Saturday, July 23, 2016
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
2,493 Blog Posts

Preparations Are Being Made For War in The South China Sea

Chinese soldiers take part in a parade commemorating the 70th anniversary of Japan's surrender during World War II in front of Tiananmen Gate in Beijing, Thursday, Sept. 3, 2015. The spectacle involved more than 12,000 troops, 500 pieces of military hardware and 200 aircraft of various types, representing what military officials say is the Chinese military's most cutting-edge technology. (AP Photo/Ng Han Guan)

The rumble of war drums is starting to resonate from the Far East.  They do not like the rhetoric coming out of the Republicans and are fortifying several key islands in the South China Sea with missiles and troops:

Beijing has always paired its military maneuvers in the sea with rhetorical bombast printed in state-run media, which offers a window into the Communist Party’s thinking.

But in the wake of the Hague tribunal’s verdict, the government’s mouthpiece media have spoken more forcefully about the prospects for war.

One op-ed from a state-run outlet asks, “Is there any chance of war in the South China Sea?” The same piece suggests that, if the United States did battle China over the sea, America may be vanquished: “The 21st century has witnessed a series of failures of U.S. military actions.”

Another column compares the tribunal’s South China Sea ruling to the U.S.-orchestrated campaign to convince the world that Iraq possessed “weapons of mass destruction” — thus making the case for invasion.

According to the op-ed, this is the “same trick” played by the U.S., which “believes in nothing but ‘might makes right.’” (For good measure, the state-run paper adds that former President George W. Bush should be charged as a war criminal.)

China has a long history of struggling in battle.  Although they have ‘the world’s largest military’ they do not have the strongest.  According to Credit Suisse, that title belongs to the U.S.A.

chinaspray

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Baby Born in New York City With Zika Virus Birth Defects

craybay

Travel into the southern lands has become off limits for breeding families.  For the first time a baby was born inside a New York City hospital with an abnormally small brain and other problems associated with the Zika Virus:

For the first time, a baby has been born at a New York City hospital with birth defects from a Zika virus infection transmitted by the baby’s mother, the New York City Health Department said Friday.

The mother was infected with the Zika virus, commonly spread by bites from a particular species of mosquito while in a country where the virus was being actively transmitted.

These areas include nearly all of South and Central America and the Caribbean.

The baby was diagnosed with microcephaly, or a smaller than normal brain size and other brain problems, the health department said.

The baby tested positive for Zika, the city said. According to the federal Centers for Disease Control and Prevention, as of July 14th, 12 infants have been born in the U.S. with birth defects and evidence of possible Zika infection.

The mother was infected outside of the United States.

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Active Shooter(s) in Munich; Police Reporting ‘Several Dead And Wounded’

munichee

Germany is coming under fire this evening.  Munich Police report several people are dead and wounded after a gunman opened fire at a shopping mall near the iconic Munich Olympic stadium.

Authorities are asking media and individuals not to post any footage of the police operations underway.  This is an odd request, incidentally, in the age of smartphones.

Some reports suggest a second location is being attacked, but the reporting thus far has been spotty due to most information being in German.

As summer drags on, Europe has become quite volatile.  Per the usual, the U.S. markets are showing no signs of reacting to this terrorist attack.  Old hat, priced in events, these shootings.

 

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American Markets Are Once Again Stable

caddy-chak

NASDAQ futures are coming into Friday gap up after an overnight session featuring normal range and volume.  Price held yesterday’s range during a slow and balanced Globex session.

On the economic calendar we have Markit Manufacturing PMI at 9:45am and Baker Hughes Rig Count at 1pm.

Yesterday we printed a normal variation down.  The sellers became initiative on the day just before the lunch hour.  Selling was orderly and located reponsive buyers right around the measured move levels of 4630 (see yesterday morning’s hypo 2).

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4639.25.  Look for buyers right around yesterday’s close who work price up through overnight high 4653.75 and test above yesterday’s high 4662.25 which unveils a seller and two way trade ensues.

Hypo 2 sellers work gap fill down to 4639.25 then take out overnight low 4632.75 and continue lower to test Thursday’s low 4626.75.  Look for responsive buyers down at 4625 or 4616.75 and two way trade to ensue.

Hypo 3 strong selling pushes down through 4610.75 setting up a move to target the open gap down at 4605.

Hypo 4 strong buying sustains trade above Thursday’s high 4662.25 setting up a move to target 4674.25.

Levels:
07222016_NQ_MP

Volume profiles, gaps, and measured moves:
07222016_NQ_VPgapsMeasuredMoves

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Starbucks Crashes Lower After Posting Revenues $100 Million Dollars Below Expectations

sbux-diabeatus

Shares of Starbucks, the Seattle sugar-drink and coffee dispensary, initially spiked lower by -4% after the company reported earnings.  Since then trade has been volatile but investors are recuperating some of their losses.

Their earnings report was decent and inline with expectations.  Here are some highlights:

The company announced Shanghai, China as the location of its first  
international Starbucks Reserve Roastery and Tasting Room. Scheduled to open in  
late 2017, the 30,000 square-foot space will reflect a similar, immersive  
all-sensory experience as the company's first location, which debuted in its  
hometown of Seattle, Washington in 2014.

They’re opening a jumbo-roaster in China in hopes of having it knocked off my local Chinese merchants.

In May, Starbucks announced that it had closed an underwritten public  
offering of senior notes, including the first U.S. Corporate Sustainability  
Bond. The company will use the net proceeds from the offering of $500 million  
in 2.450% Senior Notes due 2026 to enhance its sustainability programs around  
coffee supply chain management through Eligible Sustainability Projects.

They sold some expensive looking debt.  Over in Japan they loan out millions for as little as 0.001% so they could have done better.

Net revenues for the China/Asia Pacific segment grew 18% over Q3 FY15 to  
$768.2 million in Q3 FY16. The increase was primarily driven by incremental  
revenues from 888 net new store openings over the past 12 months.

See Also: $SBUX Disappoints, Shares Fall in The After Hours

Incremental revenues, you say?  Are the existing China stores growing?  No word but wow, going all in on China and opening 209 new stores, yikes.

Q3 EPS $0.49 vs. Est. $0.49, Rev. $5.2B vs. Est. $5.3B
Q4 Adj. EPS $0.54-$0.55 vs $0.55 Est.

So inline on Q3 and in-line with guidance.  Boring normally, but when you’re priced for perfection, troublesome.

The earnings call is scheduled for 5pm EST.

 

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Calm Ascent Continues But Today Is Traders Best Hope for Volatility

goooat

NASDAQ futures are coming into Thursday flat-ish/gap up after an overnight session featuring normal range and volume.  Price held yesterday’s upper quadrant while slightly extending price to new highs.  At 8:30am the Philadelphia Fed reading was well-below expectations and Initial/Continuing Jobless claims data was better than expected.

Also on the economic docket today we have Existing Home Sales and Leading Indicators at 10am and a 10-year TIPS auction at 1pm. Today is also packed with earnings, the most reports this week.  All this combined may introduce some volatility into the market.

Yesterday we printed a short-squeeze profile.  They look like a capital letter-P.  It was nearly a trend day but fell off the highs near the end of the session.

Heading into today my primary expectation is for buyers to continue working price higher, up through overnight high 4661.50.  Look for responsive sellers up near 4674.25 and two-way trade to ensue.

Hypo 2 sellers work down through overnight low 4643 and test 4630.50 before settling into two way trade.

Hypo 3 strong sellers sustain trade below 4630.50 trigger a liquidation which probes below yesterday’s low 4615.50 and find responsive buyers just below at 4611 before two-way trade ensues.

Levels:

07212016_NQ_MP

Volume profiles, gaps, and measured moves:

07212016_NQ_VPgapsMeasuredMoves

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Microsoft Earnings Blast NASDAQ To Prices Abandoned Last Christmas

santarobot

NASDAQ futures are coming into mid-week trade gap up after an overnight session featuring normal range and volume.  Price worked higher overnight, to a fresh swing high which probed late-December 2015 price levels, following an earnings beat from Microsoft just after closing bell.

See also: Evil $MSFT Posts A Solid, Albeit Boring, Quarter

On the economic docket today we have crude oil inventories at 10:30am.

Yesterday we printed a normal variation down.  It was a slow, balanced tape that drifted lower after coming into the day gap up.  During settlement price spiked higher following Microsoft earnings.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4605.  From here sellers continue working price lower, down though overnight low 4597.75.  Look for responsive bidders down around 4586.50 and two way trade to ensue.

Hypo 2 buyers gap-and-go, take out overnight high 4626.75 early on and continue exploring higher prices.  Look for responsive sellers up at 4630.50 and two way trade to ensue.

Hypo 3 buyers blast up-and-out of the ascending wedge forming on the daily chart, up through overnight high 4626.75 and sustain trade above 4630.50 setting up a secondary leg higher to target the open gap up at 4645.50 before two way trade ensues.

Hypo 4 strong selling closes overnight gap 4605, take out overnight low 4597.75 and breaks down through 4580 triggering a liquidation down to the open gap at 4561 before two way trade ensues.

Levels:

07202016_NQ_MP

Volume profiles, gaps, and measured moves:

07202016_NQ_VPgapsMeasuredMoves

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Still No Catalyst; High Balance Persists

waitwaitwait

NASDAQ futures are coming into Tuesday with a slight gap down after an overnight session featuring normal range and volume. Price mostly worked lower, taking back about 68.8% of the rally from yesterday before finding a bid and settling into two-way trade.  At 8:30am the Housing Starts and Building Permits data was [very] slightly better-than-expected.

Also on the economic docket today we have both the 52-week and 4-week T-Bill auctions at 11:30am.

Yesterday we printed a double distribution trend up.  The week kicked off with a slight gap up and buyers managed to drive higher from it—taking out last Friday’s high early on and sustaining trade above it for the rest of the session.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4607.  Buyers continue higher, up through overnight high 4611.75 and tag 4617.25 before two way trade ensues.

Hypo 2 buyers close the gap up to 4607 then stall out.  The market rolls over and takes out overnight low 4592.50 and continues lower to target 4586.75 before two way trade ensues.

Hypo 3 sellers gap and go lower, take out overnight low 4592.50 early on and work price down to 4582.25 before two way trade ensues.

Hypo 4 some kind of liquidation takes hold.  Sellers sustain trade below 4582 setting up a liquidation down to 4591.75 before two way trade ensues.

Levels:

07192016_NQ_MP

Volume profiles, gaps, and measured moves:

07192016_NQ_VPgapsMeasuredMoves

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Stocks Rip Higher After Chaotic Weekend

paused-thinking

Early this morning, combing through news feeds, premium chat rooms, and my precious twitter stream there was a recurring sentiment among market participants–a toxic mentality that often leads to errors.

This will not be a long lecture, only a quick reminder:

You are not in control of the markets.

If you feel anger or frustration or confusion, it could be a [failed] attempt by your psyche to impose your will on the marketplace.

Step back, lads.

Moving on…markets are ripping higher after being in balance since Thursday.  This is hypo 2 from the morning report.  Why are the markets attempting to breakout of balance already? Just after 10am, just after the NAHB Housing Market Index the rally began.  The housing read was just a touch below expectations and is not the likely catalyst.  Bottom line–it doesn’t matter why, just do what is right for your and your money in these conditions.

This is the first week I have no edge coming into.  I booked my AMZN short, a trade I took exclusively on snapchat [username: vCali].  The purpose of showing my trades is not so others follow along–instead the purpose is to show what methods seem to work [for now] for me.

I have killed these markets from the last week of May, all through June, and into today.  Typically I would pound my chest and continue my aggressive campaign now, ultimately foregoing a decent chunk of my hard-earned gains.

This time, since I have no edge, I am backing off, for the win.

Markets do not care about your reaction to external events.  If they only want to move based on central banks and earnings, so be it.  Accept it, trade it, or move on to a different vocation.

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Stocks Begin Week Balanced as Investors Wait To Hear Earnings

A trader fills orders Monday in the Standard

NASDAQ futures are coming into the week gap up after an overnight session featuring normal range and volume.  Price bounced around inside Friday’s range overnight, extending the balance formed back on 07/14.  Bank of American reported earnings this morning and is trading slightly higher.

Also on the economic docket today we have the NAHB Housing Market Index at 10am, 3- & 6-month T-bills being auctioned at 11:30am, Long-term TIC flows at 4pm, and IBM, NFLX, and YHOO reporting after the bell (among others).

Last week the market worked higher.  We opened gap up every day and most sessions were simply balanced, drifting trade after their respective gap up.  Friday was the first day sellers managed to turn initiative and probe a bit lower, but overall the week was dominated by slow accumulation.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4579.25.  Sellers take out overnight low 4577 and find responsive buying ahead of 4570 before two way trade ensues.

Hypo 2 buyers gap and go, work up and take out overnight high 4598.75 and test above last Friday’s high 4603.50.  Sellers step in around 4621.25 and two way trade ensues.

Hypo 3 strong sellers work gap fill down to 4579.25, take out overnight low 4577 then sustain trade below 4570 setting up a move to target the open gap down at 4561 before two way trade ensues.

Levels:

07182016_NQ_MP

Volume profiles, gaps, and measured moves:

07182016_NQ_VPgapsMeasuredMoves

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