Daily Profit Compass Nov 6

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The Daily Profit Compass provides stock market technical analysis for the indexes and other market moving names. Key levels and trading locations are provided, along with trading plans and timely commentary to keep you on the right side of the trade.



Companion Video

Last night’s Market on Close recap provides a detailed technical analysis of  the indexes, FATMAAN names and offers several trade set ups that may be appealing to you. Key Trading levels and trading plans along with timely commentary to keep you on the right side of the trade. Although we are moderately red in futures as I write this, the analysis from last night stands and all the same key levels still apply.  If you missed the video, I recommend you review it before the open.

Find the Video HERE

The Oscillators

Although getting pinpoint precision with any indicator is impossible, when these oscillators move to extremes they inform you that you’re on borrowed time and that a reversal is immanent. The last 3 cycles / signals dating back to the September timeframe have been spot on.   As I’ve said before, These oscillators stand undefeated.  Remaining long when overbought or short when oversold is a great way to get your face ripped off…..it’s just a question of when, not if.  Here we see a fast move underway to go from oversold toward overbought.

The Folly of Narratives

Have you noticed how quickly the narrative(s) are morphing as price rapidly changes?  Last week the massive “blue wave” was the ticket because unrestrained fiscal stimulus would flood the economy and markets with liquidity and thus lift asset prices.  As the election results dribbled in and stocks raced higher, now, divided government is great. Now those reckless democrats will be checked by the Republican Senate. No massive stimulus, no massive tax hikes, no green new deal.  Just the latest example of headlines and narratives filling in an around price.

So, when do “Green Energy” Companies start buying Oil companies?

In Canada green energy giant Brookfield’s market cap now exceeds that of Suncor, Canada’s largest oil company. Here in the US, NextEra’s market cap now exceeds that of ExxonMobil. Two fun factoids that were unthinkable just a couple of years ago. You may think it an oxymoron for a green energy company to buy an oil company but remember, these companies are in the energy business to make money, not for altruistic reasons.  How hard would it be to sell the idea that “We’re buying an oil company in order to carbon -neutralize it”  In the era in which we live, I think if any of these big energy playas put their mind to it, they can sell anything.  The cost of capital is as close to zero as its ever been.

Charts of Interest

KEYS – KeySight.

Love this long-term set up on $KEYS after a year’s worth of consolidation below $110.  Earnings Nov 18.  Trader’s can either get long Nov calls now and shoot for a pre-earnings run. , or wait until earnings clears and pick it up after the event. The measured move should carry price above $140 if the breakout holds


SPY 2 hour

Watch for a gap entry at $349. A break below would first target $346 with a full gap fill at $344. A nice $5 trade if you can catch it.

SPY 30 min

QQQ 2 hour

Same idea here as SPY. $292 is the entry to a $5 wide gap that is open to $287.

QQQ 30 min

IWM 2 hour

A different set up here. Chart remains unquestionably bullish above $164. Although you probably would not want to sit through a pull back to $160, anything above $160 keeps the chart bullish and would offer a nice objective long entry. Prices falling below $160 would open the door to more selling.

IWM 30 min 

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