iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,658 Blog Posts

Open gap in range ;-) NASDAQ up a quick +80 into the week

NASDAQ futures are coming into the week gap up after an overnight session featuring extreme range and volume. Price began the Globex session gap down by about -150 handles. Since then price worked higher, trading up to the Friday midpoint before coming into balance. As we approach cash open, price is hovering just below the Friday midpoint.

On the economic calendar today we have pending home sales at 10am followed by 13- and 26-week T-bill auctions at 11:30am.

Last week the broad market bounced after nearly a month of discovering lower prices. Monday began with choppy weakness. Tuesday was gap up and buyers were in control through Thursday. Friday was choppy and two way before a sharp move lower took us 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 gap down into the lower quad of Thursday’s range. After a tight chop for most of the day buyers stepped in and worked higher but were unable to close the overnight gap before that selling spike hit late in the day. We ended at low of day, in a neutral print.

Neutral extreme down. Inside day.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7572.25. Buyers show up ahead of 7500 and two way trade ensues.

Hypo 2 stronger sellers trade down through overnight low 7365. Buyers show up just below, around 7360 and two way trade ensues.

Hypo 3 buyers gap-and-go higher, trading up through overnight high 7690, tagging 7700 on the way to 7738.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Mixed signals into month-end

Spring vibes are in full effect up here in the murder mitten today, with birds chirping and an electric green hue taking hold on the ground and trees. Otherwise the local scene is rather grimy.

We have a governor mandated shelter-in-place, which quite honestly has only modestly changed my professional and personal routines. The hustle has always been a remote endeavor for humble Raul. Last week I traded well up until Friday afternoon, when I stuck around later than I normally do and gave back my morning gains. Normally, on a nice Friday in spring, I’d take my morning gains and head down into the city to cavort with the day drinkers, saving me money and allowing me to spread my brand of propaganda locally.

These skype chat happy hours and zoom meetings might need to replace my old routines.

This virus changes everything. I doubt I’ll ever go to a rave or unsanctioned after hours event again without wearing safety glasses and a mask. The human condition is worsening, pestilent and viral.

After preparing the Sunday research and publishing the Exodus Strategy Session, I have mixed signals. There is plenty of reason we could see continuation to the upside, but then Utilities led the charge last week and IndexModel is flagging Rose Colored Sunglasses.  Therefore I am only allowed to short sell the NASDAQ all week. I will be doing so on a limited basis. Ideally an up gap inside the prior day’s range for me to fade. I will not be pressing trades late into the day unless we really accelerate to the downside again.

That’s about it. I am looking to buy more Microsoft and Google and swap out my Goldman position for Square. Ideally I buy into big down days, when things appear their worst. But who knows, I may have to chase the great ones.

My oil positions don’t feel good, WES and PTR, but I never expected them to. I shall stick with them for quite a while.

On Wednesday morning my quant strategy rebalances, hopefully I have time to share my latest thoughts on that project here.

That’s all for now. Trade’em well.

Raul Santos, March 29th, 2020

Exodus members, the 279th edition of Strategy Session is live, go check it out.

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Open gap in range ;-) here is Friday trading plan

NASDAQ futures are coming into Friday gap down after an overnight session featuring extreme range and volume. Price was balanced overnight, ticking up near the Thursday high but not exceeding it, forming a weak high before falling out of balance around 8:30pm New York. From then on, the Globex session was spent drifting lower. The first tag of the Thursday midpoint saw responsive buyers actively engaged, but they were eventually over run via a slow grind lower.  As we approach cash open, price is hovering below the Thursday midpoint at 7700.

On the economic calendar today we have University of Michigan’s final reading of sentiment at 10am.

There will likely be continued attention on capitol hill today, as we await the approval of the $2+T relief package to clear the house.

Yesterday we printed a normal variation up that was accented with a late-day ramp higher. The day began with a gap up and drive higher, leaving the open gap behind as buyers worked up to the 7700 composite VPOC. We marked time along this level, chopping up above the mid all day before a strong surge higher into the closing bell. This late-day action took prices up into the upper quadrant of the Friday the 13th range. We ended the day near the highs.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7846.50, setting up a move up through overnight high 7893.25. Look for sellers up at 8000 and two way trade to ensue.

Hypo 2 stronger buyers sustain trade above 8000 setting up a second leg higher to 8100. Look for sellers up at 8179.50.

Hypo 3 sellers press down through overnight low 7618.75 setting up a move down to 7526.25 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Open gap in range ;-) here is Thursday NASDAQ trading plan

NASDAQ futures are coming into Tuesday with a slight gap down after an overnight session featuring extreme range and volume. Price was balanced overnight, slowly fading lower in a balanced way until taking out Wednesday low. At 8:30am initial/continuing jobless claims data came out worse than expected. As we approach cash open, price is hovering in the lower quadrant of Wednesday’s range.

Also on the economic calendar today we have 4- and 8-week T-bill auction at 11:30am followed by a 7-year note auction at 1pm.

Yesterday we printed a normal variation up. The day began with a gap up that sellers quickly resolved shut before buyers spiked price. Before 10am sellers were fading this buy spike and sending price to a quick new low of day. This all happened in the first 45 minutes of trade, and would mark session low for the rest of the day. WE slowly rotated back up to the midpoint, then buyers accelerated as they crossed through it, setting up a move to new high of day and pushing us range extension up. We eventually tagged the 7700 composite VPOC and held it for about 1.5 hours. Sellers drove price back down through the mid during settlement.

Heading into today my primary expectation is for buyers to fill the overnight gap up to 7463.25 then continue higher, up through overnight high 7549.5. This sets up a run to 7600 before two way trade ensues.

Hypo 2 stronger buyers trade up to 7700 before two way trade ensues.

Hypo 3 sellers press down through overnight low 7310.25 setting up a move to tag 7300. Look for buyers down at 7216.75 and two way trade to ensue.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ hold gains for a third day, here is Wednesday trading plan

NASDAQ futures are coming into Wednesday with a slight gap down after an overnight session featuring extreme range and volume. The overnight was balanced until about 4am New York, balancing in the upper half of Tuesday’s range before spiking higher. The spike saw price trade to levels unseen since Friday the 13th before sellers stepped in and returned us back into balance. At 8:30am durable goods orders came out stronger than expected. At 9am house price index came out a touch below expectations. As we approach cash pen, price is hovering in the upper quad of Tuesday’s range.

Also on the economic calendar today we have crude oil inventories at 10:30am, 2-year note auction at 11:30am and a 5-year note auction at 1pm.

Yesterday we printed a neutral extreme up. The day began with a gap up into the top quad of Monday’s range. After a two way open auction buyers stepped in and worked up through the Monday high, tagging the upper weekly atr band before sellers stepped in and reversed the entire daily range, putting us neutral. Sellers stalled out just a few ticks below low of day and we ramped higher for the rest of the session, closing at high of day.

Neutral extreme.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up to 7700 before two way trade ensues.

Hypo 2 stronger buyers close the Friday the 13th gap up at 7901 before two way trade ensues.

Hypo 3 sellers press down through overnight low 7377 setting up a move down to 7216.75 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

 

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NASDAQ circuit breaker up overnight, off the highs, here is Tuesday trading plan

NASDAQ futures are coming into Tuesday up a quick +270 after an overnight session featuring extreme range and volume. Price worked higher overnight, rotating upward throughout the globex session before triggering a circuit breaker around 5:40am New York. Since then we are about -100 off the overnight high. As we approach cash open, price is trading in the upper quadrant of last Friday’s range.

On the economic calendar today we have Markit composite/manufacturing/service PMI at 9:45am, new home sales at 10am, a 52-week T-bill auction at 11:30am and a 2-year note auction at 1pm.

Yesterday we printed neutral day. The day began with a gap down after futures were limit down Sunday evening. A strong bid entered the market around 8:10am and erased the large gap before opening bell. From there sellers pressed into the opening tape, trading down near last week’s low before buyers stepped in and a two way auction formed. Around noon sellers took the market range extension down and to new swing lows before discovering a strong responsive bid. Said bidders worked to a new high of day putting us into a neutral print. From there we fell back to the midpoint and chopped along it, eventually closing above it but settled near the middle of the day’s range.

Neutral.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up to 7480.25 before two way trade ensues.

Hypo 2 stronger buyers sustain trade above 7495 setting up a run to 7600. Stretch target 7700 composite VPOC then 7901 open gap.

Hypo 3 sellers work into the overnight inventory and close the gap down to 7002.25. Sellers continue lower, down through overnight low 6953.50. Look for buyers down at 6900 and two way trade to ensue.

Levels:

Volume profiles, gaps and measured moves:

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Net buyer this week

No trading report for Monday. NASDAQ futures are moving incredibly fast, up over 300 handles in the last ten minutes or so, then off that high by 100 handles.

I made my plan Sunday and last week and it is simple—add to my MSFT and GOOGL positions and whenever PTR reports (it’s hard to pin down these Chinese ADRs) add to PTR.

If the futures settle down a bit, I may reengage.

Expecting 7490 on the June NASDAQ to be an upside ceiling early in the week. If not, that opens the door for a run up to 8000.

Levels:

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Sickness at the House of Raul

I’m sick.

So many red flags were raised before markets collapsed. Most significantly, the failed auction printed February 14th on the PHLX Semiconductor index. Legacy readers of the Humble Raul blog (HRb) will recall the promise I made to readers and myself on October 2nd, 2014, to never miss another failed auction. I didn’t so much miss our most recent failed auction, but I did not assign enough weight to this ominous print on the index that literally tracks the main industry driving out secular bull market:

I think I am sick. My mind is so constantly optimistic that I just sheltered in place and held all my positions into the downturn. And now, when a recession all but seems guaranteed, I am not even giving a single thought to selling. On the contrary, I am feeding fresh cash into my account and buying more equities.

I became an oil man last week. When has Raul ever been an oil man? I abhor the oil industry, an archaic space dominated by patriarchal fools more out of touch with reality than a hobo on PCP. This is what I am talking about, sick.

IndexModel, which is my foundation stone for decision making, signaled Bunker Buster finally. This signal calls for an acceleration to the downside eventually marked by a sharp, excess low that holds for weeks (sometimes months). It has been a challenge for me to day trade, historically, when this signal fires. Therefore I will back away from the futures despite riding some nice rips last week.

Instead I will be focusing on acquiring a few long-term stocks and/or adding to existing positions. I do not want to go too exotic with these holdings. I was talking with my China correspondent yesterday, ROBERTO BREGANTE, and he couldn’t speak highly enough about the effectiveness of Microsoft Teams for keeping their projects moving in our remote business environment. And we started reflecting on how well Google and Microsoft were prepared for us to go remote as a species. We mutually agree and realize that professionals are realizing how effective they can we without flying around and sitting in meetings. Flying in for a meeting is old school and the cognitive shift underway may render physical meetings nearly extinct. So a part of me is like, why not just add to my Microsoft and Google positions? They are not going away anytime soon and their profit margins are huche [sic].

This shift to remote work was supes overdue. Hotels and airlines suffer. Anyone empowering effective conduct of remote business wins. Robots also win. More necessary things, like doctors and cashiers need to be like car washes. the less physical human contact the better. Have you ever seen Demolition Man?

That’s it. I am all tapped out of Pacific Northwest mystic energy. I am hunkered down in Mothership and working—trading, taking lots of phone calls and emails, cooking tasty food and readying my plots for sewing. I have a variety of heirloom seeds and my only real regret is not having built the hot house yet that has been on my mind for years.

Sick I tell you. Infected with perma optimism and bullishness.

Raul Santos, March 22nd 2020

Exodus members, in Section III I discuss all the systematic signals I am leaning on in more detail. The  278th edition of Strategy Session is showing some interesting data, be sure to check it out.

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NASDAQ holds Thursday gains overnight, here is Friday trading plan

NASDAQ futures are coming into Friday gap up after an overnight session featuring extreme range and volume. Price was balanced for much of the overnight session before ramping higher around 2am New York. This buy rotation pressed up beyond the Thursday high, trading up to levels unseen since last Friday (the 13th) before coming into balance. As we approach cash open, price is hovering just below the Thursday high.

On the economic calendar today we have existing home sales at 10am.

Yesterday we printed a normal variation up. The day began with a gap down and drive lower, with sellers pressing down a bit below the Wednesday midpoint. This was an interesting price level, one that has been marked on my chart for months. Just below the Wednesday midpoint (which was also a distinct low volume node) was the old composite VPOC. Anyhow responsive buyers stepped in here and quickly resolved the overnight gap. From here we continued higher, taking out the Wednesday high and tagging the lower weekly ATR band before rotating back to the daily mid. Another rotation up made a new high of day, we chopped back to the midpoint again, then made another new high. Settlement action saw price fall back to the midpoint for a third time and close just above it.

Heading into today my primary expectation is for sellers to work into the overnight inventory to tag the Thursday VPOC 7380. From here we work higher, taking out overnight high 7629 on our way to tag 7700 composite VPOC before two way trade ensues.

Hypo 2 stronger sellers work a full gap fill down to 7256.25. This sets up a move down through overnight low 7126.25. Look for buyers just below at 7100 and two way trade to ensue.

Hypo 3 buyers gap-and-go higher, pressing up through 7700 with power, setting up a run on 8000.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ wanders in balance overnight, here is Thursday trading plan

NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Price took out Wednesday’s high and held above it until about 9pm New York when price reversed lower. Sellers worked price back down through the Wednesday midpoint and further, down near the lower quad of Wednesday’s range. Sellers were unable to take out Wednesday low before we began rotating higher. This up rotation stalled out near Wednesday high before we fell back to the Wednesday midpoint.

In short, balance.

As we approach cash open, buyers are rallying price up off the Wednesday midpoint and we are down about -60.

On the economic calendar today we have leading index at 10am, 4- and 8-week T-bill auctions at 11:30am and a 10-year TIPS auction at 1pm.

Yesterday we printed a normal variation down. The day began with a gap down near Tuesday low. Buyers drove higher off the open, working up through the Tuesday midpoint but unable to close the overnight gap before sellers stepped in. Said sellers reclaimed the midpoint and pivoted from it, making new low of day to press range extension down. Sellers continued lower, marking a new swing low. Late in the session we ramped back up through the midpoint and closed in the upper quadrant.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7205.50. From here we continue higher, up through overnight high 7424. Look for sellers up at 7432.50 and two way trade to ensue.

Hypo 2 stronger buyers sustain trade above 7432.50 setting up a move to tag 7500. From here we probe above the Tuesday high 7537, setting up a move to tag the composite VPOC at 7700.

Hypo 3 sellers press down through overnight low 6874.25 on their way down to 6800 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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