Rinse and Repeat December 11

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In today’s daily market outlook in the Profit Compass, I focus on the market’s dramatic reversal, assess the market’s current technical posture and possible next moves. Key levels and trading plans are provided with commentary aimed at keeping you on the right side of the trade.

Inside the Daily Profit Compass

Trading Psychology Tip of the Day

I hypothesize that gathering biometric feedback on ourselves as we trade may be a path to understanding how we react under stress. One of my cornerstone beliefs is that “calming the mind” is central to becoming an accomplished trader.  If we can calm our minds when the pressure is on, we will be more apt to make the right call than if we are nervous and stressed in that situation.  Take a look; tell me what you think.

Trade Ideas

$SFIX is down about 14% this morning after guidance reported on last night’s earnings call disappointed.  The gap down may offer a good trading opp for nimble traders.  Once an opening range is established traders can follow a break higher or lower from the opening range.  Given futures are boldly higher, it may pull price into the overhead gap.

$DXJ  This is the hedged ETF that tracks the $NIKK.  In today’s Profit Compass I share the key levels on a trade that looks very intriguing.

The Indexes: SPY, QQQ, and IWM

Welp…..here we go again it seems.  Yesterday they set an awesome bear trap by taking it deep, hitting a fresh low, then taking it all back to close green.  The action created a massive reversal hammer on SPY. This morning, futures are boldly green as reports circulate that China is moving to reduce / eliminate the auto tariffs Trump tweeted about.

It was interesting QQQ outperforming yesterday. Maybe a signal the tech sell off has burned itself out at least for now. IWM remains weak. It reversed but still closed red and below resistance.

Financials remain a wasteland. They’ve even finally found JPM and took it down almost 2% despite broad market reversal.  Energy was weak as well. Not sure the OPEC meeting had the desired effect.

So now we find ourselves in rinse and repeat mode.  Channel bottom reversal and heading up.  Last week it was channel high heading down.  I have no way to tell you with certainty if we will reach the high but the move is becoming, dare i say, typical. Maybe this is the start of a Christmas rally till at least until Jay Powell comes into focus next week. Gotta wait n see.

Game planning has shrunk to hours………. level by level. That’s all any trader can do at this point. Stay light and nimble.

Potential Catalysts for Today

Google CEO sits before Congress today and will inevitably be confronted with privacy issues and plans to develop a search engine for China.

NFIB Business confidence and Redbook retail numbers will be reported this morning.

Futures are jumping as reports circulate that China is reducing / eliminating tariffs on US manufactured cars.

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