Tickers discussed: SPY QQQ IWM SPLK OKTA PANW PYPL FSLY TWLO 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 – Manage, then maximize your energy
“Fatigue makes cowards of us all” Vince Lombardi, Legendary Football Coach
Managing your energy throughout the trading day is key to peak performance. It’s not uncommon at all for traders to fade into the close as energy,attention span and concentration wane. Here are some ideas that may help you both maintain and even maximize your energy levels throughout the day.
- Get the proper amount of sleep. You’re behind the 8 ball if you’re not getting rest.
- Make breakfast happen. Consider it trade fuel. I been eating lots of oatmeal lately. Filling and not a lot of sugar. 2 minutes in the microwave, Done
- Go light at lunch, then go for a walk or do some light exercises to get the blood flowing. It will relax you and get you energized for the afternoon session.
- Snack smart. I usually eat either power bars or nuts. I try to eat something around 1.30-2pm to bridge the gap.
- Stay hydrated. Sounds kinda silly but its not. Most people are dehydrated to a certain degree and it impacts them. I drink a ton of water during the day.
- Sharpen the Saw: Get away from the screen to relax and recharge. I need to work on this. There is always another 20 charts to look at but at a certain point you’ve got to shut it down.
Experiment with it. Find your own groove. I think if you find a way to incorporate these ideas into your routine you’ll not only feel better but you’ll also find that you’ll be more attentive and sharp during the afternoon session.
Earnings
News Flow
- Equity Futures up 1% and Oil up 3% pre-market as US-China Trade rhetoric dies down.
- Initial Jobless claims slightly above consensus but market un-phased.
- Paul Tudor Jones endorses Bitcoin as he makes a big purchase as an inflation hedge. BTC tops $10,000. Elsewhere, Gold comes to life.
- Tickets sell out to Shanghai Disney
- AMTD reported a record of 609K newly funded accounts in Q1. Other online brokers like Schwab, Robinhood, Fidelity etc also reported record account growth.
Zoom Zoom
This market continues to forge ahead unabated and seems destined to re-tag the highs of last week around $295ish. We’ve got the April jobs number this morning that will post a hellish number of about 21.5 million workers lost their jobs in April. That said, the market already is expecting a bad number and if the past is any guide it shouldn’t react much. I will be ready for a reaction but am not expecting one.
On the earnings front, lots of comments in the trading room that the winning formula has been high perceived growth and zero profits, or even losing money coupled with no guidance. Just one example is UBER which is trading up after last night’s earnings. Ride sharing was a disaster but food delivery was up. The company has pulled their guidance, yet confidently forecasts profitability by the end of this year. That is a bold prediction considering you can’t / won’t give guidance. The market is doing what it wants to do and facts don’t seem to matter. All the more reason to trade price because you’ll never un-wind the knotted ball of yard of why the market does what it does. If you need a reason, just tell yourself liquidity is winning.
Sector Summary
Lots of green out there as you can see.
Wave 2 DATA
5/10 April Jobs Print
Strategy and Tactics
Rolled GDX calls higher. Being tactical here 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 – Stay long against 209.50
- $AAPL – Price above the uptrend line off the March lows and is now inside a $10 gap up to $313-$314. Stay long against the uptrend line. Look for a gap fill to $313
- $AMZN – 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 – stay long against 180; target is prior high at 190
- $GOOGL – 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.
Charts in Focus
$OKTA
Follow up on May 6 post. Up $10 in 2 days. Hope you alarmed it and took it. $180 is the measured move target.
$SPLK
Follow up from May 6: “Price popped above a nice level of resistance which becomes support. I like it against $140.” Proceeding nicely. Stay long and trail a stop
$PANW
Trade idea posted Wednesday triggered yesterday. Hope you alarmed and took it. Second entry on a break above $215 . Target remains $235 gap fill.
$PYPL
Tons of bracket trade set up’s this week. Alarm the high and low of yesterday’s range, then be patient and follow price either above or below the range as price leads the way.
$TWLO
Another bracket set up but with a few wrinkles. The prior high was $150, so that is support. If price pulls back into $150 I’d be a willing buyer there against support. If however price loses $150 then T1 = $130 and T2 = $122.50. If price takes out the high at $176.37, the stock is a long with a tight stop below the breakout. Right or right out.
$FSLY
Price attacking the all – time high on this relatively new IPO. Get long against $34 if price breaks above. This set up also could turn out to be a double top, so follow it closely for both a long and a potential short idea. It would be a very profitable trade if price stalls at the prior high and subsequently rolls over. It’s not often you catch a stock that can be a compelling long or short set up at an objective trade location. Watch this one closely. 
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
Price set to open around $129.50. That will of course leave a big gap below. There is technical support at $128.50. If you were long heading into the day and you sense or see a fade, $128.50 is your line in the sand. A break below $128.50 would likely result in lower prices.
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