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I turn dials and fiddle with knobs to hone in on harmonic rotations

Sloppy setup into month-end

Greetings and salutations dear readers of the humble Raul blog [hRb]. Some kind of pump last week, eh? Finally. Emm hmm.

Reckon that was the finest pump all year.

Anyhow last week’s pump is the past and while it is the recent past it is still the past and whilst we will consider it in our analysis this week what is done is done okay? And that’s fine.

I am steadily working to clear up my mind after about a year of NFT shenanigans, aggressive urban land grabs and no dang good imbibing.

I keep wondering if low-of-year is in. That’s how screwed up my mind is like, I always think the worst is behind and better days ahead. It’s delusional maybe, defiant optimisim more likely.

Way too many people around me think we’re on the brink of total chaos and that that’s a bad thing. That the United Steaks is about to shatter into a thousand pieces and the dang Chinese are going to launch a military invasion because Mancy wants to visit Taiwan. Or the oceans gonna crash into Miami or the food is poison or the city is ruined…on and on fear. Seems irrational but what do I know?

I’m just a humble speculator turned hobo gardener who really needs to get back to work extracting fiat from the global financial complex.

After having my teeth and cock kicked about for the first half of the year I’ve managed to claim some victories in July.

Now the month is coming to an end and not without a heavy docket of economic data. We have the FOMC rate hike on Wednesday. The gambling halls in Chicago are placing 80% odds of a 75 basis point hike.

We have our benevolent Big Tech overlords due to report earnings—Microsoft, Alphabet, Meta, Apple and Amazon.

We also have the White House teasing some executive orders due to hit this week.

Elon of course got out in front of all this noise, with his little ai/robot/energy company, TESLA, reporting some hecking sweet numbers, sending prices of his shares higher. Thanks Elon.

I dunno. The model is bearish. Stocklabs is bullish. When you put all the data from the Strategy Session on a ledger the bulls have more going for them than the bears.

Maybe low-of-year is in.

Again. We don’t know.

We do know that there are goblins all across the interwebs and streets who want nothing more than to put me, you and anyone else below them in the great American fight for glory.

Which is fine.

My muscles follow lines that make exotic sports cars blush. Ma hair is long and I’m growing a nice Jacked Dorsey gotee. The dang F-250 shitkicker diesel is fueled up and ready to steamroll any combative drivers. My corn and cock stand high. My demeanor is calm and regal.

This is difficult set of circumstances to beat.

So maybe it is time to get back to work. Boy do I have some studies to update first. But maybe it is time to do all of this.

Maybe low-of-year is in.

We don’t know.

Raul Santos, July 24th 2022

And now the 394th edition of Strategy Session.


Stocklabs Strategy Session: 07/25/22 – 07/29/22

I. Executive Summary

Raul’s bias score 3.15, neutral*. Expecting some upward price action early in the week before sellers step in (perhaps after the FOMC decision) and work price lower by week’s end.

Watch for third reaction to the FOMC decision to dictate direction into the second half of the week.

**Most Big Tech names are set to report earnings this week, from Tuesday-Thursday. These major NASDAQ components could steer the overall market.**

* Rose Colored Sunglasses [RCS] bearish bias triggered, see Section V.

II. RECAP OF THE ACTION

Big selloff Monday around opening bell before buyers stepped in early Tuesday and began campaigning higher. Then price rallied through most of the week, until a spike higher around opening bell Friday sharply reversed. Most of Friday was spent working lower until a bid stepped in late in the afternoon.

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

Rotational Report:

Last week’s rotations were strongly in favor of buyers, with key Tech and Discretionary sectors putting in a strong performance. Meanwhile risk averse sectors like Utilities and Staples lagged.

bullish

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

Concentrated Money Flows:

After six or so weeks of aggressive battle between buy and sell flows, There were two weeks of mundane money flows.

Then last week buyers skewed the flows heavily to the bullish side of the ledger.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Signals crossed into a busy week

Last few weeks we’ve had a clear picture from the data in this report. Not the case this week. We have a bullish overbought cycle in play from Stocklabs (triggered Tueday, 7/19). We also have a bearish Rose Colored Sunglasses from IndexModel.

Sector rotations and money flows were bullish. Meanwhile our key contextual indices are nearing resistance in established long-term discovery down phases.

All this with Big Tech set to report earnings throughout the week. The White House teasing some green energy news. And the Federal Reserve set to hike rates on Wednesday.

Tough week to form a bias.

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:

Expecting some upward price action early in the week before sellers step in (perhaps after the FOMC decision) and work price lower by week’s end.

Watch for third reaction to the FOMC decision to dictate direction into the second half of the week.

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]:

Kind of sloppy but potential support below

Readers are encouraged to apply these techniques to all markets. 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

I don’t have a ton of conviction in the low on Transports, but they have set up a potential support level for buyers to lean onto in the coming days.

See below:

Semiconductors have a similar picture, except the low looks much less sketchy than transports. This index is in a discovery down phase long term but we can see it has had many pullbacks.  Each rip becomes less likely to be a good short entry. That is unless we see something major to the downside that sets up a whole new phase.

Overall I see a bit of room to the downside, then primary expectation is for the potential support to hold.

Ether kind of choppy. Could see the 1,300 level being tested near term for support.

V. INDEX MODEL

Bias model is Rose Colored Sunglasses bearish after two weeks of e[RCS] bullishness.

There were four Bunker Busters in recent history — five weeks back, twelve weeks ago, twenty-five reports back and a third thirty-three reports back.

Here is the current spread:

VI. Six Month Hybrid Overbought

On Tuesday, July 19th Stocklabs signaled hybrid overbought on the six month algo. This signal has bullish statistics. The cycle runs through Tueday, August 2nd end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“I have no special talent. I am only passionately curious.” – Albert Einstein

Trade simple, stay humble

Comments »

Not pretty but we’re pumping

Must be quite brief lads. Had a rager last night here at Mothership and the place is a wreck. There’s a festival going on down the street and I must bike over to meet some good chaps and their kin.

IndexModel still wants the pump. I realize last week started with heavy selling and I expected heavy buying but once that CPI hit, and that red candle hit, and then buyers battled back, and then later the NASDAQ set up that beautiful bullish divergance. Well once all that happened things started to pump.

You may not like the state of the nation or the way folks behave, full grown folks behaving like maniacal children, you may not like it okay? But when the data calls for a pamp by golly you put the longs and participate in the pump.

Barring some unforeseen news event, next week’s calendar is wide open for bulls to have themselves a little pamp fest.

Big Daddy Elon reports earnings at his AI/Robot/Tech company Tesla Wednesday after the bell and I think His Divine Message could be the taste we need to really get that pamp going.

Okay for now,

Raul Santos, July 17th 2022

And now the 393rd edition of Strategy Session.


Stocklabs Strategy Session: 07/18/22 – 07/22/22

I. Executive Summary

Raul’s bias score 3.63, medium bull*. Buyers control the tape early in the week. Then look for earnings Wednesday after the bell from major NASDAQ component Tesla to dictate direction into the second half of the week.

*Extreme Rose Colored Sunglasses e[RCS] bullish  bias triggered, see Section V.

II. RECAP OF THE ACTION

Heavy selling early in the week. A huge sell spike Wednesday morning on the CPI data. Buyers spent Wednesday recovering all the ground lost in the Wednesday spike. Then Thursday, all major indices made new lows except that NASDAQ, which was bullish divergent, effectively setting up a strong rally, across the board into Thursday afternoon. Follow through buying Friday and into the weekend.

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

Rotational Report:

Rotations not telling a bullish story, with all except Staples lower on the week. But given the context of last week’s reversal, and the slight divergent strength in tech…

neutral

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

Concentrated Money Flows:

After six or so weeks of aggressive battle between buy and sell flows, the last two weeks have been a bit more mundane. Last week’s skew was to the sell side.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

A Bunker Buster finally goes positive

There have been four Bunker Buster signals out of IndexModel since risk assets began correcting late last year. Three Bunker Busters in 2022. For the first time we have a signal (6/12/22) that has a positive return. The most recent dip seems to have stuck.

Or perhaps the next leg lower is just around the corner. We don’t know.

However, it is a positive development for bulls to see one of these signals finally nail a tradable low.

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:

Buyers control the tape early in the week. Then look for earnings Wednesday after the bell from major NASDAQ component Tesla to dictate direction into the second half of the week.

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]:

Mini balances under maturing down phases

Readers are encouraged to apply these techniques to all markets. 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

Transports have what looks like a weak low, and this does not inspire a ton of confidence in the stability of the low-end of the recent balance that has taken shape. But, there is still plenty of room for upside in the current down channel.

See below:

Semiconductors took care of that old gap two weeks ago and now I am beginning to suspect we will probe higher to test seller conviction.

Ether holding balance along the psychological 1,000 mark.

V. INDEX MODEL

Bias model is extreme Rose Colored Sunglasses bullish for a second consecutive week.

There were four Bunker Busters in recent history — four weeks  back, eleven weeks ago, twenty-four reports back and a third thirty-two reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“Knowing is not enough. We must apply..” – Leonardo da Vinci

Trade simple, TRADE

Comments »

Time to pump

Alright back to work you lazy sows.

This is america and we’re on the move. Have you seen the Joneses? They’re kicking your ass. They came out of the pandemic like champions, dicks swinging low, leveraging their lives for that bigger house, cottage and boat.

And what of Raul? Growing corn and tobacco in one of the most derelict cities in the union, preparing for chaos?

It fits me. But this isn’t about me. This is about the fate of the financial markets and their outcome is at the mercy of Joey Donuts and John P. Fatburger.

Get back into the trenches and close those deals. It’s time to buidl.

Alright all the guff aside. There is a beautiful alignment on all my signals and basically I have to go ahead to press some long bets into Wednesday. Read the report for all the technical bias development and then pepper into it that the dang moon goes full Wednesday and will be at its closest point to earth on the year. All the moon power gonna be lifting.

I am feeling strong lads. Three thousand strands of GMO sweet corn stand tall like emerald green american cocks. The tobacco leaves a huge and oily and I am pulling doinks out of the earth as we speak both turnips and carrots.

It’s pepper season and I have 50 big’ole bushes of shishedo and boy are they juicy.

I have the means of production and I have seized upon their capability.

Now it is my job, all of our jobs, to go out and extract fiat american dollars from the global financal complex as best as possible.

Said funds are to be converted into real assets like chunks of earth and steel and machines. Chaos will not find us unprepared damnit.

raul santos, July 10th 2022

And now the 393rd edition of Strategy Session.


Stocklabs Strategy Session: 07/11/22 – 07/15/22

I. Executive Summary

Raul’s bias score 3.65, medium bull*. Buyers control the tape through early Wednesday. Then look for the CPI data early Tuesday to pivot the auction. This data is likely to give a clear reaction that we can carry into week’s end but there are a few wild cards that could either accelerate or reverse the action. Fed’s Beige book out Wednesday afternoon and then earnings out of Taiwan Semiconductors Thursday morning.

*Extreme Rose Colored Sunglasses e[RCS] bullish  bias triggered, see Section V.

II. RECAP OF THE ACTION

Markets were closed Monday in observation of Fourth of July.  Heavy selling before cash open Tuesday was sharply reversed and we rallied through Tuesday. Choppy Wednesday. More rallying Thursday. Buyers aggressive again early Friday and held the highs into the weekend.

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

Rotational Report:

Rallied in all the right places. Softness from risk averse Utilities.

bullish

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

Concentrated Money Flows:

Money flows have been an aggressive battle these last six or so weeks. Last week the ledger skewed to the buy side.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Methodical markets

Sometimes the correction periods of a market can seem chaotic. But eventually the market returns to its methodical behavior of mechanically uniting as many buyers and sellers together through the process of price discovery.

The way the semiconductor index resolved that old gap from back in November 2019 and then rallied hard is indicative of the overall market returning to normal.

We’re clear of any major signals from Stocklabs but we have extreme Rose Colored Sunglasses on Indexmodel. The above data were bullish.

Pair this with the scheduled economic events (cpi, beige book Tuesday, Taiwan semiconductor earnings early Thursday) and we have a really clean set-up to trade.

Bullish at least until Wednesday, then pivot based off the way markets react to these three events.

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:

Buyers follow through on last week’s strong close with some continuation Monday. Then look for sellers to emerge by Wednesday. Then a battle for control into the weekend.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

**ANALYSIS NOT COMPLETED**

Bias Book Performance [11/17/2014-Present]:

Poking higher

Readers are encouraged to apply these techniques to all markets. 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

Transports blew out their downward channel and then formed balance on the lower timeframe. Now they appear to have a bit of room to run higher on both time frames despite being in discovery down.

See below:

Semiconductors managed to resolve that old November 2019 gap last Tuesday and rallied hard off of it. This key driver of the overall market is still in discovery down but unless sellers do something major this phase is becoming quite mature. Keep an eye on semiconductors Thursday after earnings out of $TSM. Could tell a story.

Ether has become quite mellow as of late. We’re still working through the overplay for the underlay, but after probing below levels unseen on the cme futures, and then testing the big psychological $1,000 level, we may have formed a failed auction.

V. INDEX MODEL

Bias model is extreme Rose Colored Sunglasses bullish heading into the first full business week of July.

There were four Bunker Busters in recent history — four weeks  back, eleven weeks ago, twenty-four reports back and a third thirty-two reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“The two most powerful warriors are patience and time.” – Leo Tolstoy

Trade simple, be picky

Comments »

Defying the model and leaning bullish into quarter end

As we come to an end of June, a month known to be Raul’s, I feel the urge to briefly reflect and then plot a course against the will of my beloved Indexmodel.

This has been one of the hardest months of my entire life. I sincerely mean this. I lost a dear friend and it was terrible. This kicked off a grieving bender that lasted oh about 14 days or so. A real emotional roller coaster. On top of this is germinated about 3,000 sweet corn (peaches and cream), transplanted three paw paw, kept about 70 containers of tobacco (connecticut shade), brought water to the devil knows how many plants, planned and executed four events, some with over fifty folks in attendance. Became a year older. Celebrated my father. Bought the dip.

I’ve never worked this hard in this kind of heat for this long. Some days I feel like a leathery pickle. Acidic and tanned from the brine (hootch) and sun (labor).

Folks are taking notice. The area around the urban famstead is starting to hum a bit, with more and more fucking hipsters after me lucky charms. Land long abandoned by babied boomers, overlooked during millenial adolescence is suddenly becoming highly coveted. And there is this odd sort of entitelment from the hipsters that arrived five or so years ago that all the land is there for them and that it should be kept in a state of wildgrass and I gotta tell you—I don’t think they know what Italian grit really looks like in practice.

I mean we’re talking about a guy who bangs out stock market models on the weekends, has the skill set to grind money out of the chicago mercantile exchange, withstand deep crypto dips, dig swimming pools by handt. There’s old country blood coursing through my body and often times it wants to make to kill but I channel it into more productive activities like building beautiful things.

Grand papa Raul spent nine years on the African front fighting alongside the Axis of Evil and now somehow that lineage has wound up on Detroit’s eastside ready to buidl.

Don’t fuck with my punkins unless you’re ready to be gabagoled outta spite.

And heading into quarter end there are 4.5 more days of my month and I intend to squeeze every last bit of juice outta them.

Now I must be off—to a catalina wine mixer.

Okay for now.

Raul Santos, June 26th 2022

And now the 392nd edition of Strategy Session.


Stocklabs Strategy Session: 06/27/22 – 07/01/22

I. Executive Summary

Raul’s bias score 3.53, medium bull*. Buyers follow through on last week’s strong close with some continuation Monday. Then look for sellers to emerge by Wednesday. Then a battle for control into the weekend.

*Rose Colored Sunglasses bearish bias triggered, see Section V.

II. RECAP OF THE ACTION

Markets were closed Monday in observation of Junteenth. Buyers made a strong move at the Tuesday open only to see it faded the rest of the day and overnight. Buyers were strong again on the open Wednesday. Then a choppy Thursday gave way to a strong rally into the weekend.

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

Rotational Report:

After three consecutive weeks of risk off rotations away from equities we saw a strong surge back into risk. Except for energy which continues to trade independent of the overall equity complex.

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

Concentrated Money Flows:

Five weeks back bulls regained control of money flows in a meaningful way. Three weeks ago that control was reclaimed by sellers.

Then last week buyers dominated. We appear to be in a zone where both buyers and sellers are aggressively battling for control.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Picture a bit clearer, but not much.

Two weeks back all the stars aligned for a plunge lower. Last week was quite murky.

Now we have a few factors clearing up. It is month end. New flows are likely on deck in the coming week. We discovered a strong bid last week, creating a much less ambiguous picture.

Expectations are for that week ending strength to carry through into the upcoming week. Then we’ll look for sellers to reemerge since we have an RCS signal.

The sellers may not show. We’ve had six months of downward price action. Friday the Fed bankers were hitting the wires with extremely hawkish sentiment yet prices rallied.

The new month/quarter kicks in Friday. So there is potential for ‘mark up’.

For these reasons we’re giving the bulls an edge into the week despite the bearish signal out of IndexModel.

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:

Buyers follow through on last week’s strong close with some continuation Monday. Then look for sellers to emerge by Wednesday. Then a battle for control 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]:

Room for upside even in discovery down

Readers are encouraged to apply these techniques to all markets. 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

Transports have a clear downward channel. Yet there is room for some upside both in the channel and before hitting any levels that formerly behaved as support (areas that have potential to be resistance). The lower timeframe appears set up to drift a bit higher.

See below:

Semiconductors still have a gap in play down below, but similar to transports we have room for some upside on the lower time frame.

Ether has had a few strong moves upward these last few days. This is a messy chart, which means we could be coming into balance.

V. INDEX MODEL

Bias model is Rose Colored Sunglasses bearish after being neutral on the prior report.

It was Bunker Buster two reports ago. This was the fourth Bunker Buster in recent history.

The four Bunker Busters hit, two weeks  back, nine weeks ago, twenty-two reports back and a third thirty reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“Think lightly of yourself and deeply of the world.” – Musashi Miyamoto

Trade simple, enjoy

Comments »

Markets caught a bad case of June gloom

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.

And grey.

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:

Rotational Report:

Third week of complete risk off rotation away from the equity complex.

bearish

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.

bearish

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?

Weekly forecast:

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.

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]:

Discovery down

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.

See below:

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

 

Comments »

All signs point to chaos

Greetings lads,

Shortly after sending out last Sunday’s letter I was absolutely rocked by news a long time friend died from a ruptured aortic aneurysm. 37-years old. Took a nap and was gone.

I’ve been a mess, but also keeping it together for the sake of their family and mine. Definitly not in a mental state to trade.

Not that I have been all year…

but alas, we have our fourth Bunker Buster hot off the press heading into a strawberry super moon, 50 basis point fed hike, quad witching shit show.

I expect price to accelerate to the downside. The CPI gap down Friday morning has a penultimate step vibe to it, and it has me strongly expecting us to leap lower with lots of energy.

We all know the Pelosi clan is bid down here, but are their orders enough? Or will the market do what it does best and humble even the greatest titans of our time?

We dunno.

The gambling halls down in Chicago are giving 96.4% odds of a 50 basis point rate hike Wednesday. The remaining odds are on a 75bp hike.

People are acting very brittle and cowardly when it comes to risk assets and IndexModel is signalling Bunker Buster.

Therefore I must deploy fresh capital this week. Slowly. Gotta see buyers show up first.

Maybe they show up Monday morning and we rally all week we dunno.

Alls I know is the markets tend to give one side the feeling that ultimate success is finally within grasp only to abruptly change course and put the respective participants (in this instance, the butt-loving bears) back in check.

Ergo lower, than higher, unless it is over for real this time.

The corn is planted and the big seasonal work is about 70% complete.

*Remember – June is Raul’s month*

Raul Santos, June 12th, 2022

And now the 390th strategy session.


Stocklabs Strategy Session: 06/13/22 – 06/17/22

I. Executive Summary

Raul’s bias score 1.95, STRONG BEAR*. Price accelerates to the downside early in the week, perhaps pressing lower through Wednesday afternoon’s FOMC announcement. Eventually look for a sharp reversal off the lows to create a tradable low.

Major NASDAQ component Adobe is set to report earnings Thursday after market close.

*Bunker Buster signal triggered, see Section IV

II. RECAP OF THE ACTION

Choppy and mellow through Wednesday then hard selling Thursday and Friday. Sellers used Friday morning’s CPI data to press price lower.

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

Rotational Report:

Another full-on risk off rotation away from equities. Energy still showing its independence from all other sectors.

bearish

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

Concentrated Money Flows:

Three weeks back bulls regained control of money flows in a meaningful way. Last week that control was reclaimed by sellers.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

All data points lower

Sometimes these signals are all crossed up and difficult to interpret. Not this week. They all point lower.

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:

Price accelerates to the downside early in the week, perhaps pressing lower through Wednesday afternoon’s FOMC announcement. Eventually look for a sharp reversal off the lows to create a tradable low.

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]:

Found range high, plunged lower

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 didn’t drift much higher last week. They bumped up against the prior week high and then started selling off. The gap Friday morning is something that could have trapped supply above and may set up a fresh leg lower.

See below:

Semiconductors weren’t as strong early in the week. They began selling off Monday and by Thursday they were on the move lower. Same as Transports, they gapped lower on the CPI data and now appear poised to discover lower prices.

Ether just grinding lower as if some large amount of sell flow is being steadily worked onto the tape, perhaps systematically. The lack of auction info below has be expecting a probe lower into the abyss.

V. INDEX MODEL

Bias model is Bunker Buster again. The fourth in recent history.

We were rose colored sunglasses bearish last week after being extreme Rose Colored Sunglasses neutral two weeks back after four consecutive weeks being neutral. We went Bunker Buster seven weeks back after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

We’ve had three other Bunker Busters in recent history, seven weeks ago, twenty reports back and a third twenty-eight reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“It’s the end of the world as we know it and I feel fine.” – REM

Trade simple, keep moving

Comments »

Gentle reminder: June is Raul’s month

Salutations from the confines of Mothership lads.

I returned last night from a mission up through the Sault. A team of outdoorsmen made it through the northern border and went to work assessing a chunk of Her Majesty The Queen’s land which my dear homie managed to secure with some tax chicanery and a crack team of lawyers. 150 acres of God’s country, well the heck up on the north shore of Lake Superior.

The vehicles could only make it so far and we had to do the remaining miles on foot, breaking trail through dense boreal forestland with drones and binoculars, hootch and fishmeat.

Quite the lot, featuring a lake about the size of four football fields that had a bull moose drinking from it when we arrived.

While the mosquitos were absolute terrorists, the serine landscape offered my mind a bit of respite from the madness of the city. Now I am back and ready to plant my sweet corn fields and excavate the rear alleyway of the urban farm compound.

It’s time to build lads. Digital warfare is me specialty but more and more lately I’ve felt like a gardener in a war more than the other way around.

Let the big dogs slug it out whist I poke on a chunk of earth. Soon the storm will pass and this little squirrl will return to the futures complex and resume extracting fiat from the global financial complex.

It takes a certain bit of humility to act right consistently in the financial markets. To accept that there are conditions that favor my strategy and ones that can destroy me. The last six months have been not my bag.

There have been glimmers of a return to my conditions. I’ve been watching the opens. The overnight gaps are shrinking. And they are being filled early on in the session. Soon I will participate in this great market pastime.

A bit more field work and then I will  return to battle.\

There is a reason June is my month. First of all it is the first real month of summer. Secondly my birthing occurred on Flag Day, compelling americans nationwide to raise a flag in my name. Thirdly, I have the most exquisite physique and it drive women and men wild, and this is good for business.

Okay for now,

Raul Santos, June 5th, 2022

And now the 389th edition of Strategy Session.


Stocklabs Strategy Session: 06/06/22 – 06/10/22

I. Executive Summary

Raul’s bias score 3.25, medium bull*. Volatility continues to taper off. Perhaps the tape drifts lower through the week, but a major rally could be lurking on the horizon. Watch for CPI data out Friday morning to put some conviction into the tape heading into the weekend.

*Rose Colored Sunglasses bearish bias triggered, see Section V

II. RECAP OF THE ACTION

Volatility sort of decreased during the holiday-shortened week with the small cap Russell showing some divergent strength suggesting a slight increase in investors’ risk appetite.

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

Rotational Report:

Energy continues to trade independent of the overall market. Last week’s rotations not really the type to give conviction to the bulls. Market participants continue to reward more risk averse sectors like Industrial and Materials.

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

Concentrated Money Flows:

Two weeks back bulls regained control of money flows in a meaningful way. Last week’s ledger was pretty calm, slightly favoring sellers.

slightly bullish overall

Here are this week’s results:

III. Stocklabs ACADEMY

Hybrid Change still leaning bearish

This report is an attempt to square up all the algorithmic and economic context before the week begins and price starts moving. This week we have some pieces leaning bearish, others bullish. The hybrid change still favors sellers after printing that huge -27.96% back on May 18th.

This indicator is given more weight by me on the intermediate term. Short term it is less important. But the predominant flow of the markets is still lower until we see a larger absolute value print on the Hybrid Change column.

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:

Volatility continues to taper off. Perhaps the tape drifts lower through the week, but a major rally could be lurking on the horizon. Watch for CPI data out Friday morning to put some conviction into the tape heading 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]:

Searching for range high

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 in this descending channel which suggests discovery down intermediate term. However we have yet to really test those old support levels to see if sellers can convert them into resistance. This is why next week I expect this index to drift a bit higher.

See below:

Semiconductors have made a clearer attempt higher on their balance and seem to be settling into a balance zone.

Ether is still sort of working through the overplay for the underlay. That bearish flag descending wedge pattern thing suggests downward pressure remains. There is rumor that some legislation will be introduced in the Senate this week that may affect the price of this instrument in a big way. My primary expectation is for a flush lower before we can gain clarity on the auction.

V. INDEX MODEL

Bias model is rose colored sunglasses bearish after being extreme Rose Colored Sunglasses last week after four consecutive weeks being neutral. We went Bunker Buster six weeks back after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

We’ve had three Bunker Busters in recent history, six weeks ago, nineteen reports back and a third twenty-seven reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“The more you say, the more likely you are to say something foolish.” – Robert Greene

Trade simple, focus on execution

 

Comments »

Summer is officially a go

Howdy gents. Happy Memorial Day and all that jive.

I have to be brief. There are many plants needing water and boots and pants discos to enjoy before I bug out to Canada for a few days of healing.

I am continually mystified by how difficult it is to coach someone through watering plants. Something that seems so simple, mundane, mindless even. I’ve set up so heckin many irrigation pipes because folks can’t seem to take a hose and give a plant a proper water.

Anyhow.

Markets caught a decent bounce last week. Contextual charts appear to have a bit more room to the upside and IndexModel is flashing signs that it is time for equities to mellow out and mark time. And that sentiment seems to align perfectly with the calendar.

Summer is here for real for the first time in two years. We sort of 70% had summer last year but this year it is back on.

Who the hell wants to sit in front of monitors all days poking at these auctions.

Let the algos and interns and the intern algos do nothing for a bit whilst we savor these sweet 90 days.

Okay for now.

Raul Santos, May 29th 2022

And now the 388th edition of strategy session.


Stocklabs Strategy Session: 05/31/22 – 06/03/22

I. Executive Summary

Raul’s bias score 3.73, medium bull. Expect volatility to recede a bit during the holiday-shortened week. Price stabilizes and holds last week’s gains.

U.S. markets will be closed Monday, May 30th in observation of Memorial Day.

II. RECAP OF THE ACTION

Choppy sideways action through Wednesday then a strong rally Thursday and Friday.

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

Rotational Report:

Strong rotation into the equity complex across the board with leadership in the ‘right’ sectors.

bullish

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

Concentrated Money Flows:

Bulls took back control of money flows eleven weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But then eight weeks ago sellers negated that control and maintained control. Until last week.

Last week’s ledger shows strong money flows that effectively negate the last eight weeks of seller control.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Hybrid Change % is really intense right now

The large absolute values we are seeing printed on this portion of the algo is indicative of current market conditions, which are pretty volatile.

This indicator still suggests sellers are hitting the tape harder than the buyers, despite the strength seen late last week.

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:

Expect volatility to recede a bit during the holiday-shortened week. Price stabilizes and holds last week’s gains.

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]:

Bounce and push

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 caught a bit of a bounce and my primary expectation is for buyers to probe a bit higher into resistance in the coming week.

See below:

Semiconductors same thing. Looks like there’s a bit of room to the upside and an area of resistance that is likely to act like a magnet, drawing price a bit higher.

Ether futures only began trading in February of 2021 so there is no price history below about 1370. If we zoom all the way out on the price action since these futures went live we do see a very Gaussian distribution of volume.

Ether grew up and became something different once futures were made available at the cme. Now the most sophisticated participants have a means of discovering the value of this crypto currency (worldwide computer).

And it appears these participants are doing what they most effectively do—test higher, test lower, discover value and facilitate trade.

I could see us probing the abyss soon, and then we’ll see if this all is one big balance, with value somewhere around 3,000.

We don’t know.

V. INDEX MODEL

Bias model is extreme rose colored sunglasses after four consecutive weeks being neutral. We went Bunker Buster five weeks back after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

We’ve had three Bunker Busters in recent history, five weeks ago, eighteen reports back and a third twenty-six reports back. The Bunker Buster before these recent three was sixty-four weeks ago.

Here is the current spread:

VI. 12-month Technical Oversold

On Monday, May 9th Stocklabs signaled hybrid oversold on the 12-month algo. The 10-day bullish cycle that runs through Monday, May 23rd end-of-day. Here is the final performance of each major index over the cycle:

VII. QUOTE OF THE WEEK:

“I am a great believer in luck. The harder I work, the more of it I seem to have.” – Coleman Cox

Trade simple, do the work behind every trade

Comments »

The gains of 2021 were fake and had to be undone

When I hear the dang boomers say, “it’s not a profit until you book it,” a dark part of me wants to make to kill.

We really made strides these last few years towards dismantling nationalism, nation-states and the whole concept of lines on a map. Big tech was blessed with giga-valuations, and checks being mailed out to every american simply for existing called fiat into question for real.

The old tiger (U.S. dollar reserve currency) sensed its last fight and went to battle systematically dismantling all this hubris.

Most stock charts have erased any progress made during that mysterious grey time that was 2021, back when we were in lockdown but weren’t in lockdown? When two jabs gave a chap freedom to go into a small hot room with a bunch of women and mouth breathe, but it was frowned upon by the weak immune systems of the american gen pop.

The truth is, we can now see, clear as a liberty bell, that those 2021 advances were fake. Anyone who cashed out during that time can now see that they were in fact a champion.

My google pixel pops up photo memories and this time last year I was putting the finishing touches on that bastard kitchen. That project was funded by the dang speculative markets, and I hated all those trips to the tile store and ikea and Lowes because I wanted those dollars to stay in the speculative markets.

In hindsight, of course, I am grateful. Because I built that super gay kitchen to stand the test of time. I no longer have to prepare meals on a busted ass stove or plate food on green Formica or worsh ma giant stock pot in a little baby sink. Would that 40-or-so thousand fiat american dollars bought some bored apes and become 400-or-so fiat dollars? Or would it have stayed in Tesla and doge for the great dismantling?

We dunno.

The great bull run of the last five-or-ten years was my second major economic cycle, and I was operating on hard learned lessons from the prior one, that my degeneracy would always lead to me pressing risk so I’d better convert some gains into something else because too much liquidity in my purse ends up being taken away by the citadel.

I guess this entry is a gratitude post for being somewhat in the right state of mind last year. I’m grateful for a clean kitchen and a new chunk of earth to grow corn upon. I turned into a real menace towards the end of the cycle. Putting my hair in braids and accosting Goldman Sachs bankers via Twitter. And of course I regret making my already too big TWTR position even bigger towards the end of ’21. But next cycle I shall do better. I’ll probably have a complete grey beard by then but those greys are wisdom yes?

I’ve been made to be humbled once a gain by market mechanisms, and I have no choice but to dig in for another few hard years of chopping wood.

It’s feast and famine at the House of Raul [HoR] always has been. Not sure if I’d enjoy life any other way.

I was out late last night, amongst the people, listening to loud house musics and chewing mushrooms, and I couldn’t help but appreciate how pretty dang decent Detroit’s trajectory seems to be.

A storm is coming and us post industrial wasteland folk have the infrastructure to thrive during it. Ten foot fences. Steel plate shutters. Walled gardens.

So maybe we just savor the sights and sounds of boomers and their chaos. The Ray Dalio’s of the world and their chronic paranoia.

A car might be the hardest thing in the world to build.

Raul Santos, May 22nd 2022

And now the 387th edition of Strategy Session. Enjoy.


Stocklabs Strategy Session: 05/23/22 – 05/27/22

I. Executive Summary

Raul’s bias score 2.65, medium bear. Buyers follow through on their late-Friday buying into the new week. Then watch for FOMC minutes out Wednesday afternoon to dictate direction into the second half of the week.

Major semiconductor NVIDIA is set to report earnings Wednesday after the bell.

II. RECAP OF THE ACTION

Bit of a rally through Tuesday then heavy selling came in and sent price down through last week’s lows on all indices except the Russell, which was bullish divergent. Then we had a moderately strong ramp rally into Friday close.

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

Rotational Report:

Wall Street punished share prices of several major retailers last week after they reported earnings and that is reflected in sector rotations which saw Staples and Discretionary heavily rotated away from. Meanwhile Utilities and Healthcare were positive on the week. Energy continues to trade independent of the overall market.

bearish

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

Concentrated Money Flows:

Bulls took back control of money flows ten weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But then seven weeks ago sellers negated that control.

The ledger once again skewed to the negative side, but not to as extreme a degree as the prior two weeks.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Hybrid Change %

While both IndexModel and Stocklabs oversold signals have been having a rough go at this tape recently, both being in a draw down phase of their statistics, the Hybrid Change % has been a bit more reliable.

I use this daily reading to assess who is in control of the tape intermediate term. It has flip flopped a bit these last few days, but before then if you flip through the data the biggest absolute readings have been to the downside. This data point has done a decent job of staying on the dominant side of the tape.

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:

Buyers follow through on their late-Friday buying into the new week. Then watch for FOMC minutes out Wednesday afternoon to dictate direction into the second half of the week.

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]:

Down channels and other migrations

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 accelerated to the downside last week, and the downward channel remains in place. Discovery down.

See below:

Semiconductors could be in the process of accepting a new range here, which lines up with the 2021 lows. Had to say, but maybe this index is accepting value around here, a few tiers off all-time highs but still a long way up.

Ether is quite messy. We can see a recent attempt at balance here, which sort of resembles a bear flag. These type of obvious technical patterns rarely resolve the way technical analysis books say they will. But we could see an attempt down-and-away from the flag. How that is received will tell a story.

V. INDEX MODEL

Bias model is neutral for a fourth consecutive week after going Bunker Buster four weeks back after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

We’ve had three Bunker Busters in recent history, four weeks ago, seventeen reports back and a third twenty-five reports back. The Bunker Buster before these recent three was sixty-three weeks ago.

Here is the current spread:

VI. 12-month Technical Oversold

On Monday, May 9th Stocklabs signaled hybrid oversold on the 12-month algo. This is a 10-day bullish cycle that runs through Monday, May 23rd end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“And why should we feel anger at the world? As if the world would notice.” – Euripides

Trade simple, willing to accept the news and noise

 

Comments »

Carrying water

The new information out of the equity markets last week is that prices were too high. They went lower and now we don’t know whether they’ll continue going lower but we do know they were apparently too high a few weeks back.

That’s my intellectual analysis. Real bearish mf could probably contrive something that sounds more intelligent. Some ‘why’. But that is not my game. I am a Big Tech perma bull and I am being punished for keeping false idols.

Nevertheless, it is difficult to kill me as I am already dead. This market has gutted me at least 4-5 times in my life and the good news is I’m still here and overall the numbers on the screen that say what I am worth are up up up.

They don’t want some free speaking, independent thinking vagabond roaming around america, growing tobacco and securing deeds on chunks of earth, but here we are.

I have to put 60 shiseido peppers in the ground and it’s about 86 degrees. So I must bid you adeau.

For now.

Raul Santos, May 15th 2022

And now the 386th edition of Strategy Session. Why the heck not? Enjoy


I. Executive Summary

Raul’s bias score 2.85, neutral. Buyers actively control the tape throughout the week. Watch for volatility Tuesday with Walmart set to report earnings before the bell and Powell on deck to speak in the afternoon.

II. RECAP OF THE ACTION

Equity markets were already under heavy selling pressure by Monday morning. Price was choppy through Wednesday then started to sell of Thursday. There was a strong ramp higher late Thursday into closing bell and that carried through to the weekend, with Friday strong across the board.

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

Rotational Report:

A bit of relative strength from Staples. Otherwise continued strong selling rotations.

bearish

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

Concentrated Money Flows:

Bulls took back control of money flows nine weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But then six weeks ago sellers negated that control.

Sellers dominated the money flows again last week. Ledger is skewed to the sell side.

Sell flows becoming a bit extended here, which has me on the lookout for a ‘relief’ rally.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Nearly six months off the trading desk

One of my earliest mentors in active futures trading was an Australian chap who used to always tell me trades were like busses, that another one was always coming.

Because at the time I was hot wired to want to catch every single little oscillation in price. I would magnify the chart to a scalping time frame and sometimes execute over 50 trades in a matter of minutes.

It was a bit excessive.

The more I honed my skills, the more selective I became. I still rapid fire when I am actively trading, but most of the time I just sit and wait for an algo to tell me to go live.

Now this latest sit, me going offline in December and not trading for almost six months now. It has been a mental challenge. But I know I am not in a position to trade well right now. I have this dang year two farm project and it is demanding a lot of my brain power.

These markets were here long before me and will be around long after I am gone. I am excited to get back to work, but honestly it has been nice to be an observer during this high volatility slide lower.

I see active traders who love volatility. My approach actually does best when we’re sort of lazily drifting.

So perhaps by the time I go live those conditions will return. We don’t know.

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:

Buyers actively control the tape throughout the week. Watch for volatility Tuesday with Walmart set to report earnings before the bell and Powell on deck to speak in the afternoon.

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]:

Sellers blow out ranges

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 and pretty much everything else were sold hard last week, sending price out of range. Now it appears this chart is in a downward channel. Discovery down.

See below:

Semiconductors lost range. There may be a new range here but overall it was a discovery down move to arrive here.

Ether sort of messy. Perhaps finding a new range.

V. INDEX MODEL

Bias model is neutral for a third consecutive week after going Bunker Buster three weeks back after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

We’ve had three Bunker Busters in recent history, three weeks ago, sixteen reports back and a third twenty-four reports back. The Bunker Buster before these recent three was sixty-two weeks ago.

Here is the current spread:

VI. 12-month Technical Oversold

On Monday, May 9th Stocklabs signaled hybrid oversold on the 12-month algo. This is a 10-day bullish cycle that runs through Monday, May 23rd end-of-day. Here is the final performance of each major index over the cycle:

VII. QUOTE OF THE WEEK:

“He will face a battle he knows not, he will ride a road he knows not.” – Gilgamesh

Trade simple, we don’t know

Comments »