Weekend Profit Navigator June 21

Tickers discussed: SPY QQQ IWM GLD GDX BX FB SEAS SIX  Put / Call ratio

The Weekend Profit Navigator provides a big picture stock market analysis for the week just past with a look ahead. 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 – Changing your Self-talk

Selftalk is your internal dialogue. It’s influenced by your subconscious mind, and it reveals your thoughts, beliefs, questions, and ideas. Selftalk can be both negative and positive. It can be encouraging, and it can be distressing

Traders can be really harsh on themselves. The problem is that the brain listens and believes the things we say to ourselves. Negative self-talk can be a powerful destructive force in our trading and out lives in general. Whenever we call ourselves we are morons, idiots or losers after bad trades, it begins a reinforcing negative feedback loop where we begin to expect negative outcomes. We can reverse the whole thing by flipping the script to positive self talk where we learn from mistakes, talk positively to ourselves, and form a positive feedback loop.

A great way to start changing your self-talk is to talk to yourself as you would a student you are mentoring. If the student makes a mistake, how would you talk to them or coach them?  Probably in a much kinder, more constructive way than you’d talk to yourself. It’s a big topic. Here are some reference materials that will help.

Find a nice article / Post on the topic of Self-talk HERE

A book I have had for 20 years is great.  “What to say when you talk to yourself”  Shad Helmstetter     $12 on Amazon  HERE

Earnings

Market Graphics

Tracking Robinhood Traders

1 week increases and decreases.   Follow along at www.robintrack.net

Waiting for catalysts to play out 

Trading has been choppy and is expected to remain so as whipsaws from Covid, Trade, and economic headlines jerk price around

Bullish Catalysts

  • Sequential Improvement:  When you are starting at almost zero, each economic report will show improvement. Because of the low base, econ data should show sequential improvement over the next few months.   That should be equity bullish.
  • Unlimited FED Support.   Expect the Fed to step in with bazookas blazing if the market begins to tank.   Massive downside scenarios will likely be mitigated.
  • Fiscal Round 4:  If Congress can muster an infrastructure program, extend covid benefits or other wise pass added stimulus, it will be well received.

Bearish Catalysts

  • Covid Resurgence.   AZ, CA, FL, NC, SC have record number of new cases with new hot spots emerging in other states. Some say cases don’t matter, only hospitalizations. I think municipalities will react to case count.
  • Bank Stress Tests:  Banks report stress tests this week. FED is adding a Covid layer to the tests.  Banks failing the tests or if divvies are suspended to meet capital requirements would not be good.  New loan loss provisions would be bearish as well.  Of course, this could be bullish if all goes well . 
  • Biden Surge:  If a Democratic sweep in November seems more likely, may be drag on market as Trump Tax cuts may be reversed in 2021.
  • Liquidation Sales:  Retailers are facing an onslaught of “going out of business” sales and other liquidations
  • Fed Balance Sheet rate of change:   After the initial surge, the rate of Fed balance sheet growth is slowing.  How would you like it if your spendable income was decreasing each week? Market may not like the fact that excess liquidity is slowly being reduced.  Last week, the balance sheet actually went down.
  • Put – Call Ratio getting / has been at extremes.   Sentiment Trader posted this factoid that has been highly publicized. It doesn’t matter till it does.

  • Policy Fatigue:  For whatever reason Covid benefits are allowed to roll off, that would be equity bearish.
  • FED in Election Season:  Historically the FED has not wanted to be very active leading into election season.  Their resolve would be tested if market needs support but they do not react for fear of being charged with interfering in election politics.  They may have an incentive to front run programs before September to avoid this.
  • CPCE / CPCI divergence.   Humble Student of the Markets points out that the Retail sensitive put / call ratio ( CPCE) is diverging greatly from the dealer focused Index put / call ratio (CPCI ) Historically this type of divergence resolves bearishly.

Relationships to Watch

  • $USD :  Weakening US Dollar should be equity positive.  A rising Dollar has been a risk off / fear trade.
  • Oil:  Oil has been trading pretty much in lock step with equities. There is a gap to fill to $42 on the WTIC chart.  Watch for a break above to help confirm re-opening reflation trade. A break back below $40 and further slide would show eroding confidence in the continued re-opening trade.
  • Yields:  Up is bullish; down is bearish.

The Oscillators – Weekly $NYSI and $NASI

These are summation indexes of the NYMO and NAMO we’ve been looking at on a regular basis.  Notice they are both at the high end of the range. Tough to use these as pure timing signals but they are good to color and inform your positioning. The NASI looks particularly overdone but remember, these serve as yellow flags, not outright sell signals.

 

Charts in Focus

$FB Facebook

A move above $240 coupled with a bull cross on the PPO and RSI break above trend sends this higher and would offer a nice line at $240 to stay long against. Traders already long could move their stops up to just below $240 to protect embedded gains.

$BX – Blackstone

Asset manager Blackstone recently survived a 50ema test and has since reclaimed all the ema’s. A move above $59.50 into the gap likely fills to $61 with the possibility of tagging the recent high of $64

$SEAS – SeaWorld

Price is testing the low side of the channel / bear flag.  Set an alarm at $15.50 / $15 to get short on a break. Looking for $13 as a T1.  If you are bullish here is the spot to step in w/ a tight stop. Given RSI has broken trend and dipped below 50 and PPO already having put in a bear cross, I favor lower.

$SIX – Six Flags

Another theme park. Its possible that as Covid cases surge, it is taking the air out of these theme park stocks. On Friday, price closed below it’s 50ema and all of the other ema’s as well. It’s also dropped out of the channel / bear flag.  While price is below $22, I think it can find $17 as T1. If the market weakens or Covid spikes more, March lows are not unrealistic an expectation if $17 breaks.

$GLD – Gold

Gold needs to pop this consolidation above $164.25 to get it going. The measured move on a breakout is $170. With price above all the ema’s chances are good. Jump on this or the miners on a break out. Set alarms.

$GDX – Gold Miners

After a 6 week consolidation, this looks ready to pop as the PPO resets at the zero line, RSI has a trend line breakout primed and price closes above all the ema’s and trying to take out the downtrend line .   I am in GDX JUL 34 Calls.   Ready for this to go.

Index Charts

$SPX Broadening Top

$SPY Weekly

SPY Daily

$QQQ Weekly

QQQ Daily

$IWM Weekly

$IWM Daily

 

Get inspired, empowered and prepared. Join us!

As the host of Trader’s Profit Compass, I work hard to inspire, empower, and prepare aspiring traders to face the markets with fortitude, quiet confidence and inner calm. It’s a protein-rich, sugar free environment without ego or judgement. While I can’t promise that joining our group will change your life, I’d like to think it will help your trading. Give it a spin!  Nothing to lose and potentially much to gain.

Our group of aspiring traders are into active swing trading using technical analysis to find objective, high-probability,  low-risk trades.  Using these processes we’ve been fortunate to be winning; not perfect but winning. If that is appealing to you, join us!  I’d like to think you’d benefit from the work.  You’ll get premium  content 6 times a week including a copy of my Daily Profit Compass, Weekend Profit Navigator,along with other actionable content delivered directly to your mailbox. You’ll even get an invite to our new trading room on SLACK.

Registration is simple and FREE   Visit our homepage   HERE

Spread the word?

Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on pinterest
Pinterest

Leave a Reply

Your email address will not be published. Required fields are marked *

Let's do this.

Subscribe to the Daily Profit Compass now. It’s 100% FREE.

Website powered by RapidWebLaunch