Egalitarian Conditions Are Normal

261 views

Welcome to the two way market, it’s pretty great if you respect some form of mean revision.

Everyone sleeps on your boy Raul. Perhaps I am not clear enough at times. Maybe it’s these esoteric charts and words putting readers asleep. Maybe the fragmented nature of my existence is confusing for the slow internet types. You would it all be more clear, totally fair.

Aside—thank you Weekly Strategy Session subs. You may not know it, but your contributions fuel insightful research into how the markets tick. I’m grateful for your pittance, for it raised the stakes on my data-keeping skills.

In return you guys, all of you guys (even the public school kids), will know when the data senses a raid on the horizon.

To be honest, you were better served reading the blog than the Strategy Session this week, because I did not fully embrace what the data was saying until after Monday’s giving up the open drive (which “should not” happen).

There’s a lot of day left and no sign of buyers yet. I have no idea what next week will bring, but come Sunday I will so throw a few bucks in the vending machine and grab the latest edition of Weekly Strategy Session.

Pro Gap Down

234 views

Nasdaq futures are lower overnight. Reports of widespread failure by Bloomberg Terminals may be at least partially to blame for the selling which accelerated around 5am. One may think volume would be low if participants were without data, however quite the contrary, volume was elevated to second sigma as was the range.

CPI data came in lower than expected and so far we have not seen any reaction in price. At 10am The primary read of U of Michigan data is out.   The primary read has often been a source of fast intraday Nasdaq moves. Also at 10am we have Leading Indicators and at 1pm energy traders will keep an eye on the Baker Hughes Rig Count.

Yesterday we printed an neutral day, the second neutral day in a row. Price settled right in the middle of the range however, which was unlike Wednesday’s neutral extreme day. Now, given the context of Wednesday’s neutral extreme, it is likely the initiative buyers seen Wednesday will be underwater due to this morning’s developments. Whether they can make a strong and aggressive responsive buy today will be telling. If not, we may see liquidation take hold.

Headed into today, we are priced to open on the low end of Tuesday’s range. The naked VPOC just above at 4386.25 is likely to attract price, as is the overnight gap up to 4414.25. However, today we are dealing with a pro gap, thus it will take significantly more resources to fill.

My primary expectation is for buyers to push into the overnight inventory and trade up to 4386.25 before finding sellers attempt to work down to the overnight low but struggle to take out 4363 and find responsive buying. Two way trade ensues.

Hypo 2, sellers gap and go lower, taking out 4363 early on and trigger a liquidation move down to 4337.

Hypo 3, strong buyers off the open work up to the range gap 4401 before finding responsive sellers who defend the range and churn us back down to 4386.25.

Hypo 4 full gap fill up to 4414.25 then a run for overnight high 4417.50 with a stretch target of the NVPOC at 4435.25.

Levels:

NQ_MP_04172015

Why Are We Up Here?

304 views

Go ahead and take comfort in the gentle markets. This is unbelievable. Conditions look good and stocks are behaving well.

Today the Nasdaq did almost everything a well functioning market would do. Primarily it gave the nearest volume pocket a thorough discourse consisting of assessing the quality of the terrain and deeming it fair footing for buyers to sellers to orderly come together and facilitate trade amongst one another. Anyone who made a transaction today was welcomed to tea sandwiches and soda water on their way out.

Bears and bulls discussed the current events over cigars afterwards and the nearby steakhouse was made busy with folks dressed in business professional attire.

Fine. But that doesn’t create the lower prices I need to ease back in, so here I sit and brood.

Ladies and Gentlemen of The Jury

245 views

Only one short year ago, at this same tax deadline juncture, markets were in ultra extreme turmoil [sic]. Hundreds of thousands of puts were being accumulated each day, VIX was elevated, and more stocks were hitting 52 week lows then highs. It had a different feel. It felt like a sweet opportunity to go long.

This year everyone is cavorting about town with rose colored sunglasses on. They admire the neighbor’s wife while stuffing their faces full of barbecued meats. The collective life of man is in a state of gluttonous bliss, drunk on the spoils of speculation.

Despite my bearish demeanor and willingness to pen it upon the finest internet quarters the world has to offer, I have no intention of proselytizing the bulls. Bulls have done well. The wind is on their buns. Also to clarify, I am mostly long. However, I am not as long as I was on Monday, and I want to be, slowly, from lower.

Working The Gap

189 views

Nasdaq futures are down overnight on an elevated range and normal volume. Price managed to exceed yesterday’s RTH high by 2-ticks before falling back through the entire daily range.

Pre-market we had Initial/Continuing jobless claims data which was mixed and Housing Starts which came in lower than expected. At 10am the Philadelphia Fed data is out and at 10:30am Natural Gas storage.

Yesterday we printed a neutral-extreme up day after the range extension down was quickly rejected and buyers put together an afternoon rally. The profile left behind had a pronounced pocket from 4417.25 – 4411.75. I would expect this area to trade fast on a revisit and afterward we’re likely to spend some time filling it out.

Heading into today we are set to open on the low end of yesterday’s range. My primary expectation is for buyers to work into the overnight inventory and attempt at gap fill. If they can trade up through 4411.75 they likely don’t see much friction on their quest to 4421.50. Then I will look for 2-way trade chop to ensue.

Hypo 2 is sellers defend the volume pocket and start working lower to target 4386.25 then choppy conditions.

Hypo 3 is buyers push the gap fill and continue on to take out the overnight high 4429.50 and target the NVPOC at 4435.

Hypo 4 sellers take out 4380 before finding a responsive bid.

Levels:

NQ_MP_04162015

DOWN

335 views

Hopefully you were able to book a few gains into this afternoon’s strength because come Friday the market intends to ram a fist through your toothy grin. People are way ahead of themselves, like summer is already here.

You may think it is safe to plant annuals, but frost is coming—a frost so thick it will crumble traps and wilt your impatient plantings. Wearing shorts and other revealing clothing will result in frostbitten knees and midriffs.

Today means nothing in the grand scheme of things, an unseasonably warm day. The Nasdaq rallied, the ubiquitous Netflix is blazing higher, Intel pleased investors, Goldman Sachs is being front ran, and energy is making delicious and powerful moves up.

Odds are still elevated for lower prices come Friday’s close. There have been little clues bears are waffling an opportunity here. Their last hope for swift death are the lagging transports. They (I) will point to this chart and pray to Darth Vader if breaks lower.

Watch it closely enough, and you won’t see all the stocks posting double digit gains.

I’m off to devastate dumbbells for being pathetic and light.

 

Deadline

291 views

Tax day is upon us. This day often marks a turning point in the market. Take last year, for example, we were all freaked out by the ultra-violent marketplace. Then, as if a switch was turned, we gracefully ascended from about tax day thru to 4th of July.

This year we have little to fear. Markets are behaving well, the Russell is undergoing a major breakout, and oil has a bid. My hypothesis of a down week calls for Wednesday strength, thus I will stick with my cautious theme.

The Nasdaq trader higher overnight after catching a bid around 3am. No particular economic event stands out at that time. Around 10pm the China GDP data came out in line and on deck for today we have Industrial Production at 9:15am, NAHB Housing Market Index at 10:30am, Crude/Distillate Inventory at 10:30am, and Fed Beige Book at 2pm.

Intel traded higher last night after reporting, BAC is slightly lower after their premarket earnings. On deck this evening are NFLX and SNDK, while C, and GS are set to report tomorrow BMO.

Taking to the chart, we can see the 2-way conditions present. We started the week continuing to explore higher prices. By mid morning the market managed to find sellers and roll. That selling continued into Tuesday before managing to print a decent looking low (excess wicks on candles) before firming up into the close.

Heading into today, my primary expectation is for action early on to fizzle out relatively soon and put us into a holding pattern ahead of the Beige Book. Look for sellers to work into the overnight inventory and test down to 4397. Here I will look for buyers to step in and take out overnight high 4410.75 to target 4414.75 before two way trade ensues.

Hypo 2 buyers take out 4415 early and set up a leg to 4435.25

Hypo 3 we test down to 4381.50 – 4378 before finding buyers and balancing out below 4398.

Levels are highlighted on the following market profile chart:NQ_MP_04152015

Cleaning Up The Nudes

359 views

We haven’t done anything yet in the Nasdaq which is trading essentially flat on the week. The auction has done a good job of cleaning up naked VPOCs. A clue like this tells me the markets are operating well.

My data set suggests everyone came into the week with rose colored sunglasses so my overall consensus is sideways or lower by Friday.

Here are the levels I’m working with on NQ_F*:

NQ_VP_04142015*SOURCE: 04/13/15 -04/17/15 Weekly Strategy Session.

Action Heating Up

268 views

Range elevated just a touch beyond normal overnight while volume came in normal during globex. The market continued pushed lower overnight before finding buyers around Friday’s session low to bring us back flat headed into Tuesday. Advance Retail Sales came in a bit softer than expected at 8:30am and the data encouraged a bit more buying.

This is where the week starts becoming interesting. WFC and JPM earnings are out this morning and neither has made a dramatic premarket move. The financial sector has coiled over time and we may see the compression resolve as the banks earnings continue to roll in. Also important is tonight’s GDP data out of China. All eyes are on the red giant as its stock market soars. Finally, the Nasdaq is likely to be reactive to the INTC earnings scheduled for release after market close.

Yesterday the week started with a small gap up then an open drive higher. Price managed to tag the naked VPOC at 4438.25 and go slightly beyond it before stalling out. Sellers then slowly worked the market lower before accelerating down through the open drive to extend the range lower.

Intermediate term conditions are neutral, but overall context is bull.

Heading into today, my primary expectation is for sellers to make a push to test 4395. Look for responsive buying here. Choppy conditions between 4395 and 4405 give way to another leg lower to target 4382 and a stretch target of 4379 before 2-way trade resumes.

Hypo 2 is buyers push off the open to 4415 where responsive sellers are found and two-way trade ensues with buyers sustaining above 4395.

Hypo 3 is buyers make an aggressive push back above 4415 which leads to a second leg up to 4429.25.

Levels are highlighted below:

NQ_MP_04142015

Take The Ticket

396 views

Please, by all means, pull up a chair. We have to discuss the situation we’re in.

Despite a valiant attempt to mend the charts bulls are stumbling about the china shop. Their hooves are slipping every which way on millions of marbles strewn across the floor by clown suited algorithms. Don’t laugh bears, they intend to exact the same hilarious gag on you.

The markets are no longer permitted to look good for bulls or bears. Much like the internet, they are designed to squeeze profit margins down to extinction. They are destined to test every drop of fortitude you’ve got.

It is your job, your only job, to become exceedingly selective with your trades. I have reduced the number of day trade types I will pursue down to 2 from about 9. Only the milk mates—the crème is off limits.

As for swing trades, duration is no less than 3 months and it would be a cold day in hell when you’d find me buying something without the institutional support of Exodus. Oh indeed, you may have noticed 3 months means earnings will be held through…you’re god damned right. Therefore the names I choose must pass a moderate litmus test of fundamental growth and valuation.

All my data is fine and dandy and pointing to lower by Friday, but ultimately our fate is in the hands of WFC, JPM, BAC, and C. I suppose GOOGL and INTC too.

Egalitarian Conditions Are Normal

261 views

Welcome to the two way market, it’s pretty great if you respect some form of mean revision.

Everyone sleeps on your boy Raul. Perhaps I am not clear enough at times. Maybe it’s these esoteric charts and words putting readers asleep. Maybe the fragmented nature of my existence is confusing for the slow internet types. You would it all be more clear, totally fair.

Aside—thank you Weekly Strategy Session subs. You may not know it, but your contributions fuel insightful research into how the markets tick. I’m grateful for your pittance, for it raised the stakes on my data-keeping skills.

In return you guys, all of you guys (even the public school kids), will know when the data senses a raid on the horizon.

To be honest, you were better served reading the blog than the Strategy Session this week, because I did not fully embrace what the data was saying until after Monday’s giving up the open drive (which “should not” happen).

There’s a lot of day left and no sign of buyers yet. I have no idea what next week will bring, but come Sunday I will so throw a few bucks in the vending machine and grab the latest edition of Weekly Strategy Session.

Pro Gap Down

234 views

Nasdaq futures are lower overnight. Reports of widespread failure by Bloomberg Terminals may be at least partially to blame for the selling which accelerated around 5am. One may think volume would be low if participants were without data, however quite the contrary, volume was elevated to second sigma as was the range.

CPI data came in lower than expected and so far we have not seen any reaction in price. At 10am The primary read of U of Michigan data is out.   The primary read has often been a source of fast intraday Nasdaq moves. Also at 10am we have Leading Indicators and at 1pm energy traders will keep an eye on the Baker Hughes Rig Count.

Yesterday we printed an neutral day, the second neutral day in a row. Price settled right in the middle of the range however, which was unlike Wednesday’s neutral extreme day. Now, given the context of Wednesday’s neutral extreme, it is likely the initiative buyers seen Wednesday will be underwater due to this morning’s developments. Whether they can make a strong and aggressive responsive buy today will be telling. If not, we may see liquidation take hold.

Headed into today, we are priced to open on the low end of Tuesday’s range. The naked VPOC just above at 4386.25 is likely to attract price, as is the overnight gap up to 4414.25. However, today we are dealing with a pro gap, thus it will take significantly more resources to fill.

My primary expectation is for buyers to push into the overnight inventory and trade up to 4386.25 before finding sellers attempt to work down to the overnight low but struggle to take out 4363 and find responsive buying. Two way trade ensues.

Hypo 2, sellers gap and go lower, taking out 4363 early on and trigger a liquidation move down to 4337.

Hypo 3, strong buyers off the open work up to the range gap 4401 before finding responsive sellers who defend the range and churn us back down to 4386.25.

Hypo 4 full gap fill up to 4414.25 then a run for overnight high 4417.50 with a stretch target of the NVPOC at 4435.25.

Levels:

NQ_MP_04172015

Why Are We Up Here?

304 views

Go ahead and take comfort in the gentle markets. This is unbelievable. Conditions look good and stocks are behaving well.

Today the Nasdaq did almost everything a well functioning market would do. Primarily it gave the nearest volume pocket a thorough discourse consisting of assessing the quality of the terrain and deeming it fair footing for buyers to sellers to orderly come together and facilitate trade amongst one another. Anyone who made a transaction today was welcomed to tea sandwiches and soda water on their way out.

Bears and bulls discussed the current events over cigars afterwards and the nearby steakhouse was made busy with folks dressed in business professional attire.

Fine. But that doesn’t create the lower prices I need to ease back in, so here I sit and brood.

Ladies and Gentlemen of The Jury

245 views

Only one short year ago, at this same tax deadline juncture, markets were in ultra extreme turmoil [sic]. Hundreds of thousands of puts were being accumulated each day, VIX was elevated, and more stocks were hitting 52 week lows then highs. It had a different feel. It felt like a sweet opportunity to go long.

This year everyone is cavorting about town with rose colored sunglasses on. They admire the neighbor’s wife while stuffing their faces full of barbecued meats. The collective life of man is in a state of gluttonous bliss, drunk on the spoils of speculation.

Despite my bearish demeanor and willingness to pen it upon the finest internet quarters the world has to offer, I have no intention of proselytizing the bulls. Bulls have done well. The wind is on their buns. Also to clarify, I am mostly long. However, I am not as long as I was on Monday, and I want to be, slowly, from lower.

Working The Gap

189 views

Nasdaq futures are down overnight on an elevated range and normal volume. Price managed to exceed yesterday’s RTH high by 2-ticks before falling back through the entire daily range.

Pre-market we had Initial/Continuing jobless claims data which was mixed and Housing Starts which came in lower than expected. At 10am the Philadelphia Fed data is out and at 10:30am Natural Gas storage.

Yesterday we printed a neutral-extreme up day after the range extension down was quickly rejected and buyers put together an afternoon rally. The profile left behind had a pronounced pocket from 4417.25 – 4411.75. I would expect this area to trade fast on a revisit and afterward we’re likely to spend some time filling it out.

Heading into today we are set to open on the low end of yesterday’s range. My primary expectation is for buyers to work into the overnight inventory and attempt at gap fill. If they can trade up through 4411.75 they likely don’t see much friction on their quest to 4421.50. Then I will look for 2-way trade chop to ensue.

Hypo 2 is sellers defend the volume pocket and start working lower to target 4386.25 then choppy conditions.

Hypo 3 is buyers push the gap fill and continue on to take out the overnight high 4429.50 and target the NVPOC at 4435.

Hypo 4 sellers take out 4380 before finding a responsive bid.

Levels:

NQ_MP_04162015

DOWN

335 views

Hopefully you were able to book a few gains into this afternoon’s strength because come Friday the market intends to ram a fist through your toothy grin. People are way ahead of themselves, like summer is already here.

You may think it is safe to plant annuals, but frost is coming—a frost so thick it will crumble traps and wilt your impatient plantings. Wearing shorts and other revealing clothing will result in frostbitten knees and midriffs.

Today means nothing in the grand scheme of things, an unseasonably warm day. The Nasdaq rallied, the ubiquitous Netflix is blazing higher, Intel pleased investors, Goldman Sachs is being front ran, and energy is making delicious and powerful moves up.

Odds are still elevated for lower prices come Friday’s close. There have been little clues bears are waffling an opportunity here. Their last hope for swift death are the lagging transports. They (I) will point to this chart and pray to Darth Vader if breaks lower.

Watch it closely enough, and you won’t see all the stocks posting double digit gains.

I’m off to devastate dumbbells for being pathetic and light.

 

Deadline

291 views

Tax day is upon us. This day often marks a turning point in the market. Take last year, for example, we were all freaked out by the ultra-violent marketplace. Then, as if a switch was turned, we gracefully ascended from about tax day thru to 4th of July.

This year we have little to fear. Markets are behaving well, the Russell is undergoing a major breakout, and oil has a bid. My hypothesis of a down week calls for Wednesday strength, thus I will stick with my cautious theme.

The Nasdaq trader higher overnight after catching a bid around 3am. No particular economic event stands out at that time. Around 10pm the China GDP data came out in line and on deck for today we have Industrial Production at 9:15am, NAHB Housing Market Index at 10:30am, Crude/Distillate Inventory at 10:30am, and Fed Beige Book at 2pm.

Intel traded higher last night after reporting, BAC is slightly lower after their premarket earnings. On deck this evening are NFLX and SNDK, while C, and GS are set to report tomorrow BMO.

Taking to the chart, we can see the 2-way conditions present. We started the week continuing to explore higher prices. By mid morning the market managed to find sellers and roll. That selling continued into Tuesday before managing to print a decent looking low (excess wicks on candles) before firming up into the close.

Heading into today, my primary expectation is for action early on to fizzle out relatively soon and put us into a holding pattern ahead of the Beige Book. Look for sellers to work into the overnight inventory and test down to 4397. Here I will look for buyers to step in and take out overnight high 4410.75 to target 4414.75 before two way trade ensues.

Hypo 2 buyers take out 4415 early and set up a leg to 4435.25

Hypo 3 we test down to 4381.50 – 4378 before finding buyers and balancing out below 4398.

Levels are highlighted on the following market profile chart:NQ_MP_04152015

Cleaning Up The Nudes

359 views

We haven’t done anything yet in the Nasdaq which is trading essentially flat on the week. The auction has done a good job of cleaning up naked VPOCs. A clue like this tells me the markets are operating well.

My data set suggests everyone came into the week with rose colored sunglasses so my overall consensus is sideways or lower by Friday.

Here are the levels I’m working with on NQ_F*:

NQ_VP_04142015*SOURCE: 04/13/15 -04/17/15 Weekly Strategy Session.

Action Heating Up

268 views

Range elevated just a touch beyond normal overnight while volume came in normal during globex. The market continued pushed lower overnight before finding buyers around Friday’s session low to bring us back flat headed into Tuesday. Advance Retail Sales came in a bit softer than expected at 8:30am and the data encouraged a bit more buying.

This is where the week starts becoming interesting. WFC and JPM earnings are out this morning and neither has made a dramatic premarket move. The financial sector has coiled over time and we may see the compression resolve as the banks earnings continue to roll in. Also important is tonight’s GDP data out of China. All eyes are on the red giant as its stock market soars. Finally, the Nasdaq is likely to be reactive to the INTC earnings scheduled for release after market close.

Yesterday the week started with a small gap up then an open drive higher. Price managed to tag the naked VPOC at 4438.25 and go slightly beyond it before stalling out. Sellers then slowly worked the market lower before accelerating down through the open drive to extend the range lower.

Intermediate term conditions are neutral, but overall context is bull.

Heading into today, my primary expectation is for sellers to make a push to test 4395. Look for responsive buying here. Choppy conditions between 4395 and 4405 give way to another leg lower to target 4382 and a stretch target of 4379 before 2-way trade resumes.

Hypo 2 is buyers push off the open to 4415 where responsive sellers are found and two-way trade ensues with buyers sustaining above 4395.

Hypo 3 is buyers make an aggressive push back above 4415 which leads to a second leg up to 4429.25.

Levels are highlighted below:

NQ_MP_04142015

Take The Ticket

396 views

Please, by all means, pull up a chair. We have to discuss the situation we’re in.

Despite a valiant attempt to mend the charts bulls are stumbling about the china shop. Their hooves are slipping every which way on millions of marbles strewn across the floor by clown suited algorithms. Don’t laugh bears, they intend to exact the same hilarious gag on you.

The markets are no longer permitted to look good for bulls or bears. Much like the internet, they are designed to squeeze profit margins down to extinction. They are destined to test every drop of fortitude you’ve got.

It is your job, your only job, to become exceedingly selective with your trades. I have reduced the number of day trade types I will pursue down to 2 from about 9. Only the milk mates—the crème is off limits.

As for swing trades, duration is no less than 3 months and it would be a cold day in hell when you’d find me buying something without the institutional support of Exodus. Oh indeed, you may have noticed 3 months means earnings will be held through…you’re god damned right. Therefore the names I choose must pass a moderate litmus test of fundamental growth and valuation.

All my data is fine and dandy and pointing to lower by Friday, but ultimately our fate is in the hands of WFC, JPM, BAC, and C. I suppose GOOGL and INTC too.