It is with humility, and three days without hot food that the good scientists of iBankCoin labs took to the satellites to connect with mother ship and prepare a strategy session for the end of June.
Last week we came out with a bearish call. Come Monday, before we even had a chance to take action, the market made it evident that selling was a fool’s errand. A pro gap up and opening drive higher nullified the Sunday reading.
Sometimes you have to improvise if you intend to survive.
Therefore, it comes as somewhat of a relif that the systems generated a neutral reading heading into next week. Neutral, barely, by 0.02. Still, the model is neutral.
We are headed into month end, and into a weekend most 9-5 corporate slaves will use to celebrate AMERICA earnings its independence. Then they will independently imprison themselves back to their low-purpose job. Summers were intended for man to fart around, following whichever whim pull at him most. Do not let anyone tell you otherwise.
Models are neutral, the heat wave has passed, we are blind headed into July.
Exodus members, the 137th Edition of Strategy Session is live, go check it out!
NASDAQ futures are heading into Friday flat after an overnight session featuring normal range and volume. Price held Thursday’s range overnight in a non-eventful extended trading session.
The economic calendar is super light—manufacturing/service/composite PMI data is out at 9:45am then new home sales at 10am.
Get in your car and drive to a national forest
Yesterday we printed a normal variation up. Day began with a slight gap down that was sold into. After poking the naked volume point-of-control at 5771 the buyers again reasserted their dominance, responding to the discounted prices with vigor. This led to markets rallying a bit but stalling ahead of the week’s high-mark, which was established around 2am on Thursday. Sellers prattled onto the tape late in the day.
Heading into Friday my primary expectation is for sellers to work down through overnight low 5775 and continue lower, down to 5757.75 before two way trade ensues.
Hypo 2 buyers press up through overnight high 5800.50 and probe the weekly high 5814.50. Look for sellers up at 5823 and two way trade to ensue.
Hypo 3 stronger sellers manage to sustain trade below 5755.50 setting up a move to close the open gap at 5733.50.
Are you climate change deniers happy? It was fine when paranoid Americans cast doubt upon the 4th estate because by-and-large, major media outlets shill their toxic ideologies to teevee watchers. But then you turned your pitch forks on scientists, and that is when you made a fatal mistake. Our best DNA editing research is moving offshore. Intella Therapeutics announced Monday that China’s State Intellectual Property Office plans to grant the company a patent covering the CRISPR/Cas9 single-guide gene editing methods and compositions.
Intella [ticker: $NTLA] can now operate in China, free to explore the powers of DNA editing for the explicit benefit of their people.
As you might imagine, the prospect of taking CRISPR research out from beneath the thumb of a collectively ignorant populace and their authoritarian leader is creating quite a bit of excitement in this small corner of the biotech industry. Your gods cannot stops shares of DNA editing companies like SGMO, NTLA, and EDIT from racing higher*.
*writer’s note: I am long SGMO, NTLA, and EDIT
So like most breakthroughs in science, the crowd is being proven wrong. Natural forces are prevailing.
In other CRISPR news, Sangamo (which sounds like a nice Italian name) successfully raised $72.5 million dollars on Wednesday via a secondary stock offering. This secondary was received surprisingly well by investors. Just over 24 hours after issuing 10,000,000 shares at a price of $7.25 the stock is trading over $9. This offering speaks to the overall health of equity markets. It also tells investors that $SGMO has their affairs in order because successfully completing a secondary is a shit-ton of work, especially for a small outfit like Sangamo.
So there you have it. Despite the primates in congress and their apish behavior, science is prevailing. DNA editing research shall press onward…in China.
NASDAQ futures are coming into Thursday flat after an overnight session featuring normal range and volume. Price worked higher, stalling out and finding responsive sellers just ahead of 5823.
5823 is the price that marks where the 0.68% retracement is of the selling that began June 9th and concluded June 12th. It is the ‘golden ratio’ discovered by Italian mathematician and all-around-good-guy Leonardo Pisano Bigollo aka Fibonacci.
Since nearly tagging the level, the NASDAQ sold off for 34 points then found a bid stabilized into two-way trade just below 5800.
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The most important thing to keep in mind regarding this ratio is that is provides a pivot. Should sellers fail to maintain prices below 5823, then the June hissy fit was another short-lived dip. If instead sellers defend the zone, we may be in for another leg lower.
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At 8:30am Initial/Continuing jobless claims data came out below expectations.
Also on the economic calendar today we have Housing Price Index at 9am, Leading Indicators at 10am, and a 30-year TIPS auction at 1pm.
Yesterday we printed a double distribution trend up. The day began with a small gap up—a small gap up sellers should have easily closed, but they didn’t. This sent price racing higher. After a lunchtime lull (common place in the summertime and reason in-itself to avoid day trading most of the day) we saw a second leg higher to end the day, putting us at fresh weekly highs.
Heading into today my primary expectation is for sellers to press lower, down through overnight low 5780.75 setting up a move to target 5757.25 before two way trade ensues.
Hypo 2 buyers work up through overnight high 5814.50 and probe then Fibonacci level at 5823. They find sellers and two way trade ensues.
Hypo 3 stronger sellers close the gap down to 5733.50 then continue lower, down to 5712.50 before two way trade.
Hypo 4 pole climb. Buyers sustain trade above the fib level at 5823 triggering a fast move higher to 5876.50 before two way trade ensues.
NASDAQ futures are coming into Wednesday gap up after an overnight session featuring elevated range and volume. Price worked lower overnight, reversing much of the Monday morning gap higher. Then buyers aggressively defended an attempt back into last Friday’s range, sending the index spiraling higher. At 7am MBA mortgage applications came out lower than last week.
Also on the docket today we have crude oil inventories at 10:30am. The energy markets have been volatile alongside the drought-stricken middle east, so investors are likely to pay closer attention to the report.
Yesterday we printed a neutral extreme down. Price briefly went range extension up Tuesday morning after beginning the day with a two-way auction. Then, the entire range was reversed, pushing the index neutral. From then onward, and despite some attempts higher from the buyers, the daily midpoint was a wall. We closed near session low, earning the neutral extreme designation.
Heading into today my primary expectation is for sellers to press into the overnight inventory and close the gap down to 5733.50. However, an attempt down through Tuesday low 5729 is rejected by buyers, sending up up through overnight high 5741.50. Look for sellers up at 5744.50 and two way trade to ensue.
Hypo 2 buyers work up through overnight high 5741.50 and sustain trade above 5744.50 setting up a move to target 5758.75 before two way trade ensues.
Hypo 3 strong sellers press down through overnight low 5699 and target the weekly gap left open down at 5684.50 before two way trade ensues.
NASDAQ futures are coming into Tuesday flat after an overnight session featuring normal range and volume. Price worked higher overnight, briefly poking above the Monday high before settling into two-way trade.
The economic calendar is light all week. Today is no exception. The U.S. Treasury is auctioning off 52-week and 4-week bills at 11:30am. There are no other economic events. Fed’s Robert Kaplan will speak at 3pm, but investors are likely to ignore him.
Yesterday we printed a double distribution trend up. The week began with a strong pro gap and buyers drove higher off the open. Buyers then became initiative later in the day, springing higher only to be knocked back by sellers twice.
Heading into today my primary expectation is for a move higher, up to 5800 before two way trade ensues.
Hypo 2 sellers press down to 5750 before two way trade.
Hypo 3 stronger sellers liquidate down to 5717.25 before two way trade ensues.
Hypo 4 strong buyers sustain trade above 5800, triggering a pole climb up to 5822.75.
Salutations from the trading floors at iBankCoin laboratory!
Despite the latest readings inside Exodus Strategy Session indicating bearish conditions for the current week, the work horse of our operation, RAUL, improvised early Monday morning. He determined that, given the strong gap and drive higher, the best course of action was to delay any short selling, selling of current holdings, or hedging.
Until sellers present themselves no selling of any kind will occur.
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Sometimes a quantitative formula cannot see what the human can. Think about your GPS, for example. It may think the best route home is the highway. The GPS may know a ho chi minh trail exists that offers a similar ETA, but it defers to the major roadways. What it has not accounted for is the pop-up thunderstorm that came through 20 minutes before rush hour, and how soon its maps will be filled with volume delays. Google maps cannot see these nuances.
Nuances are how humans continue to confidently lord over the robots.
In trading it’s called context. And context is the difference between a competent trader and someone who thrives.
When more experienced market practitioners used to talk about context back when I was a fucking n00b it used to irritate me very much. They sucked at describing it to me. They could not present context in a way where I could mimic them. In hindsight, and slowly, it is starting to make sense to me why they struggled to make context into a consumable lesson.
I did my best to codify context into something actionable. It is called switchboard. It is nothing more than an excel spreadsheet that has several switches for the various ‘contexts’ I’ve come to value over the years. It looks like this:
It would be a lie if I told you all key context is contained in switchboard. Context also comes in the form of news flow, geopolitics, seasonality, sentiment, and other intangibles.
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The kind scientists at iBC labs are not thrilled to see our trading element ignore our weekly findings, but RAUL has presented us enough information to enact a manual override. It is our duty to ensure he maintains protocol during his improvisational performance. Should the mother algo inside Exodus generate a Hybrid Chg % reading of greater absolute value than Monday, a short bias must be reengaged by any means necessary. Historically, we have been forced to use draconian measures to contain the spirit animal inside RAUL.
Until further notice, the bearish bias issued Sunday afternoon is not live. We repeat, not live. We are in a no-go-short zone.
NASDAQ futures are coming into the week gap pro gap up after an overnight session featuring elevated volume and range. Price worked higher during all of extended trade, trading up into last Wednesday’s range.
The economic calendar is extremely light this week and today is no exception. The only scheduled events today are T-bill auctions, 3- and 6-month auctions at 11:30am.
Last week we traded sideways, more-or-less. The week began with a hard sell then we drifted. During this time the Dow Jones diverged higher. Below is the performance of each major index last week:
On Friday, the NASDAQ printed a normal variation down. Price opened nearly flat, just a slight gap down which buyers were unable to close. Instead we drove lower early on. Sellers ultimately could not take out the Thursday low and we instead settled into two-way trade.
At the open the /NQU7 (September ’17 contract, current front-month) printed an open-test-drive up. Price traded up the the Exodus Strategy Session’s weekly ATR band before churning sideways for a bit.
Heading into today my primary expectation is for sellers to defend the measured move level at 5725.75 sending us lower to test last Friday’s high 5707.50. Buyers defend ahead of 5700 and two way trade ensues.
Hypo 2 buyers sustain above 5752.75 setting up a move to target 5775.25 before two way trade ensues.
Hypo 3 pole climb. Price sustains above 5777 setting up a trend up to 5876 before two way trade ensues.
Greetings from the boiling hot surface of planet earth!
The kind scientists at iBankCoin labs have been toiling away inside the machine that is Exodus, checking and re-checking the learning computer’s readings, ensuring the readings are in fact accurate. They are. And all signs point to bearish action in the upcoming week.
If you recall, a short bias was issued heading into the first week in June. This was a bad call. However, and let it be known across the fin-dork interwebs, that we take our signals. All of them.
Americans are barrelling towards solstice drunk on sun exposure, exhausted from one-too-many graduation ceremonies, and wholly unprepared for the furious impeachment measures being enacted by the deep state to unseat our authoritarian leader.
Enjoy your celebrations today, dads. For next week we will do battle with the most evil force in nature: sellers.
Distinguished Exodus members, the 136th Edition of Strategy Session is live. Go see all the other reasons why we are bearish heading into summer solstice.
NASDAQ futures are coming into Friday flat after an overnight session featuring normal range and volume. Price worked up through the Thursday high, briefly overnight before settling into balanced trade. At 8:30am Housing Starts and Building Permits data were below expectations.
Also on the agenda today we have the June preliminary reading of Confidence out of the University of Michigan. There are no other major economic events.
Yesterday we printed a normal variation up. The day began with a gap down and sellers working down through the Monday low. Just a touch below Monday’s low buyers stepped in. We then spent the rest of the day trading higher. As a result, it appears we have failed auctions on both sides of the tape now.
Heading into today my primary expectation is for buyers to work up through overnight high 5720 and close the Wednesday gap up at 5733 before two way trade ensues.
Hypo 2 stronger buyers press up to 5767.75 before two way trade ensues.
Hypo 3 sellers press down through overnight low 5695.75 and buyers are found just below at 5681.50.
Hypo 4 stronger sellers send trade down to 5656.50 before two way trade ensues.
*Note: all levels are in reference to the June contract despite all active trading moving to the September contract.