Sunday, May 1, 2016
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
2,385 Blog Posts

May Is Coming For You


All of worst fears will materialize in May.  Lawns, inundated with dandi-lions and grubs.  Biker gangs, lawn-jobbing the soft turf.  Grass clippings, filling sinus cavities, swelling faces into amorphous balloons.

Spring brought the out the heathen speculator, and nature intends to make a correction to the economic tilt benefiting stock pickers.  It would behoove you to stock up and gold bricks, allergy pills, and dry bulk.  Then, from the safety of your air-tight shelter, attend the Investor Boot Camp in May.  Unlike other investor conferences, no human or elemental contact is necessary.  You can elevate your game from the safety of your shelter, away from the deadly germs, viruses, and allergies.

See Also: Deadly Zika Virus Claims Life in Puerto Rico

You have, all of you have, perhaps 3-4 days to flee the stocked market and board the ark.  Then, my best guess, is all hell breaks loose.

Welcome to May.

Distinguished members of Exodus, the latest Exodus Strategy Session, my 76th iteration, has been published.  Be sure to check it out.  Questions will be answered in the order they are received. Cheers!

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Deadly Zika Virus Claims Life in Puerto Rico; Intrexon Spikes Higher $XON


The Zika virus is officially killing people on American soil.  Friday afternoon the CDC reported 1 death from the Zika virus and 683 cases of infection in Puerto Rico.

The morbid news briefly spiked Intrexon shares higher.  The company has proposed using their genetically engineered mosquitoes to combat the festering tropical crisis.

See Also: Genetically Modified Mosquitoes Are Safe, But Test Them on Floridians Just in Case

Intrexon shares have been under pressure since April 21st when reports showed Key West residents are resisting plans to release thousands of GMO mosquitoes onto the southern island.  Perhaps now, seeing these bloodthirsty creatures taking lives, Floridians will allow the company to go ahead with their biological warfare.

Bottom line: the mosquito is a disease spreading pestilence.  Draconian methods have been used for 100s of years to combat the spineless bastards.  Now something more sophisticated exists and everyone plays the ignorant paranoia card against it.  They need to be corrected, completely and entirely-the residents and the mosquitoes.

Any disruption to the ecosystem will be adderssed when the necessity arises.  For now, eliminate the Zika carrying monsters.

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BEWARE: Raul Goes After Another Stock Trade


Heed my caution, the circuitry powering the stock exchanges is designed to smell out stock traders like me and destroy them.

Thus, when you see my initiate my second stock trade of the year, your concern is warrented.


This go around I bought MNK.  This buy came after performing a top-down analysis last night using Exodus.  The study can be found by clicking here.

Same risk management applies: 10 day hold or -10% stop loss.  Godspeed.


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Pajama Traders Dig into The Amazon Bid


NASDAQ futures are heading into Friday gap down after an overnight session featuring normal range and volume.  Price action was balanced but is now pushing lower as we head into cash open, taking back most of the spike seen after Amazon reported strong earnings yesterday AMC.  At 8:30am Personal Spending data came out below expectations.

Also on the economic docket today we have U of Michigan confidence at 10am and Baker Hughes rig count at 1pm.

Yesterday we printed a neutral extreme down.  The session started off trending higher before sellers rejected a move back up into Tuesday’s range.  Sellers then traversed the entire daily range and accelerated down through Wednesday’s range.  During settlement Amazon reported strong earnings and price spiked up, nearly touching the day’s midpoint.

Heading into today my primary expectation is for sellers to push lower and test below yesterday’s low 4346.25.  Look for responsive buyers down at 4343 then two way trade to ensue.

Hypo 2 buyers work into the overnight inventory (the pajama traders) and work price higher to close the overnight gap up to 4383.75.  Buyers then take out overnight high 4391.25.  Look for responsive sellers up at 4398.25 and two way trade ensues.

Hypo 3 selling drive early on takes out 4343 and sustains trade below it, setting up a move to target 4321.75 before two way trade ensues.  Stretch targets to the downside are 4300 then 4293.



Volume profiles, gaps, and measured moves:



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Digging into Earnings Season Data: Finding Actionable Stock Picks with Exodus


Several Exodus users are competent and operate the system to extract actionable stocks.  They also engage the macro timing algorithm like it is second nature.  Other members, mostly noobs, need to be shown the basics.

That is why they sent me.  I am the expert.  Please do not envision me like a savant—naturally gifted in the fields of software, stocked markets, and statistical analysis.  Running Exodus is not rocket science, though it was developed by a Space Alien Magician.  It is simple to operate. Let’s go top down and find actionable stocks right now, shall we?

Step 1: Decide The Relevant Time Frame

You need to think about how far into the past you want your data to go.  I want to see which sectors are outperforming since the start of earnings season, which was about 2-weeks ago.

BEHOLD: 2-WEEK SECTOR PERFORMANCE (save all applause until the end)


Nothing really stands out, nothing except the haymaker Basic Materials landed square on the scrotum of bearshitters.  Goodness, look at that thing.  Now comes my bias, and this is the part where I tailor the results for my needs, and why you need to become self sufficient at this simple form of analysis.  I do not want or need a Basic Materials stock in my portfolio.  So I will instead dig into the second best performer, our good friend Healthcare.

Step 2: Enter the Armory And Choose a Weapon


Armed with the sector intelligence we gathered above, we now head into The Grid.  The Grid is the biggest page inside Exodus and is loaded with tools you can use to hone in on winners.  The whole Sell in May thing has me cautious.  Therefore I am picking the Free Cash Flow model portfolio as my weapon.  It is loaded with fundamental filters by the Le Fly himself.  Great screen when you want to find companies whose operations were sound over a trailing 12-month period, in hopes their operations will continue to funnel cash into the company, thus fending off any liquidity issues should credit start to tighten.

I refuse to write out all the steps I take to soup up the Free Cash Flow screen to find actionable stocks.  If you are serious about using Exodus set up a 15-minute phone call with me by calling 800-863-7110, emailing, sending me a DM on Twitter @IndexModel, or ping me on SnapChat [VCali].  Exodus members can access the screen by clicking here.

However, for the unwashed, if you’ve stuck around with your hat out, bedraggled and smelling of cheese, waiting for PICKS, I have your picks.



From the list I like GMED the best, then MNK ::takes bow, basks in applause::



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Preparing for The Amazon [Earnings]


NASDAQ futures are heading into Thursday gap down after an overnight session featuring elevated range and volume.  Price was pushing higher after the bell yesterday afternoon–perhaps some carryover from the FOMC rally, but also with the help of strong earnings from Facebook–and price briefly reclaimed Tuesday’s range.  However just before midnight price spiked lower on disappointing actions from the Bank of Japan, pushing price back down to Wednesday’s midpoint before two-way trade ensued.  At 8:30am Initial/Continuing Jobless claims data came out better than expected and first quarter GDP results were below expectation.  The initial reaction is muted, sideways.

See Also: Bank of Japan Holds Off on New Stimulus, Nikkei And Futures Donkey-Punched With Vigor

Also on the economic docket today we have a 2-year floating rate auction at 11:30am and a 7-year note auction at 1pm.  After the bell Amazon is reporting earnings.  Amazon is the last major tech player to report.

Yesterday we printed a neutral extreme up.  The session opened gap down after disappointing Apple earnings.  An early attempt to buy the gap down was thwarted when sellers stepped in and continued working price lower.  Just after 10:30am the market went range extension down and printed a failed auction before coming into balance ahead of the FOMC rate decision.  3rd reaction analysis yielded the buy and we had a strong post-FOMC rally to close out at session high.

Heading into today my primary expectation is for buyers to press into the overnight inventory and attempt a gap fill up to 4425.  Responsive sellers step in here and begin working price lower, setting their sights on overnight low 4392.25.  Just below overnight low responsive buyers step in and two way trade ensues.

Hypo 2 sellers push off the open and take out overnight low 4392.25 and continue lower to 4382.25 before two way trade ensues.

Hypo 3 buyers close overnight gap up to 4425 then become initiative, working price up through overnight high 4442.25.  Patriotism kicks in and buyers continue higher to target 4450.  Look for responsive sellers up at 4466.50 before two way trade ensues.



Volume profiles, gaps, and measured moves:


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Bank of Japan Disappoints: Stock Futures Tumble


This is what we’re reduced to–central bank actions and the algorithimic responses they generate.

After USA central banks managed to put a bid in the tumbling marketplace, Japanese CBs manage to do the opposite.


Let that soak in…yep still doesn’t matter.  Unless you’re a robot, then you’re like:



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Longs Liquidated Overnight: Hump Day Economic Schedule Is Packed


NASDAQ futures are coming into Wednesday gap down after an overnight session featuring an elevated range on normal volume.  Price made a fast move lower after the Apple earnings then came into balance.  The resulting market profile has a b-shape, which suggests longs were liquidated but sellers never became initiative.  Thus it could be only a temporary phenomenon.  At 7am MBA Mortgage Apps came in at -4.1% well below last month’s 1.3% read.  At 8:30am Advance Trade Goods balance put a slight bid in the market when the data came out better than the consensus forecast.  US trade deficit for market was-$56.9 billion vs -$62.8B expected.

Also on the economic calendar today we have Pending Home Sales at 10am, crude oil inventory at 10:30am, the FOMC rate decision at 2pm, and Facebook earnings after market close.

Yesterday we printed a normal variation down.  While the other major indices are resilient–flat and/or higher–the NASDAQ spent most of the session working lower.  After opening gap up, sellers pushed the overnight gap fill lower before buyers made an early attempt to move price higher.  This was met with a strong responsive offer that sent the market down below Monday’s low.  A brief responsive bid stepped in around lunchtime but was overrun in the afternoon when sellers became initiative.  The end of the session featured a strong ramp higher, before the Apple earnings eventually sent the market careening lower.

See Also: The Chinese Billionaire Was Right: Apple…OBSOLETE!

Heading into today my primary expectation is for buyers to work the market higher and test back up to yesterday’s session low 4431.75.  Look for responsive sellers up at 4440.75 then two way trade ensues as we wait for the FOMC rate decision.

Hypo 2 sellers take out overnight low 4400.75 setting up a move to test 4387.25 before two way trade ensues ahead of the FOMC minutes.

Hypo 3 sellers take out overnight low 4400.75 then stall out.  We settle into two way trade from 4420 – 4400 awaiting the FOMC minutes.

Hypo 4 strong buyers press higher to close overnight gap up to 4453.25 then take out overnight high 4454.50.  Look for responsive sellers up at 4466.25 before two way trade ensues.



Volume profiles, gaps, and measured moves:


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Apple misses on revenues after iPhone sales stall out.  The company jacked up their dividends by 10% WTF!?  They are admitting, quite publicly, that the shareholders are better stewards of the moneys then they are.

Q3 revenue guidance is weak, bleak, and completely glum.

They are out of ideas.  Their hardware is obsolete, cue the sad horn.  Homeboy from China was right.

SEE ALSO: The $AAPL Growth Story Is Officially Dead; Company Expected To Post First Growth Loss Since 2003

The earnings report is ravaging the NASDAQ, which off by another 30 handles.  The index was still licking its wounds from last week when Google parent Alphabet and Microsoft dropped their crappy earnings on unsuspecting visitors to the Walled Street.

Thus we begin the descent lower, overall.  The FOMC, led by renegade banker Janet Yellen can either right the ship tomorrow afternoon or continue with its current trajectory, which is nose down–probing lower.

Apple is down about 6% after hours.


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News People Love Twitter; Wall Street Not So Much


Twitter reported earnings after the bell and the stock is lower by about 10%

They reported 83% of monthly active users [MAU] are mobile.  Therefore you are probably mobile, reading this now.

Q2 guidance call for revenues from $590-610M verses an estimate of $677.6M.  The soft forecast is likely driving the move after hours.  Non-GAAP EPS came in slightly better than estimates, $0.15 vs $0.10 estimate, while on a GAAP basis the company’s loss per share was -$0.12.  Accountants, figure that one out.  Or don’t.

Everyone sees Twitter as a buyout play at this point.  But nobody wants to buy the misfit social media company.  Meanwhile every single news outlet and their underlying pundints love the service.  We scour it all day and night and in our sleep.  Finance guys love Twitter [more so StockTwits lately].  Everyone has exposure.  Maybe that’s the problem–no buyers left.

Irregardless [sic] we can all wait with baited breath for the company’s hipster CEO who is giving an interview to The CNBC, set to air first thing tomorrow morning.

Headline photo credit goes to @RampCapitalLLC.  If you do not already follow him on Twitter, do yourselves a favor and DO IT.

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