Tickers discussed: SPY QQQ IWM FAAMG 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
Earnings
News Flow
- Mega cap sell off resumes
- Trump considers using $100M of his own money in the campaign
- TSLA drops sharply as inclusion into the S&P remains elusive.
Strategy & Tactics – From Neutral toward bearish.
The Friday Mid-Day game plan of anticipating that the dip buyers would get run over is working. If you bought lottery tickets in the form of downside puts after the bounce on Friday you should be in good shape. Hold them until you see price stabilize to the downside, then close them out. Make sure getting paid on these is part of your plan.
We need to see how the day closes before any grand pronouncements, but as each level breaks the bears gain further control with lower lows and lower highs. THe dipsters will not die easily. Be prepared for sharp counter trend rallies. Remember, with short interest at near record lows heading into this corrective action, there are few people there buying to cover which tends to stabilize the downside. In this scenario cascading events can happen more easily.
- 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.
Active Trade set ups / Positions
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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
Companion Video
The Indexes, FAAMG, NFLX, TSLA. Run the video at 1.25x to reduce run time.
$SPX Fib levels amid the broadening top.
Forgot to post this with yesterday’s Navigator. Remember, projections are not predictions. Fibs simply inform us of where typical pull backs or retracements can go within an ongoing trend. It may be obvious but this broadening megaphone formation is massive and the magnitude of the swings indicate instability.
$SPY 4 hour
SPY 30 min
$QQQ 4 hour
$QQQ 30 min
$IWM 30 min
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