iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,551 Blog Posts

NASDAQ slight gap up into Monday, here is the morning trading plan

NASDAQ futures are coming into Monday gap up after an overnight session featuring extreme volume on extreme range.  Price shot higher Sunday evening when Globex opened for trade, with price rallying up beyond the Friday midpoint before reversing the entire spike and more throughout the early A.M. hours.  As we approach cash open, price is balanced out in the lower quadrant of last Friday’s range.

On the economic calendar today we have Markit composite/manufacturing/service PMI at 9:45am followed by 3- and 6-month T-bill auctions at 11:30am.

Last week U.S. index prices marked time through the beginning of the week after coming into Monday gap down.  Participants appeared to be waiting for the FOMC rate decision Wednesday before taking action.  After the rate cut sellers stepped in and drove prices lower before being overrun by strong buying.  The strong buying continued into Thursday morning before prices eventually reversed and returned to the lows of Wednesday by the end of the week.  The last week performance of the major indices is shown below:

On Friday the NASDAQ printed a double distribution trend down.  The day began with a gap up to about the midpoint of Thursday’s range which sellers quickly resolved lower.  Sellers then took out Thursday’s low and accelerated price down into the post-FOMC spike, trending down below the Wednesday low by a few ticks before discovering a responsive bid.  Buyers nearly worked price back up to the daily midpoint before sellers stepped back in and returned price near the lows.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7832.  From here we continue lower, down through overnight low 7814.  Look for buyers just below the 7800 century mark at 7796 and two way trade to ensue.

Hypo 2 stronger sellers sustain trade below 7796 triggering a liquidation down to 7743.25 before two way trade ensues.

Hypo 3 buyers work up through overnight high 7897.50 and continue higher, up to 7900 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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There is a high probability something will take this market down next week

I don’t deal in geopolitical, fiscal policy or sensational narratives behind stock market moves.  I digest a bunch of raw data every Sunday in form of price and volume—and not just volume at a specific time—where it occurs and what it accomplishes.  Then I dig down into the internals, update my charts on a few key sub-indexes, review the big news from last week and how the market reacted, see which public companies rocketed or tanked on earnings or other news and then finally I add in a layer of sentiment.  Add all that up, and I am bearish heading into next week.  These are a few of the most pertinent details regarding my bearish call heading into the week.

IndexModel, my auction theory model, signaled Rose Colored Sunglasses, the only bearish signal it generates.  Other recent signals were August 11th and June 16th, and going back to 2015 the hit rate on this signal is high.  So when I write a blog title that says “high probability” it is actually backed by a data set that is measured and tracked.  Not just some careless tweet.

The PHLX semiconductor index printed a failed auction last week.  Here is a picture of what I mean:

Most of you jokers don’t pay attention to my work, but the upside down version of the failed auction above happened on the NASDAQ Transportation index at the beginning of September and was what precluded the rally.  This was my note on September 1st:

Since this week’s failed auction is on the semiconductor index, and since semiconductors are the key driver of the entire stock market rally since 2016, the situation deserves a bit more attention.

Thirdly, the current picture of the NASDAQ transportation index is rather bearish also.  Looks like an island top:

Fourthly, last week saw investors rotate into UTILITIES, the most risk-averse sector in the financial ecosystem.  The only other strength last week was seen in low quality sectors.  Meanwhile consumer discretionary was weak.  BIG RED FLAG:

If you drill down into the industry-by-industry performance from last week, the picture becomes more clear.  Key industry groups saw significant outflows last week:

The third move after the Fed rate decision was down.  That had me leaning bearish Wednesday and as you might imagine, I had to tuck and run when then powerful rally blew through late Wednesday.  I was on the road for business the rest of the week, but sure enough, sellers worked us back down to the weekly low.  I am talking NASDAQ prices.  Sellers took control of the tape.

Finally, I listen to other traders, the real OGs and otherwise, through a variety of methods—-Twitter, newsletters, internet videos, and so on.  Coming into the week I picked up on a tone of arrogance, borderline hubris.  My mentor always like to say though, which drives me nuts, “if you see it, you be it.” I know what it looks like because it is inside of me too.  And usually the market whips me back into obedience.

So there you have it, my bearish thesis over the next five days.  It’s an uncomfortable call with markets near record highs and the Fed LOWERING interest rates, which disgusts me.  Maybe some news bit or Presidential tweet will come to my bearish aide, or not, or the opposite.  I have no idea and anyone who claims to is a liar.

My plan is to establish a position short via SQQQ at some point early next week and ride the position through late Friday. I will also only be working the short-side of the NASDAQ 100 tape, intraday, fading overnight gap ups, “going with” downward crosses of the daily mid point if I have an open overnight or range extension stat, and selling into any rallies into the key price levels highlighted during the morning trading reports.

Nothing fancy.  It’s all quite simple actually, and wholly independent of any world happenings.  Do you know how satisfying it is?  To love thy discipline and let it support me?  Making my way through the world, no one’s master and no one’s slave?

Really nice.

Raul Santos, September 22nd, 2019

Exodus members, I basically outlined this Sunday’s Strategy Session above, but there are more details in the report, which is live now.  Go check it out!

 

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Back at the scene of the Persian crime heading into live Fed rate decision

NASDAQ futures are coming into Wednesday with a slight gap down after an overnight session featuring elevated volume on normal range.  Price held balance in the upper half of Tuesday’s range overnight.  As we approach cash open, price is hovering near Tuesday’s high print, which is back at the “scene of the crime” the price level we sold off from Sunday evening once futures opened for trade and we able to react to the Iranian/Persian drone attack on Saudi Arabian oil equipment.

On the economic calendar today we have crude oil inventories at 10:30am.  These numbers may garner more attention today, given the geopolitical backdrop this week for oil.

Also on the economic calendar today we have an FOMC rate decision at 2pm followed by a press conference from Federal Reserve chairman Jay Powell.  Fed fund futures on the CME are currently pricing a 61.2% chance of a rate cut.  This is a live meeting, and the commentary afterwards is likely to offer clues into the Fed’s thinking.

Yesterday the NASDAQ printed a normal variation up.  The day began flat and we chopped sideways for most of the session until about 3:30pm when we ramped higher into the bell, going range extension up and pressing price back to the scene of the crime from Sunday night.  We ended the day near session high.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7914.25.  From here we continue higher, up through overnight high 7921.50.  Look for sellers up at 7936.50.  Then look for the third reaction after the FOMC rate decision to dictate direction into end-of-day.

Hypo 2 stronger buyers trade up to 7976.25 before settling into two-way chop.  Then look for the third reaction after the FOMC rate decision to dictate direction into end-of-day.

Hypo 3 sellers press down through overnight low 7887.25 setting up a move to target 7866.50 before two way trade ensues.  Then look for the third reaction after the FOMC rate decision to dictate direction into end-of-day.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ balances out overnight after oil shock, here’s the Monday trading plan

NASDAQ futures are coming into Monday, the first full trading week with active traders mostly on the December contract, gap down after an overnight session featuring extreme range and volume.  The Globex session began with a gap down and drive lower after news of a drone strike late Saturday night on key Saudi Arabia oil facilities.  Price traded down into last Tuesday’s range before discovering a strong responsive bid.  Buyers were unable to erase the entire overnight move, but as we approach cash open, price is balancing along inside of last Wednesday’s range.

On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.

Last week saw weakness across most of the equity complex during Monday/Tuesday trade, with a very apparent bullish divergence happening in the Russell futures.  That told the story as strength entered the market Wednesday and Thursday before we faded a bit into the weekend.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a neutral extreme down.  The day began with a slight gap down that was resolved during the morning two-way auction.  Price went range extension up briefly, probing into the Thursday range before being rejected away by sellers.  Then most of the session was spent chopping along the daily low, marking time, eventually closing near session low.

Neutral extreme down.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7910.  Look for sellers here and two way trade to ensue.

Hypo 2 sellers work down through overnight low 7798.25.  Look for buyers down at 7796.50 and two way trade to ensue.

Hypo 3 stronger buyers sustain trade above 7910 setting up a move to target 7936 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Just when things were calming down

Volatility was tapering off these last two weeks, what with everyone busied by the transition out of summer, back to school, and then the Labored day rest Monday for all the lazy Americans.  The gambling halls over in Chicago were placing 80% odds of another 25 basis point rate cut this upcoming Wednesday and the football sport is back live.

Then late Saturday news starts to come onto Twitter that half of Saudi Arabia’s oil production was halted by a drone attack.  And now everyone is tuned in to see the way this news will hit prices, of all assets, come 6pm New York when futures open for trade.

For my part, I did the usual Sunday routine, albeit a bit later in the day due to travel.  I counted and judged price charts and volume stuff and compiled the input into IndexModel.  It spit out a bullish reading.  Now I am going to relax and prepare my yard for the large shipment of stones coming as part of Phase II of the Mothership Grass Elimination Program.  Then maybe I will do some light reading then make to go to sleep.

Then I will wake up, assess the NASDAQ 100 with a morning report, then begin trading some time around 8:30-9am-or-so.

You see none of this really matters.  Yes, everything is delicately interconnected but the market is the market and the order flow is the order flow—-everything I need to see is shown by the auction on the NASDAQ 100.  If I want to look deeper the only thing that matters are NASDAQ 100 internals.  Oil is not mattering so much.  The Fed rate cut is not mattering so much, despite being the most careless Fed policy of my lifetime.  American football does not matter, a distracting game to keep the masses sedated and punching the time clock.

All that matters is extracting fiat american dollars from the global financial complex and converting said dollars into land and machinery as far north and at as high an altitude as our constitution allows.  Said land will be fitted with as many wind turbines and solar panels as possible, all of which serve to charge the batteries of all the machines.  Any excess fiat dollars will be stored in Bitcoin for future negotiations over pirated energy from…pirates and privateers.

Nothing else matters.

Trust is at an all-time low.

Raul Santos, September 15th, 2019

Exodus members, the 252nd edition of Strategy Session is live, go check it out.

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Quick update on Tesla

I don’t have much time.  This week, like the past several weeks, is being truncated by weekend plans.  I am headed north a-gain, but this time by cycle.  For some disturbing reason humble Raul agreed to a 100 mile biking expedition up into the Murder Mitten.  Do not ask me why I thought this was a good idea.  I have not ridden a bike cycle in more than six years after giving up on the triathlon circuit.

You see, at some point, I forget the exact age, you enter the bracket where you are racing against something like 25-35 year olds.  In the racing community, these are not sane people.  They neglect their families, their jobs, even their health in the name of racing.  They pump themselves full of the latest stimulants and sit around all day eating boiled chickens.  They were unbeatable, and why the hell should I be doing triathlon races if I know I cannot win?

I only do things expecting to win, which is why I trade the open auction as often as possible in the NASDAQ.  Open gap in range?  Come to mamma.

MOVING ON, because time is limited….

I have kept very quiet about Tesla for most of 2019.  In April of 2018 I posted this chart:

It was based on a simple auction theory mechanism, the FAILED AUCTION.  It is the same theory that caused me to become bullish on the NASDAQ transportation index two weekends ago, this note is from the September 1st Exodus Strategy Session:

While most of you run around, hounding online gurus for their opinion on the state of the markets or whether to sell some stupid stock you opted to buy, I am over here, exercising contempt for all things NOISE (cough, cough, Trump tweets) and keeping my attention on the auction.  The result?  I’m regularly ‘proven right’ by the stock market.

Wild, I know.

BUT RETURNING TO TESLA.  For the love of all things DADDY, if you cannot see that Tesla is the top investable company publicly traded, I am not sure what more I can tell you.  Investing is not about fucking price/sales ratios or cash flows—it isn’t.  Think more along the lines of mega churches.  Investing is about FAITH.  Anyone who says otherwise is a liar.  Nobody, I repeat NOBODY knows what the world will look like in three years.  It takes faith.  I choose to have faith in a company that believes in a better Earth, and a leader who is pragmatic enough to realize humans as a collective are trash and unlikely to change their ways—a leader who is laying the groundwork for our children to evacuate Spaceship Earth once it is totally destroyed by wanton meat factories and gasoline combustion.

Let’s just say, for the sake of argument, that their is no human effect on climate change, that all the science being proven and repeated all around the world that shows humans having a major effect on climate change is all bullshit propaganda.  Would it be so terrible to live a life that improved the ecology of earth for all its inhabitants?

The answer is a clear no.  And in living a more compassionate lifestyle while investing in solar panels and electric cars and not consuming animal flesh not only will you save the planet, but you will also virtue signal.  This will make you rise above your peers in the competition for breeding with the finest genetic mates.

This should make it very clear to you, the reader, why Tesla could be the largest investment holding you own.  And don’t give me that passive index investing bull shit.  Americans in general are over diversified.  They can all expect to produce mundane returns and live mundane lives.  Fine.  I am from the school of thought that life is about being sexy and doing cool stuff.

If you are a risk averse person who simply wants a home, two cars and 2.5 children, by all means, index your little heart away.  I am out for much, much, more and I’ll fight like hell to get it.

Tesla and Twitter are my largest concentrated investments by quite a bit.  Neither shall be sold or even considered for sale until TSLA is a 1,000 print and MAYBE TWTR back at all-time-highs.  Maybe.

There you have it.  This blog has not wavered on its conviction in Tesla.  This long-term investment is akin to Christians believing that Jesus Christ was the son of God, and that he will sheppard his people into heaven.  Elon is my Daddy.  The Leader Is Good, The Leader Is Great!

Raul Santos, September 11th, 2019

 

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NASDAQ slight gap up into 9/11 anniversary, here’s the Wednesday trading plan

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring extreme range and volume.  Price worked higher overnight, tradig up above the Monday midpoint before settling into balance.  As we approach cash open, price is hovering above Tuesday’s range.

On the economic calendar today we have crude oil inventories at 10:30am followed by a 10-year note auction at 1pm.

Yesterday we printed a normal variation up.  The day began with a gap down and drive lower.  Sellers drove price down to a new two-day low, probing into the top-side of a multi-week range that price broke away from last Thursday after President Donald Trump tweeted something positive regarding tariff talks between U.S. and China, saying they would resume in October.  Buyers stepped in ahead of the rally point and began working price higher, eventually reclaiming the midpoint by New York lunch and rallying up and away from it to go range extension up.  A retracement to the mid was defended by buyers who eventually ramped price back to the daily high near end-of-day.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 7847.50.  Look for sellers just above at 7849.25 and two way trade to ensue.

Hypo 2 sellers press into the overnight inventory and close the gap down to 7815.50.  From here we continue lower, down through overnight low 7786.50.  Look for buyers down at 7800 and two way trade to ensue.

Hypo 3 stronger buyers sustain trade above 7850 setting up a move to tag 7879 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ a tad lower heading into Tuesday, here’s the morning trading plan

NASDAQ futures are coming into Tuesday gap down after an overnight session featuring extreme range and volume.  Price worked lower overnight, trading down through the Monday low briefly before consolidating inside the lower quadrant of Monday’s range.  As we approach cash open, price is hovering along Monday’s low.

On the economic calendar today we have JOLTS jobs openings at 10am followed by a 3-year note auction at 1pm.

Yesterday we printed a normal variation down.  The day began with a gap up that sellers quickly resolved lower.  Price stabilized along the unchanged line for a bit before buyers worked price back up near the opening prints.  Buyers held the high line until about New York lunch when sellers pressed us range extension down.  Selling pressure persisted throughout the afternoon until we ramped back up to the daily midpoint late in the day.   Value never shifted lower despite us spending more time near the lows.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7830.75.  From here we continue higher, up to 7848.75 before two way trade ensues.

Hypo 2 sellers press down through overnight low 7781.75 then tag 7741.75 before two way trade ensues.

Hypo 3 sellers ‘check back’ to the scene of the tariff talk rally, trading down to 7719.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Volatility recedes, slow news week ahead, here’s the Monday NASDAQ trading plan

NASDAQ futures are coming into Monday with a slight gap up after an overnight session featuring normal range on extreme volume.  Price worked slightly higher overnight in a balanced manner, slowly working up through the Thursday/Friday high before settling into balance.  As we approach cash open, price is hovering right at Friday’s high.

On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am and consumer credit at 3pm.

Last week was shortened Monday, with U.S. markets closed in observation of Labor Day.  We came into Tuesday with a gap down and saw selling pressure through late Tuesday when responsive bidders began to show up.  We went gap up into Wednesday and Thursday before finding responsive sellers, then we consolidated along these highs into the weekend.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a neutral day.  The day began with a slight gap up that sellers worked into then continued pressing lower until about the Thursday midpoint.  Then we came into balance before a spike lower down off the daily midpoint around 1pm pushed us range extension down.  This move formed a sharp excess low, and eventually, late in the session price worked range extension up, putting us into a neutral print.  The day ended with a fade back down to the midpoint.

Super clean neutral day.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 7887 setting up a move to tag 7900 before two way trade ensues.

Hypo 2 sellers press into the overnight inventory and close the gap down to 7857.75 before continuing lower, down through overnight low 7850.50 before two way trade ensues.

Hypo 3 stronger sellers press down through overnight low 7850.50 and sustain trade below here, setting up a move to target 7800 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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IndexModel updated, still bullish

Greetings and good morning to the Humble Raul Blog readership!

I was on the road until late Sunday night, traversing from top-left to bottom right of the murder mitten, and I was unable to muster the strength to prepare an Exodus Strategy Session last night.  Therefore I adjusted my normal casual 8:15 or so wake up time to a more draconian 7am and powered through the weekend research.  It sometimes takes me four hours to prepare the weekend research, but after a long rest and before being bogged down since everyone already used up all the good thoughts of the day I was able to produce the report in record time.  I also had some real clarity the whole way through.

Anyhow I feel ready for the week.  Now I need to feel ready for Monday so I am hopping into a morning trading report.

Hope everyone is adjusting to the transition into autumn well.  Let’s have a strong-beard week.

Raul Santos, September 9th 2019

Exodus members, the 251st edition of Strategy Session is live.  Those NASDAQ Transportation Index moves were THE TELL last week, and it looks like they may be again this week, be sure to check out section IV.  And don’t forget that this Thursday/Friday is an index rollforward—a time rife with fuckery.  Stay sharp into the second half of the week.

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