Daily Profit Compass May 11

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.

Trader’s Couch

The link between Spirituality and Trading

As his Holiness states the purpose of spirituality is to provide a framework for self-discipline. For we traders, maintaining self-discipline is fully 90% of what we battle each day. Therefore if we embrace spirituality and take to heart it’s teachings, we will be building the inner strength and fortitude necessary to be successful in our market interactions.

Earnings

 

News Flow

  • US talks to chip makers about self sufficiency
  • AMZN said to be circling AMC for a potential takeover bid. AMC shares up 17% in premarket trading
  • $CCL says bookings are surging
  • $UA and $MAR both miss on EPS

Soggy

The major averages are down about 1% across the board as I write this. A little soggy when you consider the price action last week which was bullish across most sectors. Keep an eye on any emerging rotation into defensive issues like XLU / XLP / Bonds etc.  Last week fed fund futures were priced for negative rates next year despite Jay Powell’s proclamations to the contrary. Bond yields have been a leading indicator on the past few rug pulls.  Keep them in focus here.  Gold looks horrible after having had a good week. Showing down 1%.

Reminder: this is May Op-ex week. Option expiration week’s are usually bullish. We will see if that holds true.

I am about talked out on this market. The disconnect between main street and Wall Street can only be sliced and diced so many ways. Keep the focus on price and we’ll do just fine.

Sector Summary

All green with energy leading the way.

Wave 2 DATA

5/11 Charlie Evans speaks at 12.30

5/12  NFIB survey / CPI / Redbook / 4 FOMC speakers

5/13 PPI – FD, Oil inventories

5/14 Jobless Claims / 20 yr bond announcement

5/15  May Option Expiration /  Empire State MFG Survey / Industrial Production / Retail Sales / Business inventories

Strategy and Tactics 

Staying tactical. Not piling in at the top. Taking selected shots.

Positioning Update:  LUV Jun 25P small;  XLF May 22P Long GLD May 160 C. and  GLD May 165C ;  Rolled GDX  May 35 C to Jun 35C ; long DHT Jun $8 calls;

FAAMG Update & Trading Guidance

These names are 22% of the market. Even if you don’t trade them, they collectively dictate in large part where the market goes.

  • $FB – No changes; Stay long against 209.50
  • $AAPL – Overhead gap almost closed.  Stay long against the uptrend line. Look for a gap fill to $313, then All time highs
  • $AMZN – No changes; Stay long if you entered near 2280; if no position, the next long entry is on a break above 2375 where there is some volume / price resistance. Target is 2450
  • $MSFT –No changes;  stay long against 180; target is prior high at 190
  • $GOOGL – No changes; stay long against 1350; clear path to 1425. Price is stretched from 8ema. Dont be surprised with a hesitation or minor pull back for ema re-connect.

Index Chart Review

SPY 2 hr

SPY 30 min.

QQQ 2 hr 

QQQ 30 min

IWM 2 hr

For some reason I lost all of my prior annotations, so here is a fresh look. Boiled down to its essence, bulls are fine above $125. Below it gets harder.

IWM 30 min

 

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