NASDAQ flagging into first full week of 2019, here is the Monday trading plan

NASDAQ futures are coming into Monday gap down after an overnight session featuring extreme range and volume. Price worked higher overnight, taking out the Friday high before falling back into the upper-quadrant of Friday’s range.  As we approach cash open, price is hovering in the upper quadrant while some morning selling works into the tape.

On the economic calendar today we have ISM manufacturing at 10am followed by  3- and 6-month T-bill auctions at 11:30am.

Last week started out with a balance day, then we we closed Tuesday for New Years Day.  We went gap down into 2019 and found a strong bid for most of the day.  Thursday went gap down and erased most of the Wednesday gain but the Russell began to bullishly diverge.  Friday say a gap up and trend higher.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a trend up.  The day began with a gap up and drive higher.  The buying took us to a new two-week high, probing up in the the 12/19 distribution day before finding any sellers.  Sellers did show up near end-of-session and we flagged into the close.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6432.25.  From here we continue higher, up through overnight high 6495.50.  Look for sellers up at 6550 and two way trade to ensue.

Hypo 2 sellers press down through overnight low 6402.50 setting up a move to target 6273.50 before two way trade ensues.

Hypo 3 stronger buyers sustain trade above 6550 setting up a move to target 6600 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Sometimes you look back and wonder how your mind was so wrapped up in the minutia that you missed an obvious cue.  Sure, my trading and investing is grounded in solid routine and habit.  Yes, I would never take a single trade unless I completed my Sunday research, formed a morning trading plan, and then received an algorithmic entry signal from MOTHERSHIP.  We should have healthy routines for approaching something as important and big as trading index futures, but we run the risk of being so caught up in all of that intellectual work that we miss a not-so-subtle wink from the universe.

Listen to me, did you see that little dog nearly split asunder by the giant fucking longhorn bull last week during an American football match?  That is everything you need to know going into next week.  A pathetic little dog that needs its skin folds regularly cleaned with q-tips, and its butt hole wiped after every poop, was nearly killed on national teevee by a big, healthy Texas long-dicked bull.

The resources wielded by short sellers are very much the size of that dog in relation to the money coming into the stock market every American pay period.

While this weekend has been difficult, and I nearly didn’t make it to my desk to file the Sunday research due to my time being in high demand, I checked in and filed my latest Exodus Strategy Session.  It has all sorts of reasons to be bullish, and it has a plan of attack for the first full week of 2019, but it should be suffice for all readers of this public blog to know that a bullish omen has been sent.

Position accordingly.

ciao

Exodus members, the 216th edition of Strategy Session was late to post, but it is live.  We have an interesting dialogue going in Section III that takes all the recent signals IndexModel has been generating and gives them words.  Be sure to read through how I’ve been navigating this market trough, and what I expect next.

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NASDAQ futures are coming into Friday gap up after an overnight session featuring extreme range and volume.  Price worked a few points below the Thursday low during globex before a strong responsive bid stepped in and drove price 130 points uni-directionally higher.  Sellers were found ahead of the Thursday high and we spent the rest of the session balancing/flagging.  At 8:30am Non-farm payroll data came out mixed and as we approach cash open price is hovering near overnight high, in the upper quadrant of Thursday’s cash range.

Also on the economic agenda today—at 10:30am we have a panel interview featuring Fed chairman Jay Powell and former chairmen Yellen and Bernanke, then at 11am crude oil inventories.

Yesterday we printed a normal variation down.  The day opened with a gap down and after a brief two-way auction sellers worked price down through overnight low.  A responsive bid stepped in by was eventually overrun later in the afternoon as price worked back down to tag the 12/27 naked VPOC at 6148.75.  We ended the day near session low.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 6286.25.  From here we continue higher, to close the open gap at 6370.  Look for sellers up at 6400 and two way trade to ensue.

Hypo 2 buyers stall out around 6300 and two way trade ensues.

Hypo 3 sellers work into the overnight inventory and close the gap down to 6163.50 which sets up a move to target 6100 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume.  Price worked sharply lower shortly after Wednesday settlement on news that Apple was cutting their sales guidance.  Per the Associated Press:

Cook said Apple’s revenue for the October-December quarter — including the crucial holiday shopping season — will fall well below the company’s earlier projections and those of analysts, whose estimates sway the stock market.

Apple now expects revenue of $84 billion for the period. Analysts polled by FactSet had expected Apple’s revenue to be about 9 percent higher — $91.3 billion. The official results are scheduled to be released Jan. 29.

By 10pm New York, NASDAQ futures were probing below the Wednesday cash low.  However by 7am responsive buyers had worked price back into the Monday range.  At 8:15am ADP employment change data came out much stronger than expected:

ADP Employment Change For Dec. 271K vs 179K Economist Estimate ?

— RAUL (@IndexModel) January 3, 2019

The ADP data brought additional buying into the morning pre-market, reducing the overnight losses to -100.  The Labor department remains funded despite the U.S. government shutdown, however the Commerce department is closed and no construction spending or unit vehicle sales will be released today.  At 8:30am initial/continuing jobless claims data from the Labor department was worse than expected.

Also on the economic agenda today we have ISM manufacturing/employment at 10am followed by a 4- and 8-week T-bill auction at 11:30am.

Yesterday we printed a double distribution trend up.  The first day of the 2019 trading year began with a pro gap down that started prices out in the middle of a conviction buying zone established on Thursday, December 27th.  Buyers were active on the open and drove price higher, filling the pro-gap by New York lunchtime.  Buyers managed to extend their gains in the afternoon, but the auction stalled out just after probing above last week’s high.  Mini failed auction.  The day ended with price in the upper quadrant of the session.

Heading into today my primary expectation is for buyers to work into the overnight inventory, trading up to the 6300 century market.  A two-way battle ensues here before buyers ultimately continue working higher to close the overnight gap at 6370 before two way trade ensues.

Hypo 2 buyers press down through 6220 on the open, setting up a move down through overnight low 6188.25.  This sets up a move to tag the naked VPOC at 6151.75 that we left behind on 12/27.

Hypo 3 stronger buyers work up through overnight high 6361 setting up a move to target 6406.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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The iBC top-down sector analysis Q4 quantitative account which is chosen by Exodus and executed through Motif is set to rebalance on market open.  The Motif platform will automatically execute 30 trades that result in the account being equally weighted into the following stocks:

Here is the performance of the account over the last 12-months verses the S&P 500 and verses a hypothetical scenario where it was holding the above stocks instead of its actual holdings:

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NASDAQ futures are coming into 2019 with a pro-gap down after an overnight session featuring extreme range and volume.  Price worked up through the Monday high briefly before beginning a sustained, unidirectional move that descended 230 points lower.  As we approach cash open price is finding balance inside last Thursday’s range, in an area we saw conviction buying last week.

The U.S. government remains shutdown.  This appears to be affecting an 8-week T-bill settlement auction that was scheduled for today.  The only other economic event today is PMI manufacturing index at 9:45am.

On Monday the NASDAQ printed a normal variation down.  The day began with a gap up and after a brief two-way auction at the open price worked lower to close the overnight gap and go range extension down.  Then responsive buyers stepped in and we chopped into the close.  It was an inside day, with the entire daily range being contained in last Friday’s range.

On Tuesday U.S. markets were closed in observation of New Year’s Day.

Heading into today my primary expectation is for buyers to work into the overnight inventory and work a half gap up to 6275.  Sellers step in here and two way trade ensues.

Hypo 2 sellers gap-and-go lower, taking out overnight low 6154 and trading down to 6100 before two way trade ensues.

Hypo 3 stronger buyers trade up to 6300 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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