Tickers discussed: SPY QQQ IWM FSLR, SEDG, FVRR, PRPL, AUY Strategy & Tactic update
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
Let things take their course
In my opinion traders should be involved with markets because markets and trading are their passion. If that is the case for you, then you should be happy to be on that path. Happy to do the work without too much concern for where the path may lead. The end-point will depend on your work-ethic, talent, and probably a good dose of luck. Enjoy that journey. For those that are involved in markets because you have cobbled a fantasy of what is at the end of the rainbow and are desperately seeking that, I wish you luck.
Companion Video
20 min Video detailing our Active trader game plan for today focused on the indexes. Run the video at 1.25x to reduce run time.
Earnings
News Flow
- Trump’s 20 hours of taped interviews with Bob Woodward come back to haunt him.
- $AZN says a vaccine is still possible.
- Pelosi and McConnell remain stuck in a doom-loop on a stimulus package.
- NYC Manhattan Apartment listings spike and prices crater as vacancies soar.
Strategy & Tactics –
So far so good but not out of the woods. We covered shorts near the Tuesday lows; then got the gap fill on SPY and a nice reflex bounce in QQQ to and covered the longs into the afternoon and were fortunate to get a late day dump. Still looking for a leg down to re-test the Tuesday lows and possibly more. My stop on the QQQ short is $280. Anything above that and I move to sidelines.
We remain on sell signals across all the indexes. That dictates that we must switch gears into either a neutral or bearish mode. From here we either go back toward the lows or take a leg higher if dipsters remain committed. Favor lower but anyone’s ballgame. Bears need a lower low to take full control.
- Begin hunting for stocks you want to BUY for long term holdings and at what price. Elevated vol would offer a great chance to sell naked puts on stocks you want to OWN. THis is pre-work to have your ducks in a row for when we see stability return. Be patient; be ready
- Go tactical here. This is active trader wheelhouse zone with big intraday swings in both directions. If this is not your cup of tea, set up for Swing positions on the short side that you can hold for several days.
- FAAMG – Remain the directional key to market. Market goes no where unless big cap tech fades.
- Remain Fluid and flexible in both positions and thinking; Dont lock in on Narratives.
Charts in the Spotlight
$FSLR and $SEDG
First Solar and Solar Edge are 2 solid names in the solar Energy space. You can count on one hand the number of times since March where you could have bought either name at the channel low and 50ema. Both names just reported earnings in early August so no worries there. These are the type set ups i like. Defined line to shoot against and if you’re wrong you get a paper cut. Solar is the only part of energy that has been working. I like both. Look out to October to give these names a chance to move toward the upper half of their channels.
$FVRR Daily
A nice, well-defined consolidation range here. Alarm $125 and $105 for breaks of the bracket. THe $20 wide range implies a $20 move on a breakout / breakdown.
$PRPL Daily
Emerging breakout after a long correction. Price breaking above all the ema’s which is bullish. I think you could use yesterday’s low at 18.60 as a line to shoot against. If you’re willing to give this more room, shoot against $17. The pull back has to a large extent, de-risked the stock. Any kind of retrace back toward the recent highs would be a nice win from here. Price is clinging for dear life at the 50ema. The recent fast run up has left a massive volume / price void in its wake. If / when price begins closing below the 2 day lows at $193, it instantly sets up a test of the 200ema and the prior breakout at $170. Sets up for an excellent R/R if price breaks lower from here. Alarm $193
$AUY Daily
Gold miner Yamana has suddenly become popular for institutional call buyers the past couple of days. The Oct 23 6.5 calls seem to be the favorite. Another trade stood out. One trader sold the January 5 Puts 14,000 times at 91 cents bid. Technically, price is working on a breakout and the chart looks constructive. Obviously there are a lot of moving pieces with a gold miner. It is a levered play on gold and gold itself has a lot of dynamics like the USD rising / falling. THe chart looks good and I like the institutional support. Other miners you may want to look at NEM / GOLD / KL /KGC
Active Trade set ups / Positions
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Sept 8 Activity – Covered QQQ short lottery tickets from Friday near $270. Looking for either a gap fill higher or a bounce to fade.
Sept 4 Activity
Discussed optionality of taking lotto shorts into the weekend after anticipating a run of the mill fib / short covering bounce into the close. Bad selling never ends on a Friday.
Sept 3 Activity
Went flat on broad market weakness. Taking losses on short term long positions and stepping aside for more evidence of sell signals or one day event.
Sept 2 Activity
AAPL / NFLX – The decision to hold overnight looked very smart indeed at 9.29am but at 9.31 not so much as they flushed the open. We took our losses and exited. Net / net, both plays were profitable with NFLX still garnering a sweet win but the give back hurt.
TWTR – Sept 41 Calls. A big pop gave us the opportunity to book 110% profit and roll higher. I bought the Sept 44 / 47 call spread for 1.03
DRI – Into the close I bought DRI Sept 95 calls looking for a pop into a big volume / price void.
INTC – Bought Sept 11 52 calls as price moved into a huge gap and with institutions piling in with massive amounts of call buying. These need to move fast with only 10 days until expiration.
Sept 1
AAPL / NFLX weekly calls. After booking a big win in NFLX and a 60% win on AAPL. We rolled higher with ATM calls and decided to hold overnight
Aug 31 Activity.
Bought AAPL Sept 4 $130 calls at $3. Unofficial trade idea.
Aug 28 Activity
$CHEF – Opened a new long position via September $17.50 calls at 80cents following a technical breakout, 5x call buying with institutional support
LVS – opened a new position in Sept 52.50 calls at $2.47. The gaming space has seen a marked pick up in institutional call buying in recent days.
$V – Price broke to a new high over 212.50. Perfect time to roll our Sept 202.50 calls to Sept $215 calls @ $4.80. Booking profits, staying long long against the prior high at $212.50
$DNKN – Rolled Sept 72.50 calls to Sept 77.50 / 82.5 call spread at $1.45. Booking profits and staying long
Aug 27
EBAY / CHWY – closed longs. EBAY simply never performed; CHWY hit our stop right out of the gate.
NIO – closed out longs after a nice win.
Aug 26 Activity
CHWY – Bought Sept 60 Calls at $3.74 Ahead of earnings on Sept 10 and following institutional call buying.
NIO – trade management. Rolled out of deep in the money calls to book a massive win and re-positioned in Sept 4 21 calls but with fewer contracts as the measured move target of $21 was tagged. Noted that unlike yesterday, Put buyers were making their presence felt. Price has not given any sell signs yet, but in a volatile name like this, that can happen in 15 min.
AUG 25 Activity
NIO – Bought on breakout above $16.
PINS – Stopped for 30% loss. Nice idea, wrong result.
Aug 24 Activity:
TWTR – Opened Sept 41 C for $1.73 on breakout
PINS – Opened Sept 32.5 puts at $1.83 on a breakdown from a consolidation range and into a wide open gap.
Aug 20 Activity:
XRT- Extreme bearish order flow has again picked up with big players shooting against our long position. In the face of soggy retail numbers and the bearish order flow we closed the Sept 50 Calls for $3.05
$V Rolled stops to breakeven
Aug 19 Activity:
Trade Idea to get long $V at the money Sept Calls against $200.
Aug 13 Activity
$XRT – Sept 50 C ; Closed 1/2 of position. Entered Aug 5 at 1.90; closed at 2.90. On the other 1/2 of position sold Sept 53 C for $1.20 credit. These moves were prompted by extreme bearish order flow into the Aug 28 exp $51 puts over 15,000 x. Retail Sales and Retailer earnings forthcoming.
EBAY Opened Sept 60 calls. $1.23. Looking for a move back to the highs
$IBB Closed short position for a small loss.
Aug 12 Activity
$INTC I finally gave up on this short. More a time thing than price hurting. Closed Sept 47.50 Puts for about a 30% loss.
$GLD Re-entered short with Aug $180 puts. Needs to move rather quickly, if it does not, will need to exit or buy more time.
Aug 11 Activity
$IBB – opened Aug $132P $2.32
$MNST – opened Aug 80P looking for gap fill coming out of bracket low. $1.02
$CF – Taking a shot at Sept 40 C at 45c. after players hit that strike 2600x ++
$DNKN – opened Sept 72.5 C looking for a breakout ahead of earnings after the Sept options expiration.
$GLD Closed puts for massive 340% win. looking to re-enter;
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$UUP – Initiated Sept UUP Sept 25.50 calls Aug 3 looks like a fail. Will post if i exit
Index Charts
SPY 30 min
$QQQ 30 min
$IWM 30 min
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