Tickers discussed: SPY QQQ IWM FATMAAN DKNG ROP FIT XLB XLF XLI DXCM
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.
Earnings
Companion Video
The companion video covers 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.
Find the Video HERE
Election Outcome Matrix
Interesting piece from BoA laying out the possibilities of Monday’s election with an outlook on economic scenarios. One thing that isnt considered regarding a blue wave sweep is the possibility of a wave of year end selling to avoid the inevitable Capital Gains tax hike coming about 2 days after Biden is sworn in. Lots of people with massive embedded gains that I am sure don’t want a healthy chunk of those gains disappearing. Not a prediction, simply a possibility that is not presented in the graphic.
Option Buying in a Hi-Vol Environment
Buying directional Calls / Puts is not advisable with the VIX north of 35 especially considering that after the election there there is a high degree of likelihood that there will be a great degree of vol -crush. That will reduce the value of your option regardless of where price stands. If you want to place a directional bet, please use spreads. Buying a spread will insulate your position when / if volatility comes out of the system after the election.
Call Buyers get run over
After some extreme PUT buying on Monday, the extreme CALL buyers came roaring back yesterday. The dipsters are highly conditioned to buy every single dip no matter what. Maybe this morning they will be re-thinking that move. Taking shots here and there is fine. Just keep in mind that this is a defensive environment and with VIX over 35, options are very expensive.
INDEX CHARTS
Commentary for the charts on the indexes as well as the FAAMG names and other trade set ups can be found in the companion video HERE
SPY 4 hour
QQQ 4 hour
QQQ 30min
IWM 2 hour
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