First of all happy Juneteenth lads. We do Juneteenth big here in the city. Not so much your humble narrator Raul, but the community really rallies.
Dear and kind and very humble and strong Raul simply keeps his head down, poking dirt and making plants pop out of it. An observer and a grower.
Oh and happy Father’s Day to those who celebrate.
We’re doing Father’s Day big this year so I must be brief. There is a certain luxury hotel development sister Raul is helping to build and we’re going on a bit of a tour. Then familia style dinner at a nice daigo eatery then I can return to Mothership and die for a few hours before the markets resume lopping -5k off my net worth every 4-to-6 hours.
Some may wonder aloud and silently in bed, “Why does dear and patient Raul simply ride price lower? When he has such clairvoyance and tape reading prowess?”
The fact is I am busy lads. I made my bed and I am not one to abandon a project. That’s the difference between me and these no dang good hipster gardeners. They go in guns blazing year one, putter out year two, pine for volunteers year three and before you know it they’re commies with hideous gardens.
Working the earth is awful and hard especially at a small scale. You need to be stubbornly persistent. It takes two years to activate the land and then things become slightly easier.
Anyhow this is year two and I am absolutely crushing it in the fields. Managed to germinate ma sweet corn in six days through several 90+ degree day scorchers.
Despite heavy use of sunscreen I have taken on a dark olive hue that makes me look like I’m from the old country. My hair is long, ma muscles are solid and my beard is black.
More and more grey lately thanks to prevailing market conditions.
My plan is simple. I will accumulate the things I like, consistently. Call me crazy, but I bought more ethereum last week and I plan to buy more this week too.
Also plan to buy more Big Tech. Why not? It’s the end of the world and these juggernauts will be fine.
I suppose I better go back to working the futures markets soon. The giant pile of cash I sleep on at night grows restless.
Okay for now.
Raul Santos, June 19th 2022
And now the 391st strategy session.
Stocklabs Strategy Session: 06/20/22 – 06/24/22
I. Executive Summary
Raul’s bias score 2.43, medium bear. Expect sellers to remain in control early in the week. Then watch for remarks from Fed chairman Powell to potentially pivot the tape Wednesday or Thursday.
U.S. markets will be closed Monday, June 20th in observation of Juneteenth
II. RECAP OF THE ACTION
Gap down into the week then heavy selling through Monday. Rally Wednesday post-FOMC 75 basis point rate hike. Reversal back to the lows Thursday. Choppy and balanced Friday.
The last week performance of each major index is shown below:
Third week of complete risk off rotation away from the equity complex.
For the week, the performance of each sector can be seen below:
Concentrated Money Flows:
Four weeks back bulls regained control of money flows in a meaningful way. Two week that control was reclaimed by sellers.
Last week’s ledger was dominated by sellers.
Here are this week’s results:
III. Stocklabs ACADEMY
No man’s land
Last week we had a clear reading for low. Heading into this holiday-shortened week the picture is murky. All three contextual charts are in discovery down mode but could certainly spend a few days rallying without changing the downward picture.
IndexModel is neutral.
All the signals firing out of Stocklabs on June 10th basically have 50/50 odds.
Seems like the type of week to observe from a distance, take any directional profits and wait for the signals to realign.
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?
Expect sellers to remain in control early in the week. Then watch for remarks from Fed chairman Powell to potentially pivot the tape Wednesday or Thursday.
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]:
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. Readers are encouraged to apply these techniques to all markets.
Transports are channeling lower.
Semiconductors are channeling lower and there is a potential magnet back at the open gap left behind on 11/04/2019.
Ether probed the abyss. Saw additional weakness Saturday. Discovery down until we see a major up day.
V. INDEX MODEL
Bias model is back to neutral.
It was Bunker Buster last report. The fourth in recent history.
We were rose colored sunglasses bearish two reports back after being extreme Rose Colored Sunglasses neutral three weeks back after four consecutive weeks being neutral. We went Bunker Buster eight weeks back after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.
We’ve had four Bunker Busters in recent history, last week, eight weeks ago, twenty-one reports back and a third twenty-nine reports back.
Here is the current spread:
VI. QUOTE OF THE WEEK:
“We’re never gonna survive unless we go a little crazy.” – Seal
Trade simple, persevere
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