My goal for February is to think big.  How big?

As big as it takes.

Because the path of growth can only be incremental for so long.  WSS subs, the latest session should be hitting your inbox momentarily.  Be sure to thumb through it and prepare for the week.  That way, when the others have a lingering Super Bowl buzz, you will be poised to yap their chains.

As we head into February, you cannot deny the beautiful volume structure on the Dow Jones Industrial Average.  Price is pressing the lower boundary, and it may crack this time, but if not the overall structure will produce a quick mean revision, see below:

I do not take my presence on Twitter very seriously. Coincidentally, my stream is a source of entertainment. That is not to say every bit of financial commentary presented in the twitter hemisphere is without value, but rather that it takes diligent processing to concentrate down to a pure information extract.

However, I do not filter all the participants, all the time, nor do I filter my tick stream to remove 1-lot “noise”. I want to see as much information as possible, when I want to. Sometimes in all that commotion a theme emerges.

Today’s theme was the most confidently bearish I have ever seen. My stream was super confident on the bear side. People who never tweet their positions were touting their TZA and puts on this or that. More than ever, and I do a lot of twitter, it’s my drug.

AND I SAY GOOD. Flip it over logic has taken me through the month of January and I made money, dammit. It’s been a grind, so what? You want to know a real grind? Spend a summer month on a cement crew, 7-days a week.

Do you know what this weekend is? I have watched two quarters of football this year and even I know it’s the Super Bowl. So screw it, my book went into the weekend long, much longer than where I started the week. I couldn’t care less to gain CLOUT by TOUT-ing some hot new long. They don’t last long enough, so why report on it.
If you want to talk about trading, about how to trade or about performance mentality, we shall. If you want to fly onto my dock and wait for me to catch and throw you a fish, then you’re better off heading to Florida.

THE FISH ARE SCARCE AND I INTEND TO EAT AND FEED MY PEOPLE.

PS – big #FF to my homies on Twitter, you make the week awesome.

Nasdaq futures are lower as we head into cash open on an abnormal 50 point range and normal volume. At 8:30am the GDP data released was below expectations and we saw a brief pop in futures which was ultimately faded. As we come into the opening bell prices are on the low of the globex session.

Yesterday buyers were put on their heels early in the session as price pushed down into the lower edge of a multi week range and managed to turn. Price then took back more than half of the selling on Wednesday to finish the day up near the highs. Overall the week has been seller dominated since the big gap down on Tuesday.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and work up to 4171.50. Here I will be looking for signs of responsive sellers (responsive relative to the opening print, initiative in nature verse yesterday’s close). They will look to target the MCVPOC at 4144.50 where we will churn through lunch.

Hypo 2 is sellers drive off the open push down through MCVPOC 4144.50 down to 4125.75 where we find responsive buyers back up to MCVPOC 4144.50 and churn through lunch.

Hypo 3 is stronger buyers push on the open, take out 4171.50 and target a full gap fill up to 4185.75. If they can sustain price above 4171.50 then look to target overnight high 4208 and stretch target of MCHVN 4233.25.

Hypo 4 is a drive down, take out 4125.75 and target a break of Thursday’s low 4095.75.

Levels:

Emotions are the caveat emptor to mistakes in trading. It is okay to have emotions—they are the passion fuel that drives us through life. The key is astute awareness and childlike curiosity for their nature.

It can be difficult to clear the haze and demonstrate objective judgment, but I find numbers and mathematics help quite a bit. You see, mathematics are the international language of logic. They are cold truth. To ignore them would be at your own peril.

Therefore, when the battle becomes heated, it is my fiduciary duty to lean on the logos of numbers.

Let me share a story with you. Marked on my chart during the Weekly Strategy Session was a certain “naked VPOC” dating back to January 16^th. These areas tend to be revisited. On Monday, when I was presenting auction theory to the After Hours with Option Addict crew my charting computer went BSOD and I had to perform a hard reset. When it came back live my weekend work had been omitted from the charts.

Though I thought I was diligent in marking them back up Monday night, deep into the hours with burning eyeballs, I had failed to note the naked VPOC at 4101.25. It was only through fate, through a query from a learning trader about naked VPOCs that my awareness was brought to this oversight.

You have to take what you get in life. I am eternally grateful for the opportunity to speak to other traders.

Thus when the market was going 0-100 REAL QUICK, and it hit my mark, I was buying. It was my duty, per the code of the SHOMP, and I was merely a vessel of execution.

Logic can be your friend. Logic can help you develop confidence amid the “chaos” and logic can liberate you from suffering.

Just as was speculated when this whole polka started, the fate of our entire market is in the hands of Amazon. Amazon is the most bearish looking momentum chart, and here they are, reporting after market close, as we teeter on the precipice of demise.

False move, real move logic has worked well up to this point. It has been the power move of the year, and it appears to be sticking again today. But the whole methodology depends on Amazon not filling the below volume pocket with dead-bull cream, in my opinion.

We are neutral, so today may go flat again. Don’t go chasing this move. Watch Amazon earnings. Watch GoPro intraday too. Watch solar as well. WATCH NOTHING ELSE, except maybe this clip:

Nasdaq futures printed a balanced session overnight on normal range and volume. After a brief pop late Wednesday evening, price pushed lower and took out Wednesday’s low 4123.25 and found responsive buyers just ahead of the 1/20 low at 4109. Since then price has traded in a quiet 2-way manner. Earnings have sent the share price of BABA lower as well as CELG. COP is trading a bit higher. We have reports out of GOOGL and AMZN after market close. The Initial/Continuing jobless claims data at 8:30am came in a bit better than expected and we saw a bit of buying on the news.

Turning to the charts, sellers are in control on the short term timeframe. Yesterday we printed an outside day after starting the day gap up above Tuesday’s range and trading all the way though it and closing on the lows. Intermediate term is neutral as we continue working through a multi week range.

Just below the overnight low 4111.25 are some interesting price levels dating back to the last swing low. In particular, the naked VPOC at 4101.25 which we left behind when we turned upward. This level will be interesting to observe if sellers step in this AM.

Early on my primary expectation is for an open auction inside Wednesday’s range which gives way to selling. Sellers will look to take out the overnight low 4111.25 and continue down to test the NVPOC at 4101.25 where we find responsive buyers who work back into Friday’s range and up toward the MCVPOC at 4144.50.

Hypo 2 is buyers push early on and stall out near the MCVPOC 4144.25 churn a bit, before initiative sellers step in and work us lower to target overnight low 4111.25 and potentially the NVPOC at 4101.25.

Hypo 3 is an open drive higher, take out the MCVPOC at 4144.50 and continue higher to test the scene of the FOMC breakdown up at about 4172.

Hypo 4 is we drive lower and take out the NVPOC at 4101.25 and tag the MCLVN at 4083.25, if no responsive buying there then continue lower to the CHVN at 4053.75.

I have highlighted the above levels on the following volume profile chart:

Today required intense focus and patience but to the disciplined went the spoils of war. Make no mistake, my book of swings, my card collection, is looking like my Beckett collection, only the beauty is intangible as they sit here worthless.

But that will not stop me from finding someone else a bit more enthusiastic who I can sell some of my collection to for a slightly higher price than I paid.

Facebook is lower afterhours but it would not surprise me to see it trade up tomorrow. We have Alibaba earnings premarket and other factors which may contribute to a bit of good ju ju.

You could be frustrated with the downward price spiral post-FOMC minutes because they did not say much. Or, you can embrace the nature of market behavior and find opportunities. Some of the best opportunities surface when the intensity is high. As far as range trading goes, sellers just laced their Gatorade with crystal meth and charged head first into buyer territory.

They are moving fast, they are high, and now is the time to decide whether these zombie-like creatures will win and transform the streets into tattered ruins or if buyers can hold the line.

This is not the time to panic. Steady your mind. Toss a football with your child or nephew. Learn some new dance steps with your niece. But come to work tomorrow ready to execute your plan.

If you don’t have a plan, its time to work harder. Choose today. If you don’t choose today, then don’t trade tomorrow and choose tomorrow. This is no time to shoot from the hip.