iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,334 Blog Posts

Back near the lows, NASDAQ probes down near swing low overnight, here is the Tuesday morning trading plan

NASDAQ futures are coming into Tuesday pro gap down after an overnight session featuring extreme range and volume.  Price worked lower overnight, uni-directionally working down into the 10/11 range, which is the day that we recently made a swing low.  As we approach cash open, prices are hovering near the midpoint of the 10/11 range.

On the economic calendar today we have a 4- and 8-week T-bill auction at 11:30am and a 2-year Note auction at 1pm.

Yesterday we printed a normal variation up.  The day began with a gap up that sellers quickly resolved in the first 30 minutes of trade.  Sellers were unable to take out the Friday low, instead discovering a responsive bid (responsive relative to Monday open, initiative relative to Friday close) which came in and worked higher, eventually taking us range extension up but ultimately settling into a choppy balance, with the rest of the day spent trading above the midpoint.  It was an inside day.

Heading into today we are way out of balance, and I expect the open to be violent.  Look for buyers to work into the overnight inventory and work up towards 7100.  Then look for sellers to reject a move back into the Monday low 7100.50 and two way trade to ensue.

Hypo 2 buyers regain Monday low 7100.50 and continue working higher to close the gap up to 7154.75 setting up a move through overnight high 7160.25.  Look for sellers up at 7184 and two way trade to ensue.

Hypo 3 gap-and-go lower, down to 7000 before two way trade ensues.

Hypo 4 full-on liquidation, look for buyers down at 6933.50.   Stretch targets to the downside are 6921.25, 6906, 6900, then 6854.75.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ tests last week’s low, discovers strong bid, here is the Monday morning trading plan

NASDAQ futures are coming into Monday gap up after an overnight session featuring extreme range and volume.  Price worked lower Sunday evening, briefly trading below last week’s cash low [established Monday] before discovering a strong responsive bid.  The rest of the globex session was spent rotating higher, uni-directionally.  As we approach cash open price is hovering near Friday’s midpoint.

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

Last week began with a choppy Monday, a normal day which is rare.  Then Tuesday say a gap up and trend higher.  Wednesday held the gains in choppy trade but then most gains were given back Thursday.  Friday attempted to rally but was rejected and we closed above, but near the week’s low.

On Friday the NASDAQ printed a double distribution trend down.  The day began with a gap up and and drive higher.  The drive stalled before the first hour [initial balance] and responsive sellers stepped in.  They erased the morning drive then quickly closed the overnight gap.  The rest of the day was spent chopping along the lows.  The market briefly took out Thursday’s low during the chop but could not sustain trade below it.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7107.75.  Buyers step in here and two way trade ensues, eventually working back up through overnight high 7176.75 by end-of-day.

Hypo 2 buyers gap-and-go higher, sustain trade above 7188.25 setting up a move to target 7200.  Stretch target is 7263.50.

Hypo 3 stronger sellers close overnight gap 7107.75, then take out last Monday’s gap 7076.25 on their way to taking out overnight low 7057.  This sets up a move to target the 7000 century mark.

Levels:

Volume profiles, gaps, and measured moves:

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Reluctantly, I am once again bullish

Listen lads, I haven’t had the best go at things when I rely solely on my intuition.  My intestinal fortitude is perhaps too strong from a childhood spent eating spoiled meats and other fermented oddities.  The wiggly worms of my past must have infiltrated my DNA and mutated it to make me some kind of man-wolf-beast who regularly craves ultra-violence and extreme risk.  Year-after-year of hitting my head on cement or lopping off tens-of-thousands of dollars from my trading accounts broke me of my disgruntled ways.  Eventually I became a beta human, submitting myself to the will of my robot overlords and listening to their commands without question.

The result? I consistently make money trading.  Hallelujah.  I am more empathetic to elderly and unattractive humans—two human sets I used to run circles around in a sometimes cruel manner.  I think aggressive white men are a pox on society and deploy a krav maga approach to demeaning them both physically and mentally.  Waiting slowly, until the absolute necessary moment, then causing grave harm to their person.

I trade in a similar fashion.  Every trade is precluded by a Weekly Strategy Session to form bias, a morning report to build context and define working price levels, an algorithm to signal ideal entry conditions, and a special software to display order flow on the fly.  Wait, wait, wait.  Then attack with the ferocity of a crocodile.

Apex predator flow.  Crocodiles haven’t evolved in 3 million years.  They can sit in a puddle of mud, rarely ambulating, for as long as four years.  Waiting for an unlucky cloven-hoofed beast to slip into the kill zone that WHACK! ROLL! Feast.

Anyways, I have reasons to be bullish until November 1st.  The contextual overlay I have after preparing the Exodus Strategy Session has me feeling like this cycle will be a test of stoic grit.  That being said, there are a few contextual caveats that may bode well for the bulls.  Namely the semiconductor index.  It sure seems like this vital piece of the rally pie is coming into the week on the low-end of an established range:

If ‘the market’ still believes in the valuations we’ve enjoyed for much of 2018, then this level is likely to be defended.

I am going to be bullish this week until otherwise noted.  Whether or not this is the right side of the tape to be on, as always, is tbd.

Exodus members, the 205th edition of Strategy Session is live, go check it out!

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NASDAQ in a violent balance, here is the Friday morning trading plan

NASDAQ futures are coming into Friday gap up after an overnight session featuring extreme range and volume.  Price worked sideways overnight, bouncing around below the midpoint of Thursday’s trade.  As we approach cash open price is hovering along the midpoint of Thursday.

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

Yesterday we printed a double distribution trend down.  The day began with a gap down and drive lower.  Initially, the price level high lighted in hypo 3 of the morning report [7207] was defended by buyers, but a second move into it saw sellers overtaking the level which triggered a liquidation.  Price continued rotate lower until tagging the 7100 century mark where two-way trade ensued.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 7196.  Look for sellers up at 7200 and two way trade to ensue.

Hypo 2 sellers work into the overnight inventory and close the gap down to 7139.25 setting up a move to take out overnight low 7135.50.  Look for sellers to accelerate the action down, working to fill the open gap at 7076.25 before two way trade ensues.

Hypo 3 stronger buyers sustain trade above 7200 setting up a move to target 7263 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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The old guard is strong

One observation I forgot during last night’s muse is the relative strength showing up in three names (FD: I am invested in all three) that I consider to be ‘the old guard’.  These are immutable legends; immortal entities revered and feared as much as the ancient gods once were.  Goldman Sachs, Walmart, and AT&T.  I have been noticing their divergent strength during our current sell-off:

My initial interpretation is that the risk cycle has either been reset or is in the process of being reset, with investors rotating back to quality after abandoning their high-risk saas, cryptocurrency, and pot speculations.

A reset of the risk cycle is a positive sign for the health of the stock market, if that is in fact what this small observation is alluding to.

As always, tbd.

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RAUL status report from the trenches

Wanted to drop a quick blog tonight.  I have not been doing much night blogging.  Lately I read at night, sometimes consuming a hundred pages of fiction at a time.  It keeps me off Twitter, but I wanted to drop a quick blog and share some observations I’ve made over these last few days while also touching upon some of my favorite ways to pass the time during a drawdown.

It has been tough being bullish since October 4th, especially since we nailed the turn lower one week prior.  When I was on the right side of the action, betting short intra-day and carrying an SQQQ position trade, my visibility was much better than it is today.  I have written extensively about failed auctions in the past, and we certainly are operating in failed auction condition on the NASDAQ futures.  These false breakouts have lead to months of chop in the recent past, but the recent past has also seen them negated by a strong uptrend.  Nevertheless, we again have failed auction conditions and that is good reason to be cautious:

The Exodus hybrid oversold signal that triggered at close-of-business Thursday, October 4th is complete after ticking out 10 trading days.  This signal is what turned me bullish right after being short biased during the first week of Q4. Here is the final performance of each major index over the course of the cycle, as represented by their most popular ETFs:

Party poopers.  These are third sigma NYSE TICKS.  I wrote about these many moons ago.  Here is a link for more background.  We had a series of third sigma positive NYSE TICKs these last few days.  Those are bullish day of, bearish afterwards.  They have had me super cautious:

Having a long bias has taken its toll on me these last few weeks.  I just wanted to write an honest blog and admit that this has been a hard tape for me too.  Trading is quite simple but it certainly is not easy.  When I go into a drawdown I rely on some of the hardest learned lessons of trading.  The ones no mentor can truly prepare you for.  The battle for your mind, for your confidence.  When I am going through a rough patch, it is my hard set risk parameters that keep me from blowing up.  I am grateful to have established daily loss limits and weekly loss limits well in advance of being on the wrong side of the tape.

Losses are part of the game.  It is important that you have routines to keep you from becoming trapped in a rut.  I tend to back away from the markets and focus on other important matters.  One of my favorites is cleaning.  But not just normal cleaning.  Deep dive cleans of furniture or appliances or part of the yard.  I also kicked off my snowboarding ‘prehab’ program last week, which seeks to diagnose and correct major muscle imbalances in my body.  This can significantly reduce the risk of injury when I am hurling myself down the sides of America’s steepest mountains later this year.

What else…I made a bone marrow soup today.  What a primal experience.  I rarely eat animal flesh.  But humans were bone eaters for a very long time.  Back when we were relegated to our proper place in the food chain, somewhere in the middle, we often ate what was left of an animal carcass after the apex preditors had their fill.  That often meant eating bones and marrow.  I think it is a fantastic idea to have these types of inputs.  My very elementary belief is that by consuming the connective tissue around the bones, I will thus strengthen my own connective tissue, further preparing my body to be launched off of tree covered side hips high up in the air.

Anyhow, stay safe out there.  Remember, the stock market was here long before us and will be here long after we are gone.  There is no shame in stepping back to reboot the mind before stepping back into what I truly believe to be the most competitive arena in the world.  High finance, baby.

Keep it simple, keep it tight.

 

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The cycle is nearly complete, here is the Thursday morning NASDAQ trading plan

NASDAQ futures are coming into Thursday gap down after an overnight session featuring elevated range and extreme volume.  Price worked sideways overnight in a balanced session.  As we approach cash open prices are hovering along Wednesday’s midpoint.  At 8:30am Philly Fed and Initial/Continuing jobless claims data came out all better-than-expected.

Also on the economic agenda today we have a 30-year TIPS auction at 1pm.

Yesterday we printed a normal variation down.  The day began with a gap down and drive lower, with sellers pushing nearly to the Tuesday midpoint during the first hour of trade. Then, much like Tuesday, the market briefly went range extension down just after 10:30am before discovering a responsive bid.  The rest of the session was spent working back up through the daily mid then chopping along it, eventually ramping higher near end-of-day but not pushing neutral extreme.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7313.  From here we continue higher, up through overnight high 7317.50.  Look for sellers up at 7348.25 and two way trade to ensue.

Hypo 2 stronger buyers trade us up to 7375.50 before two way trade ensues.

Hypo 3 sellers gap-and-go lower, trading up down through overnight low 7262.25.  Look for buyers down at 7207 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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FOMC minutes on deck, day after trend day, here is the Wednesday morning trading plan

NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme volume on elevated range.  Price worked higher overnight, taking out the Tuesday high before rotating down.  As we approach cash open, price is hovering inside the upper quadrant of Tueday’s range.

On the economic calendar today we have housing starts/building permits at 8:30am, crude oil inventories at 10:30am, and FOMC minutes at 2pm.

Yesterday we printed a trend up.  The day began with a gap up and drive higher as buyer rejected an early attempt to trade back into Monday’s range.  Then, late into the first hour of trade sellers made a second attempt into Monday range which very briefly pressed the market range extension down.  However, this second rejection by the buyers triggered a trend up which continued all the way into closing bell.  The action was accented by a squeeze higher during settlement.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7357.50.  From here we continue higher, up through overnight high 7368.50.  Look for sellers up at 7374.25 and two way trade to ensue.  Then look for the third reaction after the 2pm FOMC minutes to dictate direction into end-of-day.

Hypo 2 stronger buyers sustain trade above 7375 setting up a move to target 7400 before two way trade ensues.  Then look for the third reaction after the 2pm FOMC minutes to dictate direction into end-of-day.

Hypo 3 sellers gap-and-go lower, sustain trade below 7300, setting up a move to target 7271.75 before two way trade ensues.  Then look for the third reaction after the 2pm FOMC minutes to dictate direction into end-of-day.

Levels:

Volume profiles, gaps, and measured moves:

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Globex volume off the charts, Monday range holds, here is the Tuesday NASDAQ trading plan

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring extreme range and volume.  Price worked higher overnight balancing out around the Monday midpoint for several hours before overnight buyers became initiative and worked up near the Monday high.  As we approach cash open price is hovering near the Monday high but all overnight trade has been contained within the Monday cash range thus far.

On the economic calendar today we have industrial/manufacturing productions at 9:15am, NAHB housing market index at 10am, a 4- and 8-week T-bill auction at 11:30am, and long-term TIC flows at 4pm.

Yesterday we printed a normal variation up.  The day began with a slight gap down and drive lower.  The first hour of trade was dynamic and for most of the day we traded inside of it, making it look like we may end up with a normal print.  But then, late in the session price pushed range extension up by a few ticks.  Late in the session the intra-day gains were erased and we closed near session low.  The entire daily range was contained inside of last Friday’s range. Therefore we printed a normal variation up, inside day.

Heading into today my primary expectation is for buyers to gap-and-go higher, close the Friday gap up at 7173.25 then continue higher, trading up to 7200 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and trade down to 7100.  We chop here before rallying back up through overnight high 7153 and continuing higher to close the Friday gap 7173.25 before two way trade ensues.

Hypo 3 sellers work a full gap fill down to 7076.25 then continue lower, down through overnight low 7063.50.  Look for buyers down at 6994.50 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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Strategy session is live, software is bullish but I dunno

Greets my sweets,

Just wanted to drop a quick note—while Exodus is still in a bullish hybrid oversold cycle, my Sunday research indicates we are likely to see more downside action.  Look at the number of industries that had negative money flows last week:

I am still holding a position trade in TQQQ, and will continue to hold it until close-of-business Thursday because I trade my signals.  But I think it is going to become a bigger loser than it already is.

That being said, I am in lovely Montecito and cannot be worried by such trivial matters as the stock market.  I own a large swath of land high inside the northern ring of safety in that is stocked with plenty of fresh water and high ground.

There are few places on earth you can more vividly see the effects of global warming than southern California. One block from our airbnb, mud came sliding down the mountains one year ago and swept away numerous houses.  These coastal towns are being washed away.  But even these things I cannot worry about.

The sun is warm, the palomas are cold, and there is a pool calling my name.

Exodus members, the 204th edition of Strategy Session is live.  Go check it out!

As for the rest of you, I will be back at MotherShip, nestled at my trading desk hidden down alongside the wastelands of Detroit come Tuesday.  Morning trading reports will resume at that time.

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