NASDAQ traders *edit:undo* Tuesday’s gains overnight // here is Wednesday trading plan

NASDAQ futures are coming into Wednesday gap down about -150 after an overnight session featuring extreme range and volume. Price fell down through the Tuesday midpoint around 9:30pm and then consolidated until about 3am. The 3am hour has been dominated by sellers the last month-or-so. Around 3am sellers pressed down through the Tuesday low and down into the lower quadrant of Monday’s range. Then around 6am New York bidders stabilized the selling. Then around 7am the auction reversed higher. At 8:15am adp employment forecast came out well above expectations, and as we approach cash open price is hovering back inside the lower quadrant of Tuesday’s range.

Also on the economic calendar today we have crude oil inventories at 10:30am.

Yesterday we printed a double distribution trend up. The day began with a  slight gap up in range. Buyers drove higher shortly after an open test. Sellers made an attempt shortly after to gap fill but failed and then a steady buying/accumulation campaign took hold. Said buying continued until about 11:30am. Then after several hours of balance/consolidation buyers made another push higher but stalled around 3:30pm before closing the weekend gap. Instead we saw quick selling into the close. We ended the session above the mid.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 14,660. From here buyers continue higher, trading up through overnight high 14,674.75. Look for sellers up at 14,700 and for two way trade to ensue.

Hypo 2 sellers reject out of Tuesday low 14,497.50 early on setting up a move down through overnight low 14,422.50. Look for buyers down at 14,388.25 and for two way trade to ensue.

Hypo 3 full-on liquidation lower. Sellers take out Monday low 14,367.75 early on setting up a gap fill down to 14,324. Stretch targets 14,300 and then 14,272.25.

Levels:

Volume profiles, gaps and measured moves:

Comments »

NASDAQ futures are coming into the first Tuesday in October with a slight gap up after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing along the bottom-side of Monday’s midpoint. As we approach cash open price is hovering about -50 points below the Monday mid.

On the economic calendar today we have ism services index at 10am followed by 52-week T-bill auction at 11:30am.

Yesterday we printed a double distribution trend down. The day began with a slight gap down in range. Sellers drove into the open, steadily driving lower clean through to 11am New York, printing a -300 point liquidation along the way. Then we spent the rest of the session chopping along the lower quadrant.

Heading into today my primary expectation is for buyers to press up through overnight high 14,549.50 before two way trade ensues.

Hypo 2 stronger buyers reverse the Monday selling, filling the weekend gap up to 14,766.

Hypo 3 continued liquidation. Sellers take out overnight low 14,410 setting up a test down through Monday low 14,367.75. This sets up a gap fill down to 14,324 (the 06/24 open gap).

Levels:

Volume profiles, gaps and measured moves:

Comments »

NASDAQ futures are coming into the week with a slight gap down after an overnight session featuring extreme range and volume. Price briefly exceeded the Friday high Sunday evening before beginning a steady rotation lower. Said rotation worked price down through the Friday midpoint for a bit. Since then price has recovered the mid and as we approach cash open price is hovering about 50 points above it.

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

Last week featured balance/consolidation Monday. Then there was a pro gap down and drive lower Tuesday. That selling continued through early Friday. Then mid-morning on Friday a sharp reversal higher took hold and rallied prices into the weekend. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a normal variation up. The day began with The day began with a slight gap up inside range. After a brief open two-way auction sellers stepped in and drove down through the Thursday low, trading down into levels unseen since July 20th before buyers stepped in and reversed the auction. The rest of the day was spent steadily campaigning higher. There was a brief pause above the midpoint before the accumulation continued through the afternoon, eventually tagging the Thursday volume point of control.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 14,766. From here buyers continue up through overnight high 14,835. Look for sellers up at 14,865.50 and for two way trade to ensue.

Hypo 2 sellers take out overnight low 14,633.50 and tag 14,600.

Hypo 3 stronger sellers probe the lows and tag 14,500.

Levels:

Volume profiles, gaps and measured moves:

Comments »

Lads it’s real overcast here in the land of lakes and I went to a soccer game this morning. This resulted in my being forced to complete Sunday research during my low cognitive hours and boy has it been a grind.

But the research is the research and without it I cannot trade. Those are the rules. I should know. I wrote them. For me.

Great.

Anyhow this whole scary move lower we experienced in the markets, it started with crypto and if crypto has anything to say about it it is going to end with crypto.

Equities, being risk assets just like crypto, are lagging and following moves in the major internet tokens, namely ether.

That stated, it has been a strong weekend for the crypto currency markets and I expect that trend to carry into equities in the upcoming week.

I have attached my ego to the Twitter trade, in part due to some real banker looking Goldman Sachs banker slapping a sell rating on Twitter after I sized up.

I don’t like bankers. I used to be a corporate accountant. I’ve seen many a banker up close and they just make me want to make to kill.

The reality is I have no say in the outcome of this position. My life is in Jacked Dorsey’s beautiful hands.

Earnings are set for October the 26th, after the bell of course. This is when my fate shall be decided.

My price target is $109.

Okay. I am really not feeling the juices flowing so I’m gonna go eat some groceries and maybe pet some dogs.

Okay for now.

Raul Santos, October 3rd 2021

And now the 358th edition of Strategy Session. Enjoy.

---

Stocklabs Strategy Session: 10/04/21 – 10/08/21

I. Executive Summary

Raul’s bias score 2.95, neutral. Buyers steadily campaign price higher throughout the week. Then look for Friday morning’s nonfarm payroll data to dictate direction into the weekend.

II. RECAP OF THE ACTION

Balance/consolidation Monday. Pro gap down and drive lower Tuesday. Continued Selling through early Friday, then a sharp reversal higher into the weekend.

The last week performance of each major index is shown below:

Rotational Report:

Fairly risk off across the board. Energy continues to trade independent of other sectors. Tech and Healthcare leading to the downside is not bullish.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Five weeks back we had a major bullish skew and that really hasn’t been negated yet. Last week’s ledger is slightly skewed to the negative side.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Just a couple of bullish cycles now

Indexmodel is neutral and Stocklabs has two bullish cycles heading into next week. New month/quarter paired with Stocklabs backing. I will be leaning bullish all week.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Buyers steadily campaign price higher throughout the week. Then look for Friday morning’s nonfarm payroll data to dictate direction into the weekend.

Bias Book:

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]:

Semiconductors compressing and rallying

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, the more order flow energy to push the discovery phase.

We are monitoring two instruments, the Nasdaq Transportation Index and the PHLX Semiconductor Index.

Transports are still holding range.

See below:

Semiconductors broke their rising wedge last week and now appear to be in a balance formation.

V. INDEX MODEL

Bias model is back to neutral after signaling Rose Colored Sunglasses [RCS] bearish last week. It was neutral the prior two weeks after being Rose Colored Sunglasses [RCS] bearish four weeks back after being neutral five reports back and Rose Colored Sunglasses bearish for the two consecutive weeks prior to that.

We had a Bunker Buster thirty one weeks ago.

Here is the current spread:

VI. Six Month Hybrid Overbought

On Thursday, September 23rd  Stocklabs went overbought on the 6-month algorithm. This is a bullish cycle that runs until Thursday, October 7^th end-of-day. Here is the performance of each major index so far:

VII. Twelve Month Hybrid Oversold

On Tuesday, September 28th Stocklabs went hybrid oversold on the 12-month algorithm. This is a bullish cycle that runs through Tuesday, October 12th end-of-day. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“I am creating beauty out of scary things.” – Grimes

Trade simple, trade beautifully

Comments »

NASDAQ futures are coming into the final day of September up about +70 after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing inside the Wednesday range. At 8:30am GDP data came out better than expected and jobless claims were higher than expected. As we approach cash open price is hovering along the Wednesday midpoint.

Also on the economic calendar today we have Chicago PMI at 9:45am followed by 4- and 8-week T-bill auctions at 11:30am.

Yesterday we printed a normal variation down. The day began with a slight gap up in range. After a brief open auction buyers drove higher, pressing up out of the consolidation zone from Tuesday before being met by responsive sellers who defended their conviction zone. This led to some chop along the midpoint before sellers pressed us into range extension down into New York lunch.

Sellers probed the lows for a bit before a sharp responsive bid shot price up through the mid. Then late in the session sellers reclaimed the mid and we closed out the session in the lower quadrant.

Heading into today my primary expectation is for buyers to press up through overnight high 14,883.50 setting up a tag of 14,900 before two way trade ensues.

Hypo 2 stronger buyers rally to 15,000 before two way trade ensues.

Hypo 3 sellers work into the overnight inventory and close the gap down to 14,774 then continue lower, taking out overnight low 14,754.75 on their way to tagging 14,700.

Levels:

Volume profiles, gaps and measured moves:

Comments »

NASDAQ futures are coming into Wednesday with a slight gap up after an overnight session featuring extreme range and volume. Price was balanced overnight, mostly balancing along the lower half of Tuesday’s range. After briefly probing above the Tuesday mid around 3am, sellers reclaimed the mid around 7am and as we approach cash open price is hovering about -45 points below that mid.

On the economic calendar today we have pending home sales at 10am, crude oil inventories at 10:30am and Fed Chairman Powell set to speak at 11;45am.

Yesterday we printed a double distribution trend down. The day began with a gap down below the prior three sessions’ ranges. After a brief test higher, sellers drove down into the open, sending price on a discovery down into levels unseen since July 21st. The downward auction sort of came to an end around New York lunch, sort of. Three bounce attempts were faded back down to the lows and we ended the day on the lows.

Heading into today my primary expectation is for buyers to press up through overnight high 14,926 setting up a move to 15,000 before chop resumes.

Hypo 2 sellers press into the overnight inventory and close the gap down to 14,758.25. Sellers continue lower, taking out overnight low 14,749 on their way to tagging 14,705.

Hypo 3 stronger sellers liquidate down to 14,600.

Levels:

Volume profiles, gaps and measured moves:

Comments »

NASDAQ futures are coming into the final Tuesday of September down a quick -225 after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing along the Monday midpoint until about 2:45am New York when sellers stepped in and began a steady selling campaign that saw price down into last Monday’s lower quadrant. As we approach cash open price is hovering just below last Tuesday’s low, near last Monday’s midpoint.

On the economic calendar today we have international trade in goods (advance) at 8:30am followed by consumer confidence at 10am and a 7-year note auction at 1pm.

Yesterday we printed a normal variation up. The day began with a gap down just below last Friday’s low. Sellers rejected an attempt back into Friday range during an open-two-way auction setting up a fast move lower to tag the 15,00 century mark. The auction turned here, and we spent the rest of the morning campaigning higher, eventually pushing to a range extension up before New York lunch. Then price fell back to the mid, sort of walked all over it for a few hours before rallying into the close, effectively tagging the Friday naked volume point of control. Price faded off the highs into the close.

Heading into today my primary expectation is for buyers to work into the overnight inventory and tag 15,100. Some battle here before buyers continue higher to close the overnight gap 15,185.50. Look for sellers up at 15,200 and for two way trade to ensue.

Hypo 2 sellers gap-and-go lower, trading down to 14,900 before two way trade ensues.

Hypo 3 stronger seller press down through last week’s low print 14,807 triggering a liquidation down to 14,705.

Levels:

Volume profiles, gaps and measured moves:

Comments »

NASDAQ futures are coming into the final week of September gap down about -120 after an overnight session featuring extreme range and volume. Price was stable Sunday evening, steadily rising up through last week’s high and holding these levels until about 3:30am. From 3:30am price has gone unidirectionally lower, effectively erasing the Sunday rally and more. At 8:30am durable goods orders came out stronger than expected (in line ex-auto). As we approach cash open price is hovering along the Friday low.

Also on the economic calendar today we have 6-month T-bills and 2-year notes for auction at 11:30am followed by 3-month bills and 5-year notes at 1pm.

Last week featured a major gap down Monday across the board. The rest of the week saw price steadily claw back the weekend losses and the week concluded on a high note, with price at the weekly highs.

The last week performance of each major index is shown below:

On Friday the NASDAQ printed a normal variation up. The day began with a gap down in range. There was an open two-way auction and then a tight, choppy range all morning. Then halfway through the New York lunch hour buyers pressed into a range extension up and began to campaign for the gap fill. They met a bit of resistance ahead of the gap around 1:45pm, then after a shallow pullback resumed their campaign, effectively closing the gap and continuing higher to tag the Thursday value point-of-control [VPOC].

Of note. The Friday VPOC never shifted off the lower distribution, suggesting a lack of participating on the late-Friday upside move.

Heading into today my primary expectation is for sellers to press down to 15,115-15,100 before two way trade ensues.

Hypo 2 stronger sellers tag the 15,000 century mark before two way trade ensues.

Hypo 3 buyers work into the overnight inventory, closing the overnight gap 15,316.50 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

Comments »

First off shout-out to all the hard working lads doing their best to clean up the damage caused by mother nature these last few weeks. Lots of water been falling from the sky. Mamma mia.

Next a quick note on the metaverse. These heckin’ NFT speculators are some of the most deranged gamblers I’ve met to date. How, in their minds, they expect to ‘flip’ these jpegs in a matter of days. The spreads on these things are as wide as the soo locks and not nearly as liquid as, the…soo locks.  Years. Think in years and choose the jpegs you want to stare at, for years, accordingly.

Moving on.

I’ve held the bag on Twitter since IPO. You hear me? Almost a decade. I still have shares that I bought in late 20’o’13 for about the same price they’re trading at today. I’ve been buying more and more Twitter along the way.

I live like a pauper.

Diamond hands.

Get the fuck outta here.

I’m stupid.

But I’ve always been addicted to Twitter. Last week they settled an old dispute dating back to the legacy executive team. Folks I’d nearly forgotten about old Dicky Costello. What sort of a name is that? Why did I invest in someone named after a penis and an Elvis impersonator?

Do you see how stupid I am?

And yet you read my diary. Hopefully for your own benefit. I like to think there’s some wisdom in these entries. Or at least affordable entertainment.

$810 million dollars. That’s how much the Twitter settlement was for.

A few days prior that jack-off Goldman Sachs banker downgraded Twitter to sell with a piker mother fucking price target of $60 when it was trading at like $63 like bitch? What kind of soft-handed tomfoolery is that?

We faded it.

Then the $810 million dollar settlement news hit. Oh and the news wires really played it up that morning. Big numbers are good for clicks. But the news man doesn’t understand that it was a fiat number and we’re transitioning away from a time when fiat number matters. What matters today is attention and keeping up with the internet.

JACKED DORSEY. Now that’s a name worth investing in.

The all mighty internet. Undefeated it is.

So Twitter rallied despite a cycle of negative news. So maybe my decade old bag of Twitter shares might return some meaningful gains soon.

We don’t know.

Do I deserve gains? I deserve nothing. I deserve to work while I can and then accept when I cannot.

Right now my mind is sharp, muscles strong and my fortitude is steeled.

***One last note***

We’re coming into the week with our signals crossed. IndexModel is bearish. Stocklabs is bullish. Too messy for me to press my edge aggressively. Trading will be light all week.

Month-end is all messy too. All ending on a Thursday. That’s not a good look. I like months to end on Fridays or Sundays like an american dammit. They’re not even releasing nonfarm payroll data Friday. Like they normally do on the first Friday of a month. And you can be sure OPEX will sneak up on us all willy nilly.

So we have a real mess on our hands, data-wise.

At least we’ll put this retched month in the books and press headlong into spooky season.

Okay for now.

Raul Santos, September 26th 2021

And now for the 357th edition of Strategy Session. Enjoy

---

Stocklabs Strategy Session: 09/27/21 – 10/01/21

I. Executive Summary

Raul’s bias score 3.30, medium bull*. Sellers pressure the tape most of the week. Then look for Thursday morning GDP and jobless claims data to pivot the tape higher into month-end.

*Rose colored sunglasses [RCS] bearish bias triggered, see Section V

II. RECAP OF THE ACTION

Major gap down Monday across the board. The rest of the week saw price steadily claw back the weekend losses and the week concluded with price at the weekly highs.

The last week performance of each major index is shown below:

Rotational Report:

Board sector strength though leadership from the Financials is not ideal. Energy continues to trade independently from the overall market. Utilities lagged along with Staples.

slightly bullish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows skewed slightly positive though neither side of the ledger is populated with important industry groups. Four weeks back we had a major positive skew that has not been out done yet.

slightly bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Signals crossed

My edge is diminished heading into month-end. Stocklabs kicked off a bullish overbought cycle Thursday but IndexModel is flagging Rose Colored Sunglasses bearish on the upcoming week. When the systems I use to generate a directional bias cross I do not carry the necessary conviction to trade with full size. Or the conviction to press directional bets like I need to to be profitable.

Therefore I will still be around this week but trading will be light.

I will look for open gaps inside the prior day’s range to fill and will scalp price levels from the morning trading reports.

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?

Weekly forecast:

Sellers pressure the tape most of the week. Then look for Thursday morning GDP and jobless claims data to pivot the tape higher into month-end.

Bias Book:

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]:

Semiconductors compressing and rallying

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, the more order flow energy to push the discovery phase.

We are monitoring two instruments, the Nasdaq Transportation Index and the PHLX Semiconductor Index.

Transports still holding range.

See below:

Semiconductors are sort of forming a rising wedge as price continues to hold record highs. Historically this type of chart pattern eventually resolves with a strong blow-off rally to the upside. For now, as we can see, discovery up continues.

V. INDEX MODEL

Bias model is signaling Rose Colored Sunglasses [RCS] bearish. It was neutral the prior two weeks after being Rose Colored Sunglasses [RCS] bearish three weeks back after being neutral four reports back and Rose Colored Sunglasses bearish for the two consecutive weeks prior to that.

We had a Bunker Buster thirty weeks ago.

RCS calls for sellers to work prices lower all week. There has been an interesting cluster of bearish signals coming out of the index model lately. Definitely grounds for being cautious.

Here is the current spread:

VI. Twelve Month Technical Oversold

On Friday, September 10^th Stocklabs went technical oversold on the 12-month algorithm. This signal has bearish statistics. The cycle ran through Friday, September 24^th end of day. Here is the final performance of each major index during the cycle:

VII. Six Month Hybrid Overbought

On Thursday, September 23rd  Stocklabs went overbought on the 6-month algorithm. This is a bullish cycle that runs until Thursday, October 7^th end-of-day. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“Art depends on luck and talent.” – Francis Ford Coppola

Trade simple, do the work

Comments »

NASDAQ futures are coming into the final Friday in September down about -115 after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing along the upper half of Thursday’s range until about 3am New York when a steady selling campaign began. Said selling continues, and as we approach opening bell price is hovering along the Thursday low.

On the economic calendar today we have new home sales along with Powell speaking at 10am.

Yesterday we printed a normal variation up. The day began with a gap up in range and after a brief open two-way auction buyers stepped in and drove higher, pressing up through the 15,300 century mark ahead of lunch and then price consolidated through lunch before making a second push higher in the afternoon. The second push made a new high but sort of fizzled off the highs into the close.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up at 15,309 before two way trade ensues.

Hypo 2 sellers gap-and-go lower, taking out 15,150 early on and sustaining trade below to set up a move down to 15,100.

Hypo 3 stronger sellers trade down to 15,004.

Levels:

Volume profiles, gaps and measured moves:

Comments »