Tickers discussed: SPY, QQQ, IWM, TLT, USO, GLD, SLV, AAPL, AMD
The Daily Profit Compass provides the stock market outlook 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.
Earnings Calendar
Nice reports from NKE and CTAS yesterday. In KBH they were selling Oct 32 Calls ahead of today’s print AMC Micron tomorrow after the bell may set the tone for semi sector
Market Observations, Technical Developments, Outlook, and Strategy
Market Recap: As speculated, the week after FOMC and options expiration often are inflection points. QQQ is back in the August trading range and SPY seems poised to back test its break out. THe IWM has already broken down so SPY is the last one holding its breakout. If SPY falls back below $292, all of the indexes will be bearishly aligned. We cant go bonkers to the downside unless SPY loses its breakout.
Very busy day of trading as alarms were firing all day long. Oil lost key support at $USO $12 triggered a short entry. TLT extended its gains. Gold and Silver were rocking.
The day wasnt without drama as an afternoon tweet by President Trump launched a $1.50 SPY bar in about 2 sec. It’s terrifying to see a bar like that when you’re positioned bearishly and I’d be lying if I said that bar did not shake me out of a few positions, but they started fading it almost immediately. That’s the market we have folks. When it happens to you. Take a deep breath, take a step back, and give yourself a bar or two to make sound decisions. It isnt easy but it’s what must be done. For those holding positions and trading on the daily time frame, its all noise. An important point for those staring at their screens all day long.
S&P Leaders
Staples and Utilities dot the leader board.
S&P Laggards
Energy Hammered.
Hong Kong News: Quiet. Now HK goes on the shot clock as the countdown to the October 1 Chinese Communist Party Anniversary begins.
China News: After clamping down on shadow banking last year, China beige book is reporting that shadow banking has returned with a vengeance and is at the highest levels it’s ever seen. A result of tightening financial conditions and in general a risk factor for the economy
Currency News: Quiet
SAFE HAVENS
Bonds. Bonds cleared T1 at $143 and held the move. I took profits on my TLT Oct 141 calls by rolling to Oct $144 calls. If markets remain jittery or proceed lower, I expect TLT to hold it’s bid and grind higher.
$WTIC / $USO Price triggered a sell signal by moving below $12 key support with oil moving lower by about 2.50%. This morning oil is off another 1.5% as Saudi is reported to being ahead of schedule on restoring its facility. My expectation now, barring another attack, is for USO to fill the gap to $11.50.
I am in the USO October $12 puts . This was part of our trade plan
On the $WTIC chart I have the following levels as support. $54.80 / 54.15 / $53.50 / 52.90 / 50.90 ( from the 60m chart )
$GLD Gold continues to drive higher as markets wobble. The recent highs are now targeted. I have support at 1500 with $1492 being my last line in the sand. My Gold miner positions are being rehabilitated but still a ways to go.
$SLV Consolidation day after Monday’s 4.25% move.
Strategy Update: Downside break
The downside hypothesis is beginning to play out after the FOMC and option expirations cleared. The key for a sustained down move is SPY moving back into its August trading range. QQQ and IWM have already broken down .
Risk off trades : All the risk off trades continue to advance as equities wobble.
$SPY Big Picture
Note that price has broken its TL off the Dec low and now has broken lower from its bearish rising wedge off the August low. THe next key level is $292 which marks the top of the August trading range.
Daily
Swing Traders: $295.50 is the key level to watch. A move below targets the top of the August range at $292. Bulls may want to exit their positions on a break below $295.50 because a $3.50 down move through a gap is favored. Bears: On a break below $295.50 get short for a gap fill to $292.
SPY 60 min: $295.50 is a critical level. Bulls ok above but bears will hit it hard below with an open gap to $292. If price reaches $292, I’d cover shorts in anticipation of a reactionary bounce.
$QQQ Daily
Price has fallen below $189 which marked the original breakout from the August trading range. Therefore the breakout failed which is bearish. From a technical standpoint, the bottom of the August trading range is now the technical target down near $179. THe most influencing factor here are the FAAMG names and SPY. Down side moves will be throttled as long as SPY remains above $292.
FAAMG names very weak. Watch them for clues. e daily pivot at $190 and the 20ema again but as before those low side supports have held.
Swing Traders: On a break below $187.50 a move to $185 is favored. That would fill an open gap and it is where technical support resides.
QQQ 60 min:
Get short on a break of $187.50 for a targeted move to $185 to fill the gap. A back touch of $189 would be an objective level to initiate a short. Cue off of SPY. If SPY finds support, be wary of leaning into QQQ shorts.
$IWM Daily
Price firmly in bear mode after failing to break above $158. More downside is favored with the next target being $150 ish
Swing Traders: Get short on a move below $152.50 and look for a move to $150- 150.50. If strength returns, a move back to $154 is possible where I would re-initiate a short.
IWM 60 min
Keep it simple and visual; Below 152.50 favors a move to $150.50. Bulls need to reclaim $154 to stem the selling. Nimble , active traders can trade in an around these levels.
************************** TRADES **********************************
Triggered Trades
SMH – broke $118.50 I am in the Oct 11 $118P at $2.67
IWM – In the October $153 Puts at $2.99
QQQ In the October $188 P at $3.53
AMZN tripped the alarm… In October 4 $1735 puts at $24.75
USO triggered on a break below $12. In October $12 P
Trade Set ups
AMD – is testing support on the 60m chart. On a break of $29.25 buy the Oct 4 $29 P and look for T1 at $27.25
AAPL – on a break of $117 buy the Oct 4 $117P and look for a move to back test the breakout at $210 / $211 area.
XLNX – Above $100 get long; below $95 get short for gap fills on either side.
Open Positions
TLT Oct $141 C >>>>>> Rolled 80% winner to October $144 calls
GLD oct 142 / 146 call spread at $1.25
QURE Oct $45 P at $3.61 – Nice down move of 6% has brought out position to life.
GDX Oct 30 C at $1.47
WPM Oct 30 C at $1.32
KL Sept 45 C – expired
PAAS Oct 18C
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Notes:
The charts are and levels are provided as well-informed guidelines. That said, please be aware that exogenous events like surprise tariffs or other events can easily move price through support / resistance zones.
Also, set you stops according to your own risk tolerance. The ones I have provided are to be used only as a guide. The most important aspect of your stop is to honor them. Some trades work, some don’t. Honoring your stop will ensure your loss on a failed trade will be minimal.
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