Tickers discussed: SPY QQQ IWM FAAMG TSM QRVO DRI $DJUSRU SNAP Key option order flows 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 – will return
- Critical test results from Covid vaccine trials due out in weeks
- The crowded Short TLT trade is unwinding
- Fauci warns of potential “Labor Day ” super spreader events as citizen lower their guard
- August Labor report tomorrow could be ugly.
Notable Option Flows
- Some big trades in SNAP, TSM, QRVO detailed below.
- SPY and QQQ order flow remained bullish
- IWM neutral
- TSLA a massive $132M in call premium sold and $32 M in put premium bought.
- FB big call volume and $20M in call prem bought
- AAPL bearish flows
- AMZN / MSFT / GOOGL – bullish
Strategy & Tactics –
Sogginess is always cautionary especially at extended levels. There is always the possibility of it morphing something more. Let’s be attentive, but not panicky because we have no confirmed sell signals ( yet )
- FAAMG – The 60 min levels on these names have been pure gold. Use them to your advantage if you are an active traders.
- Staying bullish does not mean complacent
- Stay vigilant! Ratchet stops / Strikes higher on your winners and keep exposure at manageable levels.
- Dont be afraid to go short if you get a price signal; especially if you’re holding a bunch of longs. You’ll like that balance on red days.
- Mark clear levels on your holdings for exits; honor those levels on a pull back.
- You know they can pull the rug at any time for no reason at all.
- Stay Fluid and flexible in both positions and thinking; Dont lock in on Narratives.
- Expecting a hi-vol summer with Covid and political headlines whipsawing markets
Charts in the Spotlight
Chip maker TSM saw massive bullish call action yesterday. Here are the big ones. these are all calls. Oct 80 850x / Oct 85 900x, / Oct 95 500x / Jan 80 625x / Jan 120 2200x / April 85 1500x April 105 250xA. What I like is that they are bullish out in time and not the ultra short term stuff for friday expo or one week out. The chart formation is one of our favorites. Strong uptrend followed by a multi week consolidation. A breakout would give us an objective place to get involved. Alarm $84.
Another chip maker. A single institutional trade in the name jumped out yesterday. One trader bought the Nov $135 Calls for $13.10 1000x. This isnt some Robinhooder taking a cheap shot. It’s a big money player looking out in time with conviction. Does not make him right but does warrant our attention. Another similar set up to $TSM. Nice consolidation.
I called this one out on yesterday’s mid-session update. Nice breakout from a triangle consolidation backed by 4x call buying and over $3M in call premium being bought. Most of the order flow is looking for a fast move between now and Sept option expiration. I’d target the September expiration and look for a move above $24
$DJUSRU – Casual Dining heats up as traders look to restaurant normalization and re-opening
The industry group that tracks restaurants and bars just took out its February pre-covid highs. THe group is preforming well. Thumb through the group. CAKE / EAT / DRI / MCD / SBUX / DNKN and others. We are already in DNKN so I dont want to go nuts but if you can afford one more, I like DRI. Darden is making a move into a $15 volume / price void where it could move fast. Into the close yesterday, I bought DRI Sept 95 calls looking for a breakout. Also I’d avoid the big covid winners in the space $DPZ / $PZZA / WING Hot takeout boxes to kill random Covid bugs are falling out of favor. These names may remain soggy for a while or even pull back.
Active Trade set ups / Positions
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.
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
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;
$UUP – Initiated Sept UUP Sept 25.50 calls Aug 3 looks like a fail. Will post if i exit
Companion Video – The Indexes, FAAMG, and Trade Ideas
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