hyper aware. Below $132 you need to be out if long. A move to $130 or full gap fill to $129 would be favored on a break below $132.
IWM 30 min
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