iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,094 Blog Posts

Steady lads these cups are really wiggling

Been consuming financial, tech and geopolitical news like a glutton all week. Waking up at 5am (no alarm) full of power. Will read for a bit then it is on to Twitter — which despite every effort (or lack thereof) — is still the greatest information platform on the planet.

The interesting thing about this slow burn we’ve endured since November is how many people are actively communicating that this is nothing like the a real crash even though most of the best investments of the last five years are down somewhere between -45% and -90%.

I dunno man, I’ve been through a few of these cycles and it sure feels like the last times.

Pain.

But as a masochist and a hedonist there’s a warm familiarity to it all. My own arrogance early on. My acceptance midway. There internal battles to stay kind. The embarrassing outbursts and then finally the unadulterated indifference of a cold dead observer.

Winter is coming and soon I will have lots of time at my disposal to sit around and retool my trading systems. At least that is the exception.

I do have to tear down an entire blight house, but I’ve given it a few solid walk around and I think if I hook the f-250 shit kicker to one of the outer walls I can pull the whole bitch down in one fell swoop.

Then a few days of sawing and moving rubble and voila! Our dear Detroit is one step closer to four from three.

You see lads, while I am arrogant, perhaps my greatest super power is total acceptance that I know nothing. Folks think it hurts my pride when they point out that I come out here, every hecking week (and historically morning) and write 200-1000 words about how we might go higher or we might go lower. We don’t know. But theirs is a delusion if they think otherwise.

The past is certain, but present and future are the domain of fortuna.

And of course we’re gonna spin fortuna’s wheel. We have no choice if our intentions are to make our way through life as kindness and profit oriented thingies.

How do we make these decisions, if we truly don’t know?

We need unbiased information for one. These bits of data are our best glimpse at immutability. Then we use these observations to perform tests. Then we adjust along the way.

Then we need risk management.

Then we need records of our battles to review and improve upon.

Okay I gotta go.

Raul Santos, October 2nd, 2022

And now the 403rd edition of Strategy Session.


Stocklabs Strategy Session: 10/03/22 – 10/07/22

I. Executive Summary

Raul’s bias score 2.43, medium bear. Buyers step in early on this week and rally price higher.

II. RECAP OF THE ACTION

Choppy and lower through early Wednesday. Strong rally Wednesday. No follow through. Sellers pressured the tape lower into quarter end.

The last week performance of each major index is shown below:

Rotational Report:

Utilities smashed during this latest round of selling. Perhaps this is like the inverse of the tail end of a rally? Where Utilities outperforming to the upside signals caution bulls. Key Tech sector also leading through

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows skewed to the sell side after two prior heavily sell side skews.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Everything looks bad

The technicals look pretty awful across the board. Yet IndexModel is not signaling the Bunker Buster again. Recall there was a signal two reports back. Meanwhile Stocklabs is halfway through a 12-month oversold cycle.

So far buyers have been unable to regain control of the tape, despite a few attempts last week. But as we peel back the layers via top-down analysis (index, sector, industry) we notice that the selling last week was pretty mild.

I think in many ways it ‘felt’ worse than it actually was.

Maybe the other shoe drops next week and we really start to nose dive. We don’t know.

But sentiment (and the charts) are quite negative.

So negative we rally?

Again, we don’t know.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers. (First time in a few reports where the end-of-week auction was headed lower.)

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Buyers step in early on this week and rally price higher.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Ether looks decent

Readers are encouraged to apply these techniques to all markets. Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Looks like Transports could lose range. Some would say they already have. I’d argue they’re still holding on to balance. Barely.

See below:

Semiconductors on the other hand have resumed discovery down. I highlighted the next level I am interested in.

Ether still looks balanced. Much more balanced then the other two indices.

V. INDEX MODEL

Bias model is neutral heading into the first week of the fourth quarter. The third consecutive neutral reading. No bias.

There were five Bunker Busters in recent history — four weeks ago, thirteen weeks back, twenty weeks ago, thirty-three reports back and a thirty five reports back.

Here is the current spread:

VI. 12 month hybrid oversold

On Friday, September 23rd Stocklabs went hybrid oversold on the 12 month algo. This is a bullish cycle that runs through October 7th, end of day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“It is worth remembering that it is often the small steps, not the giant leaps, that bring about the most lasting change.” – Queen Elizabeth II

Trade simple, tweak your approach as needed

Comments »

Dip buyoor

Woke up early this Sunday, day of the witch. My powers grow stronger every day as we cruise through harvest season, pulling lumps out of the dirt and hustling them into fiat american dollars and then hustling those dollars into stuff that’s actually valuable. Things like machines and tools and equities. Bought some dang bitcoin this morning.

I know I’m fighting the Fed and I expect to be ‘wrong’ for a long time. But maybe that is the difference between me and your average american football and nacho consumer. My work has only begun. At 5am I rise without an alarm, cockstrong, the dang thing practically heaving me off the bed.

Then I go to work because why not? I’m awake.

I’ve been a vegetarian for nearly seven years now and it’s really starting to pay dividends. I have the vigor of ten men and the kindness of Manjushri.

Yep things sure are going well for your dear and gentle pal Raul. And as such I am buying this dip.

I couldn’t care less about the constant threats of the fear dealers on teevee and the interwebs. The progressive agenda has advanced so far into enemy territory that I am shielded from those country road flag flyers. I am amongst the bandits and they are to be respected, but by no means feared. If they ever make a move on me it will be a miserable day for their families. For them it will simply be the end and that’s not so bad.

My powers grow.

With every 10 degree drop in temperature my inner fire grows hotter. I cannot imagine doing stimulants like adderall or crack rock when I already pace around this derelict outpost for 15 hours a day. Sitting here to pen this blog entry is a great challenge as all I want to do is make to kill. I blow out a few keyboardts a year beating these poor keys in the name of grooming.

So if you’re too old to holdt for ten years whilst using your mind and muscles to go out and secure moar monies, than sure, be afraid. Your entire focus is wealth preservation. But I am on a warpath of CREATION.

Raul Santos, September 25th 2022

And now the 402nd Strategy Session


Stocklabs Strategy Session: 09/26/22 – 09/30/22

I. Executive Summary

Raul’s bias score 2.45, medium bear. Expecting sellers to attempt some follow through downward action early in the week. Then a rally into month-end.

II.  RECAP OF THE ACTION

Rally Monday. Sustained gains through Wednesday until the FOMC meeting. Price action resolved lower after a down-up-down reaction. Sellers dominated the tape late into Friday trading before a bit of a ramp into the weekend.

The last week performance of each major index is shown below:

Rotational Report:

Recall we had two weeks of full risk off rotations, then a strong risk on rotation. Then another major risk-off rotation on the prior report.

And then again on this report a strong risk-off rotation.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows skewed heavily to the sell side for a second consecutive week.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Fed up

For the first time I am seeing genuine anger from investors. They are angry with the Fed for their hawkish reaction to inflation while simultaneously angry about home and food prices.

I don’t think most investors, especially those who focus primarily on equities and/or bonds, fully grasp the situation facing the U.S. dollar. Our fiat currency, along with the nation it represents were called into question during the lockdown. What rose to prominence during this time were various crypto currencies. These internet coins have become legitimate tender.

Ether has become a massive commodity that users accumulate and use.

These so called inflation hedges did not behave as intended. They did not hedge anything. In reality they served to *exacerbate* inflation.  And now the Fed has no choice but to flex until the almighty U.S. dollar regains total, undisputed dominance.

It’s working.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Expecting sellers to attempt some follow through downward action early in the week. Then a rally into month-end.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Transports resolve weak low

Readers are encouraged to apply these techniques to all markets. Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

We can finally remove the note about the weak low on Transports. That being resolved, perhaps this index can go to work forming a more sturdy low.

This could be range low right around here—we don’t know.

See below:

Semiconductors appear to be outside of range. Could be in discovery down. Or the range could assert force and suck price higher. We don’t know.

Ether looks more balanced than the other two contextual indices.

V.INDEX MODEL

Bias model is neutral heading into the final week of September. The second consecutive neutral reading. No bias.

There were five Bunker Busters in recent history — three weeks ago, twelve weeks back, nineteen weeks ago, thirty-two reports back and a third fourty reports back.

Here is the current spread:

VI. 12 month hybrid oversold

On Friday, September 23rd Stocklabs went hybrid oversold on the 12 month algo. This is a bullish cycle that runs through October 7th, end of day.

VII. QUOTE OF THE WEEK:

“it has always been easy to hate and destroy. To build an to cherish is much more difficult.” – Queen Elizabeth II

Trade simple, stay cool daddy-o

Comments »

Steady hustling

Not too much for bulls to hang their hat upon heading into the second-to-last week of September. I’ve learned over the years to know when I am emotionally unfit for trading. Overconfidence has plagued me over the years. It has never been fear that weakens me but the feeling of invincibility. So I haven’t traded this year.

I made so much hecking money in that bull run, I started doing crazy things. It was time to back off.

I’ve kept busy in other ways. Working the land. Disco dancing. Helping me elders transition into more suitable housing.

I can see the light at the end of this transitionary tunnel and very much look forward to becoming more active again in the financial markets.

In the meantime, life just really seems to be working out splendidly for your dear and humble pen pal Raul. Like, hows a corn meme gonna go viral a few weeks before I pull down my biggest sweet corn crop ever? I was slanging ears of corn on the streets with ease.

This morning, I woke up cockstrong and went to help pour a cement driveway, no problem, then back to these decks to put out the weekly research.

Next I have to go assemble a bedroom vanity for a nice sounding old lady. With any luck, she’ll tip me with some pie.

We dunno.

We just takes it as it comes.

Winter is coming. There is ultraviolence all around me. Not only in the city but the suburbs. That no dang good lock down really set children and adults alike back socially, empathetically.

They go onto the internet and find these little hate chambers full of groomer dootch bags that encourage bulling and for what? Because they’re little bitches afraid of being bullied themselves.

Again, totally fine. Not everyone can be high born with immigrant/american hybrid genetics and a mind that understands the way of things. Alls your very humble and kind and handsome pal Raul can do is demonstrate greatness, day-after-day-after-mother-hecking-day, wearning tie dyed shirts and helping the olds and swooning the babes and hustling punkins and corns.

That’s it.

The gambling halls down in chicago are putting 82% odds on a 75 basis point rate hike this Wednesday. The Federal Reserve is completely out of control. Ever since they kicked Yellen out of the chair it has been a chaotic organization that has failed the people. How much longer will this perverse and draconian obsession with inflation continue?

We dunno.

But we do know that the third reaction to that dang meeting Wednesday is all that matters to the focused speculator.

Maybe the crash is near. Maybe a gut twisting rally lurks in the shadows. These are spooky times.

I’m glad I’m just poking the dirt and making punkins pop out of it.

Okay for now.

Raul Santos, September 18th 2022

And now the 401st Strategy Session.


Stocklabs Strategy Session: 09/19/22 – 09/23/22

I.Executive Summary

Raul’s bias score 2.40, medium bear. Choppy and indecisive price action through Wednesday morning. Then look for third reaction to the FOMC rate decision to dictate direction into the second half of the week.

II. RECAP OF THE ACTION

Markets were higher to start the week after buyers spent the Sunday evening Globex session working futures higher. The rally continued through Monday and into early Tuesday before hotter-than-expected CPI data sent prices careening lower. The selling continued through Tuesday. Then price chopped through Wednesday before continuing lower Thursday. Friday was choppy also before ramping a bit higher into the weekend.

The last week performance of each major index is shown below:

Rotational Report:

Recall we had two weeks of full risk off rotations, then a strong risk on rotation. Last week another full-on risk off rotation away from equities.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows skewed heavily to the sell side.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

All eyes on the Fed

Model is neutral heading into next week. Stocklabs is in a six month hybrid overbought cycle. While that stats on this signal are bullish over the 10-day cycle historically, it has been behaving well lately as a short signal.

CPI coming out hot last week really put the fear in investors and the selling was instantaneous. Then, later in the week FedEx put out a warning about the economy and together these major headwinds have not been kind to bulls.

One has to wonder if all this bad news is priced in a this point. The CME is placing 82% odds for a 75 basis point hike from the Fed this upcoming Wednesday. It will be interesting to see whether they raise this aggressively as most investors expect.

However, the actual hike is of less importance to us than the reaction.

That said, I expect markets to pause and chop until we hear from the Fed.

I am also interested in Costco earnings due out Tuesday after the bell. They could provide an interesting bit of context heading into the Fed meeting.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Choppy and indecicive price action through Wednesday morning. Then look for third reaction to the FOMC rate decision to dictate direction into the second half of the week.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Balance breaking on Transports

Readers are encouraged to apply these techniques to all markets. Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Leaving this note up until something changes: That weak low on Transports irks me. We’ve rallied far from it, that we’re likely to encounter support ahead of any retest of the lows, but it poses a risk to a sustainable low.

Transports lost the lower bracket of the balance we’ve been monitoring. The FedEx warning pressed into this index. That weak low is definitely in play.

See below:

Semiconductors seem to have trapped some buyers a bit higher, and while still in range, bulls are on their heels.

Ether looks a bit more balanced than our other two contextual indices.

V. INDEX MODEL

Bias model is neutral heading into the second-to-last week of September. No bias.

There were five Bunker Busters in recent history — two weeks ago, eleven weeks back, eightteen weeks ago, thirty-one reports back and a third thirty-nine reports back.

Here is the current spread:

VI.QUOTE OF THE WEEK:

“Let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzez needed efforts to convert retreat into advance.” – Franklin Delano Roosevelt

Trade simple, stay cool

 

Comments »

Tricky week ahead

Bunker has been busted. But now the model is bearish.

My brains a bit mushy lads. I worked the streets hard, 6am – 11pm, selling corns and peppers and whathaveyou, then went to a disco rave until about 4am.

Fueled only on cheap swill and Italian rage.

And while you may wonder if this depleted state affects the ability to perform an analysis, rest easy knowing that this is the 400th report. I’ve been doing this for 400 weeks good loard.

Pretty much just a robot at this point. I am actually typing this out whilst being on a phone call. Clicking the keys extra loudly to let them know I am sick. If I was halfway decent at coding this whole thing could probably be automated.

But for now I am the cog in the machine and I went in and spun the drive and voila! Data.

Okay that’s it. I added some META and AMZN and /eth last week. To the long term accounts. If those entries go under water — so be it.

Raul Santos, September 11th 2022

And now the 400 strategy session. Enjoy.


Stocklabs Strategy Session: 09/12/22 – 09/16/22

I. Executive Summary

Raul’s bias score 3.45, medium bull*. Buyers continue to press the tape higher early on. Then look for sellers to step back in, perhaps after the Tuesday morning CPI data, and work price lower on the week.

*Rose Colored Sunglasses bearish bias triggered, see Section V

II. RECAP OF THE ACTION

U.S. markets were closed Monday in observation of Labor Day. The holiday shortened week kicked off with some sharp selling which continued overnight into Wednesday. Then we had a sharp rally across the board Wednesday. Choppy Thursday. And then a continuation rally Friday and into the weekend.

The last week performance of each major index is shown below:

Rotational Report:

After two consecutive weeks of total risk off rotations, last week essentially saw the opposite – buying rotations across the entire equity complex. Energy lagged but has been fairly independent of the overall market. Discretionary leading but Tech lagging a bit.

neutral

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Interestingly, money flows slightly skewed to the sell side of the ledger.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Bunker Buster into an RCS

Bunker Buster seemed to fit the behavior of last week’s tape well. We printed that sharp low Tuesday and then started to rally.

But will it mark the low of this valley? As always we don’t know.

The model flipped bearish this week, meaning if I were actively trading, I would only be looking for ways to short the market all week.

It doesn’t change what I did last week which is add to some long-term positions.

But my bias is for lower prices this week. Being that it is opex, I could see it playing out as a slight move higher, than a slightly bigger move lower, with little being accomplished except to burn up option premium.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Buyers continue to press the tape higher early on. Then look for sellers to step back in, perhaps after the Tuesday morning CPI data, and work price lower on the week.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Seeing lots of balance and a clear sign post

Readers are encouraged to apply these techniques to all markets. Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Leaving this note up until something changes: That weak low on Transports irks me. We’ve rallied far from it, that we’re likely to encounter support ahead of any retest of the lows, but it poses a risk to a sustainable low.

Transports show balance despite that weak low.

See below:

Semiconductors appear balanced also. That big gap we printed Friday morning could prove a useful bias pivot in the upcoming week. If buyers cannot defend that zone, we could fall right down out of balance.

Ether showing a big balance.

V. INDEX MODEL

Bias model is signaling Rose Colored Sunglasses. This signal calls for downward price action on the week.

There were five Bunker Busters in recent history — last week, ten weeks back, seventeen weeks ago, thirty reports back and a third thirty-eight reports back.

This week’s report is the fifth (fourth in 2022).

Here is the current spread:

BIAS-SPREAD

Vi. QUOTE OF THE WEEK:

“Let’s not take ourselves too seriously. None of us has a monopoly on wisdom.” – Queen Elizabeth II

Comments »

Time to be brave

Here we are a gain lads, back in a Bunker Buster.

Not much to say here — Neel cash and carry was delighted to see us selling off in the aftermath of Jackson Hole.

The Fed wants lower.

Who are we to fight them?

Optimists and dreamers.

The realists are probably doing normal things like enjoying their boats a few more times before winter. Sending their kiddos off to school. I don’t know — having garage sales or something.

But we’re out here punching data into spreadsheets and complying with what the models tell us.

The models tell us this week is time to add to long-term positions by buying more risk assets.

But not just yet. First they want to see a real plunge into the abyss.

Therefore I shall sit here a bit, with my tools sharpened, guns oiled and office cleaned — awaiting some panic.

Then I will step in and buy the good goods. Stuff like ether, GOOGL, BRK.B. Who knows I might eff around and buy some META. You see Mark last week? Punching and kicking that poor lad? Somethings brewing at Meta.

Shit might could even pick up a little Tesla.

Might need to auction off an organ first.

Alright lads that’s the call. To be patient. To let the enemy press deep into our lines, then we attack.

We are lions.

Raul Santos, September 5th 2022

Happy Labor Day.

Here’s the 399th Strategy Session:


Stocklabs Strategy Session: 09/05/22 – 09/09/22

I. Executive Summary

Raul’s bias score 2.10, medium bear*. Volatility increases early Tuesday with prices accelerating to the downside. Eventually look for a sharp and excessive low to form, perhaps after the Beige Book Wedneday afternoon or after Fed Chairman Powell speaks Thursday morning. This could mark a tradable low into the coming weeks.

*Indexmodel is signaling the Bunker Buster, see Section V

II. RECAP OF THE ACTION

Choppy Monday with price grinding into the prior Friday’s heavy selling. More heavy selling early Tuesday (pre-market). Grind lower Wednesday. Bit of a rally Thursday afternoon and into about Friday lunch time. Then heavy selling Friday afternoon saw the Dow make a new low on the week while the other indices stayed above.

The last week performance of each major index is shown below:

Rotational Report:

A second week of full on risk off rotation away from equities. This time not even the Energy sector was sprared. Tech leading lower.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows skewed heavily to the sell side for a second week, this time with major sell flows hitting the tape, much strong than the prior weeks.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Another Bunker Buster

The biggest change this report has seen in 2022 is the frequency of Bunker Busters. For many years, this signal only fired a few times a year. 2022 has just printed its fourth.

The most recent one was mid-June and did well to mark the lows. One could argue that today’s signal might also stick. If you zoom out to the daily charts, most major indices are still well above the June lows, and this could be considered a reasonable pull-back after that June-to-mid-July rally.

The contextual challenge is we have a hawkish Fed that is primarily focused on combating inflation. The talk out of Jackson Hole two weeks back was greeted with heavy selling and Fed banker Neel Kashkari went on one of the most popular podcasts in finance (Bloomberg’s Odd Lots) and said he was happy markets sold off.

Don’t fight the Fed has been a cautionary axiom for as long as I’ve been trading (about 17 years) and it has been one to heed.

All this to say yes, we have the ingredients for a rally quantitatively and technically, but we have a powerful actor arguably working to make it not happen.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Volatility increases early Tuesday with prices accelerating to the downside. Eventually look for a sharp and excessive low to form, perhaps after the Beige Book Wedneday afternoon or after Fed Chairman Powell speaks Thursday morning. This could mark a tradable low into the coming weeks.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Semiconductors blew out the bottom of our suspected range

Readers are encouraged to apply these techniques to all markets. Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Leaving this note up until something changes: That weak low on Transports irks me. We’ve rallied far from it, that we’re likely to encounter support ahead of any retest of the lows, but it poses a risk to a sustainable low.

Transports do seem to be holding their new range for now.

See below:

Semiconductors pressed down through recent range. There could be a new, lower range setting up or perhaps another leg lower in discovery down.

Ether could be coming into balance between these two huge volume pockets.

V. INDEX MODEL

Bias model is signaling Bunker Buster. This signal calls for an acceleration to the downside. Eventually we could see a sharp, tradable low form. Overall expectation is for volatility to increase.

There were four Bunker Busters in recent history — nine weeks back, sixteen weeks ago, twenty-nine reports back and a third thirty-seven reports back.

This week’s report is the fifth (fourth in 2022).

Here is the current spread:

VI. QUOTE OF THE WEEK:

“He is most powerful who has power over himself.” – Seneca

Trade simple, reign in any impulses

Comments »

Steady lads

No bunker buster yet.

The Jackson Hole selling that hit Friday took us to a new low-of-month but did not destroy the charts. Yet.

Contextual charts still in range.

Debt. Relieved. ‘Bare Minimum’ Joe signed off on $10-$20k in relief for learned adults in America — many whom are carrying bags much heavier than low five figures. No one seems thrilled, but it is thrilling. A new era of irresponsibility and a nice cherry for any cheeky chaps bright enough to game the system.

Europe is freaking out about heating costs and the energy markets are going bananas. Once again Can-America stands to benefit the most. We have abundant gasssssss and anthracite, which we murdered our way into controlling long ago.

King of the North Justin Trudeau is keeping those lug-nuts-for-brains obedient and driving our loads. At least long enough for Elon to build electric semi convoys to be operated exclusively by engineering graduates from modest universities.

Silicon Valley elites are cosplaying end-of-days out in the desert, flooding their nervous systems with chemicals in the name of enlightenment and world domination.

And your dear and humble pal Raul is poking around in the post-apocalyptic dirt of Detroit, making delicious corns and punkins emerge — generally improving the morale of alls who see.

Spooky season is nearly upon us. You’d think I’d be over dressing up as a hobo clown and terrorizing the townsfolk for a few weeks. That I’d be on to better things. Starting a family or, I don’t know, golfing. But alas, there is a defect in this one. Boy ain’t right.

Hold steady lads. Doomsday predictors are still fools. For now.

Raul Santos, August 28th 2022

And now the 398th edition of Strategy Session.


Stocklabs Strategy Session: 08/29/22 – 09/02/22

I. Executive Summary

Raul’s bias score 2.23, medium bear. Markets drift lower early in the week before turning higher to start September. Then look for Friday’s non-farm payroll data to show direction into the weekend.

II. RECAP OF THE ACTION

Started the week gap down after Sunday evening sellers took control of the tape. Choppy through early Wednesday before we began campaigning higher. Upward action into Friday morning, when information coming out of Fed Chairman Powell at Jackson Hole introduced heavy selling. Ended the week at new monthly lows everywhere except the Russell 2000, which continues to demonstrate some relative strength.

The last week performance of each major index is shown below:

Rotational Report:

Full on risk off rotation away from equities. Energy still trading independent of the overall market.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows skewed heavily to the sell side. Interestingly, most of the negative returns are in the about -3% range. Broad selling but not super intense. Not yet at least.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

When our edge evaporates, we step back

The nice thing about only engaging the market when this Sunday report defines a clear edge is it means more time to develop as a trader both financially and emotionally. Right now we have no edge. Therefore we simply do not trade. We wait until there is an edge again.

This does not mean we’re not actively observing. Down time is best used sharpening our tools, cleaning our offices and preparing for the next engagement.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Markets drift lower early in the week before turning higher to start September. Then look for Friday’s non-farm payroll data to show direction into the weekend.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

The edges of balance are becoming more clear

Readers are encouraged to apply these techniques to all markets. Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Leaving this note up until something changes: That weak low on Transports still irks me, but we’ve rallied so far from it, that we’re likely to encounter support ahead of any retest of the lows.

Only update this week is we seem to have found the upper boundary of balance. Here is how the setup appears.

See below:

Semiconductors also clarified their balance zone a bit.

Ether less clear. We can see clearly that 2,000 was a wall. 2,000 lines up with the ‘underlay’ wedge from the last clear picture we had (overplay for the underlay). Now it seems perhaps that the major volume pocket below could be a magnet, and also a support zone for balance.

V. INDEX MODEL

Bias model is neutral for a second consecutive week after several weeks of signaling.

No bias heading into next week.

There were four Bunker Busters in recent history — nine weeks back, sixteen weeks ago, twenty-nine reports back and a third thirty-seven reports back.

Here is the current spread:

VI. Six Month Hybrid Overbought

On Friday, August 12th Stocklabs signaled hybrid overbought on the six month algo. This signal has bullish statistics. The cycle runs through Friday, August 26th end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“We suffer more often in imagination than in reality.” – Seneca

Trade simple, expect nothing

Comments »

The Ultimate Guide to Personal Finance and Freedom

With the north gently easing into shorter days and bright-eyed youths worldwide preparing to descend upon institutions of higher learning, I feel it is both my moral and ethical responsibility to impart any and all wisdom I’ve gained during my years as a student of money and society. In this blog, I will address not only matters of finance but also nutrition, social networking and success.

I want to hold this entry to a higher standard than usual by limiting my swearing, so first and foremost let me state the most important thing you need to know while curbing my impulse for rage, and we’ll be good lads and choose better words going forward:

FUCK THE BANKS AND THEIR FUCKING BANKERS.

Banks offer nothing in the way of good help for the small chaps or medium lasses or even mixed-weight couples. They only exist to serve their institutional clients, client whose balance sheets became huge long before any bank was willing to help. These large institutions enjoy access to capital at wonderful rates. I used to work in corporate finance, treasury to be specific, and I’ve seen firsthand how to make good deals with bankers. It takes size lads, size we don’t have.

When I use the words credit and loan I mean numbers on a screen that can be used to take possession of goods, or screen numbers we can use to motivate someone to do a service, or numbers we can click around the internet to place a bet on the future (our favorite use). Banks will never extend credit or loans to you when they’re most desperately needed. Nope. But once you’ve had some success on your own, suddenly they flood you with offers, right? Once the brokerage account hits six figures, suddenly they want you to use their margin. That’s because they want to take the moneys you fought like a banshee to extract from the system via interest, fees, forced liquidation and other draconian punishments.

These are not helpful institutions — banks and brokerages — and they are becoming way less relevant in our budding era of digital currency and One Progressive Global Internet economy. The internet always wins and right now it is winning big leauge. So forget about the banks or any other pillars of traditional finance helping you in any way.

Okay, now that we have established that tradfi is not here to help, let’s deep dive into the most efficient ways to gain access to their numbers on the screen without going broke or becoming their slaves.

The first tool that becomes available as we reach adulthood is student loans. These are your ticket to financial freedom. Use them wisely.

Every one of yous needs to attend college. Which college you attend and how you go about it are vital to your independence. If I could do it all over again, I would have studied more of a ‘trade’ like engineering or coding instead of business finance. Finance is something you can learn on your own if you just pay attention to your money and the way society tries to take it. I’ve learned more about finance from trading and independently operating a business than I ever did from a professor.

Anyhow, going to college is critical for two reasons. The first is the longer a human brain is kept in a learning environment, the higher the likelihood that it will form strong reading comprehension and an ability to effectively communicate. These two skills are vital to your independence. The second reason to do college is it gains you access to cheap loans. Loans that are very likely to be erased from your ledger, one-way-or-another, eventually. This is a good place to transition to the next key to success:

DO NOT ACCELERATE REPAYMENT OF STUDENT LOANS. EVER.

Student loans carry some of the cheapest interest you’ll ever have access to in your entire lives. The next best will likely be via a mortgage (if you’re even able to afford real estate) and then probably auto loans.

We need to discuss the ‘how’ of ‘going to college’. If you can tolerate your elders (parents, grandparents, uncle, anyone old willing to shelter you) then find the best college nearby and commute to it. Yes, you will miss out on a tiny sliver of collegiate life — you know, shacking up with total strangers in tiny rooms and sharing toilets and sinks with them. Bummer.

The rest of the collegiate experience is social, right? This can be supplemented quite easily if you live near any major city center. Take Detroit for instance. We have a thriving scene of meetups (like the one I help organize), house parties, unsanctioned raves filled with debauchery, coffee shops with good wifi, cheap noodle shops and more. Doing these things in the nearest city to where elders will house you has multiple benefits, but the biggest benefit is the relationships you form here could last a lifetime.  Since you’ll probably live there forever, this network can collectively play the game of extracting dollars and building business in a place you deeply understand. This is an edge that will baffle your peers when they ‘move back home’ after college.

These urban centers also offer the chance, if needed, to find a few roommates and spread your wings via independent living. Sure.

Either way you’re going to need to learn to cook. Nutrition is the key to health and with only a few inputs and tools you can build a strong body and mind. A microwave, the biggest wok you can handle (ideally a gas stove but electric works), an electric water boiler, a knife and cutting board, a rice cooker and some Pyrex containers will have you well on your way to healthy living.

You don’t really need a fridge/freezer if you have a good grocery store nearby. You do the european model of buying only the groceries for the next 24-48 hours. That said, freezing some veggie burgers and refrigerating leftover for tomorrow’s lunch is nice.

In terms of food, you need to keep your cost per meal down. Breakfast should be a staple and an honored daily routine. Quality bread (I like Dave’s prison bread), eggs, and peanut butter can keep you fueled until at least mid afternoon. Add some flavor with Morningstar patties, ketchup (hot sauce) and jellies (bonus points if you make your own preserves!).

Pretty much any vegetable can be cut into small pieces and made delicious in a wok. Put the wok on high heat, drop two glugs of olive oil in the pan, sprinkle some red pepper flakes in the oil and wait for them to sizzle. When the red pepper is sizzling but before the oil is smoking is your window for adding the veggies. Mix and match and stir it a bunch until some carbon builds up (carbon equals flavor, some health nuts will say this is cancerous, but it makes me feel great). Vegetables are cheap and colorful and packed with nutrition. Mix and match spices and serve it over rice. I eat tons of broccoli because it has the vitamins and minerals I’m not getting from animal flesh.

Keep at least three Soylant bottles on hand at all times. Some days there won’t be time for one of your meals, and at about $3.25 per bottle Soylant is a great meal replacement.

Okay so we have our entire diet covered cheaply.  Feel free to add in caffeine and beer and if you’re feeling a bit overwhelmed by life add in some reefer. But be careful with the reefer. The brain is still developing well into your 20s, and the more THC you flood your receptors with, the more it is likely you’ll start using pronouns in your bio and trying to unionize burrito shops.

Exercise will do wonders for your mind. It does not have to be in the morning or always the same thing. I like lifting weights after my morning intellectual work if I don’t plan on toiling outside in the afternoon. I also enjoy throwing the frisbee, riding the kayak, hot yoga, skateboarding or biking or walking and so on.

Most universities will have community colleges that they will accept credits from. These are good classes filled with more people living real adult lives and are much cheaper.

EARN AS MANY CREDITS AS POSSIBLE FROM COMMUNITY COLLEGE.

It is not super important that you obtain a degree from all your time spent in college. It may bring you peace if you do take home that piece of paper, knowing you can fall back on some entry-level job as a corporate or municipal servant if it turns out you cannot hack it as an independent operator.

Okay we’ve covered how to do college to my satisfaction, now let’s get into why we do all this austere shit. We want to take, lads. We want to take as many student loans as they offer. We want all the student loans. But, we do not want to spend that money on our education. No. We want to do much, much bigger things with those dollars.

As many of those dollars as you can possibly set aside need to be parked in the betting markets. Not casinos or lotto tickets or sport gambling. Those are addictive traps of the lower-middle class. You need to participate in the big show, equity markets, the greatest gamble of all. How risky you decide to be here is a matter of personal tolerance. I’d recommend at least 50% of that money be put into a very boring mix of $QQQ $TLT. Another 20% should be concentrated into one-or-two Big Tech tickers you believe will be around and thriving long after you’re dead. For me, all those years ago when I was still a youth full of piss and vigor, that was $TSLA. Today it is still $TSLA lol.

The rest needs, ***NEEDS*** to be in cryptocurrency. In some way or another. My brothers and sisters, this is so vital. Do your homework. Go down the rabbit hole. I cannot say which projects will win. Okay fine, ethereum. It is pretty incredible. But it is an entire ecosystem. Within it are many roads and yous’d better do your homework. Heck, I’m debating going back to school to become a Solidity expert because the more I study the ether the more it seems I don’t know.

Now just because you’re in college doesn’t mean you shouldn’t be working. Work will accelerate your learning, no matter what type of work it is. You CAN work and study. Use that youthful energy people. Burn the candle at both ends. Take whatever chemicals you need to to squeeze life’s apple until it bleeds wealth. There are so many apps out there now that have breathed life into the gig economy. So if you don’t feel like being obligated to work for some organization, then download Amazon Flex, or Wayfair Service Pro, or deliver groceries or gather and recharge Bird scooters. The moneys out there. Go get it.

Those earned wages should never be used to ‘get ahead’ on paying student loans. First of all they don’t make you pay student loans while you’re still taking x amount of credit hours. I’m not sure the exact credit hours needed to defer loans but use that rule to avoid paying for as long as possible. Then when it is time to pay, pay the absolute minimum to avoid fees. Don’t worry about the interest, that’s good cheap interest. If some global event occurs and they allow you to freeze payments, by golly freeze the bastids. You do not want to pay these loans off. Ever. You want them to be on your personal ledger for as long as it takes. Eventually they will be forgiven. Even if you went to law school and you’re staring down the barrel of six figures worth of debt. Worry not. These numbers will eventually go away. So it is written, so it shall be.

The cats out of the bag lads. The progressives have found the ultimate political hack — they can make the bad numbers go away. And they will, every two-to-four years, in perpetuity, as long as they have your loyalty in the voting box.

SWALLOW YOUR PRIDE AND VOTE FOR THE PROGRESSIVES.

Is it sustainable? Honestly, we dunno. Historically most empires peacefully exist for about 175 years. But we are in a new era of instant communication and One World thinking. Right now, as we speak, thousands of Big Tech millionaires are pooping in buckets and exchanging trinkets in the middle of the desert at their Burning Man. These are your world leaders. The days of lines on maps drawn by the privileged humans reigning supreme are numbered. Prepare for revolution however you see fit. Definitely don’t have anxiety about it. If you’re feeling anxiety maybe head to your nearest national forest and take a mushroom and have a long talk with the gods about how silly it all is.

Three of the biggest threats to your personal finance are insurance chiselers, telecommunication fees and automobiles. These are three areas where you would be wise to milk your elders for as long as possible. Stay on their insurance, their family cellphone plan and take a hand-me-down junker if possible. If not, then keep your taxable income low and maximize how much Obamacare you can receive. Fight the damn phone companies every three-to-six months for lower rates and move to a city where you can walk or bike around.

BE PATIENT AND KIND.

Well that’s about it. Do these things and watch your independence grow. There will be a few moments in your life lasting anywhere from a few weeks to a year-or-so where all the stars will align and the numbers on the screen attached to your name will explode in value, changing EVERYTHING. Just be patient. The good times will come. But if you’re some chooch, twisted up by pride into thinking you need to be some debt-free idiot with a modest salary and all the trimming society perceives as success, you’ll miss these moments and be cucked into servitude for your entire life.

Keep learning, keep gaming student loans, work, and be a little bit more kind. Then enjoy your freedom.

I am sure I missed a few keys to keeping folks away from yer lucky charms. Feel free to comment below with any techniques or risks I may have overlooked. And be sure to share this entry with all your youths and perhaps your neighbor’s youths.

Comments »

No idea

Well we had a solid run off the lows lads. Called it decently too.

That bunker buster nine weeks ago, two months ago really, two hardt months of living. We pressed risk with vigor and sigma bravery.

Now I cannot approach the upcoming week with such conviction. Things have gone murky again.

The only real guidepost we have this week is NVIDIA earnings Wednesday after-the-bell. They’re chips are vital to our success as a progressive one world economy where everyone lives in pods and eats bugs. So I definitely expect the entire risk complex to take their cues from their earnings.

I compiled my research this morning but couldn’t pen the report and complimentary blog until after I did some touring about town. Thus my spirit for inspiring yous to do your best this week is waning a bit. Just know that I am rooting for you anon.

Let’s tread easy this week and wait for a clearer picture to take shape.

Raul Santos, August 21st, 2021

And now the 398th edition of Strategy Session.


Stocklabs Strategy Session: 08/22/22 – 08/26/22

I. Executive Summary

Raul’s bias score 2.73, medium bear. Choppy through Wednesday. Then look for earnings out of NVIDIA to dictate direction into the weekend.

II. RECAP OF THE ACTION

Continued strength early in the week, then a fade lower into the weekend.

The last week performance of each major index is shown below:

Rotational Report:

Last week saw investor rotating into safe havens.

slightly bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows skewed to the sell side after many strong weeks for buyers.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Back to no clear read

We had solid context for a rally these last several weeks. Now things seem to be coming into balance, and without any signals from IndexModel we cannot really form a strong bias heading into the second-to-last week of August.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Choppy through Wednesday. Then look for earnings out of NVIDIA to dictate direction into the weekend.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Seeing potential for balance

Readers are encouraged to apply these techniques to all markets. Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

That weak low on Transports still irks me, but we’ve rallied so far from it, that we’re likely to encounter support ahead of any retest of the lows. This leads to the belief that a new range is forming.

See below:

Semiconductors also seem to be coming into range.

Ether was being pulled up into that vaccum for a while, but last week sellers sharply rejected it. Now it seems more likely we will avoid that pocket short term and instead form a range below it.

V. INDEX MODEL

Bias model is neutral after several weeks of signaling.

No bias heading into next week.

There were four Bunker Busters in recent history — nine weeks back, sixteen weeks ago, twenty-nine reports back and a third thirty-seven reports back.

Here is the current spread:

VI. Six Month Hybrid Overbought

On Friday, August 12th Stocklabs signaled hybrid overbought on the six month algo. This signal has bullish statistics. The cycle runs through Friday, August 26th end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“What we play is life.” – Louis Armstrong

Trade simple, play

Comments »

Accept our progressive leadership and assume your beta role

For thousands of years our DNA has hard coded us to want to win and be in charge of everything. The problem is, most of us did not win the nepotism lotto and worse—most americans have poisoned their guts with pound-after-pound of land meat. And no matter how big-a pick up truck they buy they still cannot out compete the waspy politician with a sensible diet of vegetables and boy blood.

I know. I know. There’s adderall. Most of yous are fiends for it, popping little meth pills like ticked tacks in a bid to keep the focus and energy high. But let me hopefully be the last person who needs to tell you that the bill always comes due.

Your arteries will clog. That draconian mething of your heart will accelerate your one billion heart beat allotment. And unless you calm tf down you’re going to keep ramming your head into a wall like a jabroni trying to fight our One World progressive trajectory.

Eat the bugs, chap. Save your paltry w-2 wages up for an electric vehicle. Simply be kind for a change.

Who knows? Maybe you’ll like not fighting for every heckin’ dang inch of gain on the roadway and in life.

With mid-terms just around the corner, and one of the greatest debt forgiveness schemes (without war) in history on the docket for student loans, the continued progressive victory is all but paid for and guaranteed.

If you need someplace to vent your cave-like anger with the fact that the world no longer needs your alpha-agressor type, perhaps join some gay meetup club for bikes and beef or something.

But if you intend to keep mind sharp for the business of extracting fiat american dollars from the streets and financial systems, accept that the only way forward is signing kum-by-ya and loving your neighbor as much (if not more) than yourself.

Also — Models still want the pump.

Raul Santos, August 14th 2022

And now the 397th Strategy Session.


Stocklabs Strategy Session: 08/15/22 – 08/19/22

I. Executive Summary

Raul’s bias score 4.03, STRONG BULL*. The squeeze higher continues to press higher. Earnings due out from Walmart/Home Depot early Tuesday may accelerate the move higher. Then watch for third reaction to Wednesday afternoon’s FOMC minutes to dictate direction into the second half of the week.

* extreme Rose Colored Sunglasses e[RCS] bullish bias triggered, see Section V.

II. RECAP OF THE ACTION

Slight drift lower through Tuesday. Then a strong pump after cooler-than-expected CPI data. Then a strong rally into the weekend. The Russell continues to be bullish divergent.

The last week performance of each major index is shown below:

Rotational Report:

Key Tech and Discretionary sectors lagged a bit. But upward rotations across the board.

slightly bullish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows heavily skewed to the buy side of the ledger.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

More squeeze into OPEX

Another light week ahead in terms of economic data and earnings. This opens the door for bulls to continue to press higher, with up currently being the path of least resistance.

Stocklabs and Indexmodel are in bullish signals. The above data is bullish. The contextual charts are bullish. This rally is stretched, but the call heading into next week is for continuation.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

The squeeze higher continues to press higher. Earnings due out from Walmart/Home Depot early Tuesday may accelerate the move higher. Then watch for third reaction to Wednesday afternoon’s FOMC minutes to dictate direction into the second half of the week.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Discovery up, up against some pivots

Readers are encouraged to apply these techniques to all markets. Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

That weak low on Transports still irks me, but for now buyers are in control. This index is still hanging out at an interesting pivot zone, and could reclaim an old balance area that chops along all time highs.

See below:

Semiconductors continue to tear higher after a slight pullback last week was aggressively bid into. Similar to transports, this index could pivot up into an old range.

Ether still seems to be drawn to that volume pocket around 2100-2300.

V. INDEX MODEL

Bias model is extreme Rose Colored Sunglasses for a third consecutive week. There was an RCS bearish three weeks prior and prior to that signal it was e[RCS] bullish for two weeks.

I’ve noticed that four e[RCS] readings in tight succession tend to suggest a rally is maturing. So we are certainly in a mature up phase which means the risk of a leg lower is elevated.

There were four Bunker Busters in recent history — eight weeks back, fifteen weeks ago, twenty-eight reports back and a third thirty-six reports back.

Here is the current spread:

VI. Six Month Hybrid Overbought

On Friday, August 12th Stocklabs signaled hybrid overbought on the six month algo. This signal has bullish statistics. The cycle runs through Friday, August 26th end-of-day.

VII. QUOTE OF THE WEEK:

“I never lose. I either win or learn.” – Nelson Mandela

Trade simple, keep learning, keep winning

Comments »

First a squeeze, then a pump

Not much to elaborate on. We’re probing higher lads. The deals are flowing. Heckin’ Madam Speaker of the House asserted her dominance over the red commies and let the world know that semiconductors belong to democracy. The White House is about to put out big league electic vehicle credits. And they’re lining up the knockout punch, simply erasing billions in student debt, just in time for the midterms.

It really is game over. The progressive thinkers have won and markets are responding in kind.

Amazon went out and bought iRobot. Why not? Soon alexa will be roaming around our homes and yards, zapping things with lazers and ordering our canned bugs whenever our allotment runs low.

Jack is hard at work growing his goatee and solving Universal Basic Income.

I am growing corn and courting the building department to allow for me to make to make to be allowed this time soon for to buildt the greatest steely plastic doohicky all of 5000 square feet of Raul’s wonderlandt.

Which will of course mostly be inhabited by robots and plants.

My call heading into next week is simple — we squeeeze the no dang good short sellers. The paranoid. The kook and the seemingly so smart chartist. Through Wednesday morning. Then we rightly melt their faces off with the most grotesque post CPI pump.

That’s my bias heading into the week before opex. Kill the shorts.

Raul Santos, August 7th 2022

And now for the 396th edition of Strategy Session.


Stocklabs Strategy Session: 08/08/22 – 08/12/22

I. Executive Summary

Raul’s bias score 3.65, medium bull*. Buyers continue to sqeeze higher early on. Then watch for third reaction to Wednesday morning’s CPI data to show direction into the second half of the week.

* extreme Rose Colored Sunglasses e[RCS] bullish bias triggered, see Section V.

II. RECAP OF THE ACTION

Sideways and choppy through Tuesday. Strong rally Wednesday. Continuation Thursday. Sellers pressured the tape post non-farm payroll data. Then we sort of chopped and regained the NFP reaction into the weekend. Divergent strength from the Russell 2000.

The last week performance of each major index is shown below:

Rotational Report:

Interesting to see muted rotations during a somewhat strong week. However, leadership from Tech and Discretionary is ideal for bulls.

slightly bullish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows stabilizing. Slight bullish skew with mostly oil companies populating the sell side of the ledger.

slightly bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Squeeze into OPEX

The earnings calendar lightens up this week, and with the week having a clear focal point with CPI Wednesday morning, it provides plenty of runway for a short squeeze. The rally is several weeks mature, and the risk of turning lower is elevated. But given the contextual structure of earnings, White House policy, calendar/opex, indexmodel/stocklabs signalling and scheduled economic events we have the ingredients for a squeeze.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Buyers continue to squeeze higher early on. Then watch for third reaction to Wednesday morning’s CPI data to show direction into the second half of the week.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

We’ve probed higher and sellers haven’t really emerged, yet

Readers are encouraged to apply these techniques to all markets. Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

That weak low irks me. But for now buyers are in control. This index is coming into the week right along an interesting pivot zone that I expect to see contested and perhaps a multi-day battle for control.

See below:

Semiconductors have printed a streak of green candles that give the index a strong discovery up look. We could see a new range develop soon.

Ether has been auctioning on the CME for about a year-and-a-half and in that time it has left a significant volume pocket up between about 2100-2300. I could see us spending some time up in that zone, filling out the profile. Or it could be a huge wall of resistance. Either way it seems like an area we could probe up into now that the overplay for the underlay is complete.

V. INDEX MODEL

Bias model is extreme Rose Colored Sunglasses for a second consecutive week. There was an RCS bearish two weeks prior and orior to that signal it was e[RCS] bullish for two weeks.

I’ve noticed that four e[RCS] readings in tight succession tend to suggest a rally is maturing. So we are certainly in a mature up phase which means the risk of a leg lower is elevated.

There were four Bunker Busters in recent history — seven weeks back, fourteen weeks ago, twenty-seven reports back and a third thirty-five reports back.

Here is the current spread:

VI. Six Month Hybrid Overbought

On Tuesday, July 19th Stocklabs signaled hybrid overbought on the six month algo. This signal has bullish statistics. The cycle runs through Tuesday, August 2nd end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“To lose patience is to lose the battle.” – Gandhi

Trade simple, trust the process MORE

 

Comments »