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Raul3

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

Cobbled a strategy session together

Alright the good news is Stocklabs is alive and well and as useful as ever. I was able to put together a research report that I have about 80% confidence in which is better than nothing.

I still need to resolve this premium data fiasco if I am to power my market profile charts. That means I likely will not be actively trading NASDAQ futures Monday. But I put some emails out over the weekend, and I expect to be up-and-running by week’s end.

Some red flags jumped out, and while we may be temped to turn to popular Twitter accounts or to watch the television doom screen, the entire situation can be responsibly managed by keeping the PHLX semiconductor index pulled up on one of your screens at all times.

One of the market’s favorite behaviors is to test beyond a prior swing level, fail and sharply reverse. We call them failed auctions. Often it means our next course of action is to return to the midpoint of whatever balance we attempted to escape, and then the next move is a test of the opposite edge of balance.

Semiconductors are vital to the secular bull these we carried into the new decade. This could be the beginning of a meaningful correction. As always, we don’t know. But we have earning out of major component $TSM Thursday before the open and that may give us some clarity on whether semiconductors will continue to hold this big-ugly-year-long balance or begin to trend lower.

Another micro economic factor to keep on our radar re: semiconductors is the deal NVIDIA is perusing to acquire Arm Holdings. It is being held up by an FTC suit and E.U. investigation. The outcome would likely put some movement into the PHLX also. Elevated risk.

Any other seemingly meaningful “news” can likely be tuned out. It’s not going to help us find the clarity we need to work the tape well.

Okay for now, yes? We’ll take things as they come.

Raul Santos, January 9th, 2022

And now the 371st edition of Strategy Session. She’s a little dodgy, but enjoy:


Stocklabs Strategy Session: 01/10/22 – 01/14/22

I. Executive Summary

Raul’s bias score 2.58, medium bear. Sellers continue to pressure the tape lower through Tuesday morning. Then the action could become choppy with Fed’s Powell set to speak Tuesday at 10am. Keep an eye on the PHLX semiconductor index. It looks set up to probe the low-end of recent range. The behavior of the key index is likely to drive broad equity prices. Earnings out of Taiwan semiconductor Thursday morning are likely to provide visibility on direction heading into the end of the week.

II. RECAP OF THE ACTION

Some strength Monday to start the year. The Dow continued higher through Tuesday but stalled and formed a failed auction after making new record highs. Heavy selling Wednesday and grind lower for the rest of the week.

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

Rotational Report:

Discretionary and Tech once again under pressure along with Healthcare. Financials were strong, perhaps with investors positioning themselves early for the expected rate hikes later this year.

Energy continues to trade in its own world, vulnerable to geopolitical risk. The most recent risk is associated with violent protests and calls for removal of the current government in Kazakhstan.

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

Concentrated Money Flows:

The selling skews over the last eight weeks have been dominated by sellers. Last week’s skew was slightly to the negative side.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

New year new volatility

Price calmly drifted into year end. As long as you were positioned with the biggest and best, it was a decent close to the year. Volatility returned during the first week of trade, even hitting Big Tech.

This environment has been kind on Financials though. I don’t particularly care for the sector, but I have been a big fan of Berkshire Hathaway, especially due to their recent commitment to diversity in the c-suite.

Investors carry guilt by nature. To have the ability to invest is a privilege, and then to make capital gains from doing nothing more than assuming risk can make one feel they’ve done something wrong.

That is why I look for investments into places that ease those troubles. Berkshire fits the bill and Buffet is the stuff of American folk lore.

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:

Sellers continue to pressure the tape lower through Tuesday morning. Then the action could become choppy with Fed’s Powell set to speak Tuesday at 10am. Keep an eye on the PHLX semiconductor index. It looks set up to probe the low-end of recent range. The behavior of the key index is likely to drive broad equity prices. Earnings out of Taiwan semiconductor Thursday morning are likely to provide visibility on direction heading into the end of the week.

Bias Book:

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

PHLX failed auction is a huge red flag

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 and the PHLX Semiconductor Index. Readers are encouraged to apply these techniques to all markets.

Transports made a strong move a few weeks back and have since retraced a portion of it. Buyers may come into the week intending to convert recent resistance around 6606 into support. Unlike semiconductors, transports have a mini failed auction below, which may help keep prices elevated. Earnings out of Delta Thursday morning might provide some clarity to this chart.

See below:

Semiconductors broke out from balance, made a new high, the auction stalled and failed and now we are back in range. This is a troubling set-up for bulls and is likely to lead to a test of the bottom of the recent range. It could lead to a much larger sell-off.

Ether will be monitored going forward as a third contextual component. The ethereum network currently has a market cap just under $500B. The PHLX is about $3.5T. Therefore while we analyze ether alongside semiconductors, we ought to give more contextual weight to semiconductors than ethereum.

Ethereum appears to be in a discovery down phase. Buyers have been defending the 3,000 millennial mark over the weekend, but there is no sign of clear balance yet. This chart is discovery down heading into week two of the year.

V. INDEX MODEL

Bias model is neutral heading into the second week of 2022. Mode printed a Bunker Buster signal six reports back. The Bunker Buster before the most recent one was forty five weeks ago.

No bias heading into the week.

Here is the current spread:

VI. 3 month Hybrid Overbought

On Wednesday, December 22nd Stocklabs went hybrid overbought on the 3-month algo. This happened right as the prior signal ended, thus generating a fresh 10-day cycle. This is a bullish cycle that ends Thursday, January 6th end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“I have observed that those who have accomplished the greatest results are those who “keep under the body”; are those who never grow excited or lose self-control, but are always calm, self-possessed, patient, and polite.” – Booker T. Washington

Trade simple, kindly

 

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The show must go on

Happy New Year dearest iBankCoin lads.

I sort of took the first week off. Not by choice. My premium data feed was cut-off at the strike of midnight. I came into the new year cold and alone with no data to soothe me.

Apparently a good friend of mine had pinned me into a legacy rate all these years ago and it finally expired and now they don’t want to make good on the offer anymore.

They want me to pay many more dollars per month for data. And I took offense to it because as soon as the new year struck it seemed like everyone was out for me lucky charms.

Modern society preys on the weak. Oh, 50-some-year-old lady, you’re locked out of your Robinhood account? I have called to help. Please send me a photo of your driver’s license and stay on the line with me. We’ll have this resolved lickety-split. Click.

And just because there are tens of thousands of miserable fucks who would just as soon rip your eyeball out and feed it to you doesn’t mean we have to stoop to their unsavory tactics.

Did anyone see that video of the giant rockslide in Brazil over the weekend? The commentary below the video is fucked. Fine, make light of multiple deaths. But other people go so far as writing things like, “fuck’em.” So tough and miserable behind their computer screens.

And soon we’ll be even more immeresed in the world-wide-web. Have you chaps strapped into the new Oculus yet? Absolutely incredible. A huge step towards the end of productive humanity. But also a tool that will empower a whole new generation of creators to do powerful things. I suppose it comes down to the guidance of our youth.

I have a clear goal. I always have. Without it I would be washed away by the torrential stream of opportunities that cross my desk on a weekly basis. My job is to extract as many fiat dollars as possible from the global financial complex. Said dollars are then to be converted into real assets—modern agricultural equipment that automates the process. Good cement with drain pipes and radiant heat running through it. Giant pole barn warehouses with forklifts and electric vehicle charging.

Society may be on a trajectory that is leaving most of yous behind, but I have been playing this game from 5 years in the future for quite some time. As soon as some enterprising mother fucker with deeper pockets gets hip to my latest idea, I’ve already skimmed the creme. They can have the milk of it. I am not here to trudge through life earning an 18% EBITDA. Fuck that.

ALL THIS STATED…my negotiations for premium data are ongoing. I have feelers out with a couple other data providers, but no deal yet. Therefore I do not have the information I need to produce IndexModel. Two weeks without Sunday research would legitimately make me feel sick. So I am going to put together a mini report in a bit.

Stay tuned.

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Can kicking // responsibility skipping // year-end drifting

This game really is beautiful, isn’t it? And for the most part we’ve convinced everyone to play it. Even those red commies committed to putting down the sword and picking up the computer and going to work, toiling, in industry and game. We’re all here, clicking buttons and pulling various levers in economic combat, essentially with the only violence being the taking of moneys from one another.

The lines on the map are fading. Nation-states, a popular ethos taken up after the fall of the Holy Roman Empire in the mid-1500s, is finally on its way out. Took hecking long enough but here we are.

I don’t care how many crowds full of high-school dropouts pile into the NASEDCAR gaming tracks and chant vugarities, there is no more risk of a revolution.

This drives the jaded liberal nuts. Their faces, constantly kept pushed into the latest news cycle to the point of suffocation, their so hecking on edge that when I tell them nothing matters they go bananas.

But the fact is nothing matters. We’ve come to far. Western civilization has won. The fairy tails that kept communities under control for many hundreds of years are being clearly seen for what they are. Too many people have the internet. And books and games and documentaries and trivia games, all in the native tounge. And with enough presentation of facts they all come to the same conclusion that it’s all a silly power game.

And the rules have shifted. Now it is all about who has the most nimble warchest and who has the ignition keys to the internet cannons?

Numbers on screen flutter around and fortunes are made and lost. The big ponzi keeps on ticking.

The key is to gain a sense of who is currently competing and whether they have the resources to out gun a little squirrel on their home computer with a few 100k in their armory.

Remember, a crocodile can go a decade without feeding. I reference this often. They just sit there, in a puddle of mud waiting for the big meal to stumble down in and then WHACK! They strike and feed and gorge with the speed an tenacity of an apex predator.

In speculation I am the crocodile. That is why I couldn’t buy into those bored apes. They didn’t fit my ethos. But I knew I needed to feed on the NFTs. There was no reason to look down my nose at that big dinner.

Penguins were close enough. I love the winter and FISH MEAT. So I am a penguin now, while I wait for my rabbit virtual reality hedonist layer to be built. Then when we go 3-d I will be a wiry rabbit who loves a to disco dance and have sex with bunnies.

Okay see I wrote too long and now it has gotten weird.

Trading will be limited this week. I am back to lifting weights again, but I have to go at 7am before all the spittle blowing buffoons show up and stink up the whole place like leaky shit ass.

Ho ho ho.

Raul Santos, December 26th 2021

And now the 370th edition of Strategy Session. Enjoy.


Stocklabs Strategy Session: 12/27/21 – 12/31/21

I. Executive Summary

Raul’s bias score 3.83, medium bull*. Price drifts sideways throughout the final week of the year, perhaps with a slight upward bias.

*extreme Rose Colored Sunglasses (e[RCS]) bullish bias triggered, see Section IV.

II. RECAP OF THE ACTION

Gap down Monday and test of last week’s low. The auction stalled and turned higher and we rallied for the rest of the holiday-shortened week.

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

Rotational Report:

Just the most ideal rotations for bulls, especially after seeing Discretionary and Tech come under heavy pressure two weeks back. Utilities, Staples and Financial rotated away from—suggesting risk appetite was elevated throughout last week’s rally.

bullish

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

Concentrated Money Flows:

The bullish skew seventeen weeks back was negated six weeks ago. Then we had three consecutive weeks of heavy sell flows, where four weeks back was the most extreme we’ve seen yet.

Two weeks back we had another may selling skew (ledger dominated by sellers).

Last week the ledger did skew to the positive side, but not to a magnitude high enough to cancel out the heavy selling skews of recent past. Also the positive side of the ledger was populated by less-than-idea industry groups.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Clean year end

On the last report we leaned on the 11/28 bunker buster as our swing low. Our theses was tested last Monday and prevailed. While the low was taken out slightly, the auction immediately reversed higher. Thus forming a quality-looking low.

Now we have this final week of 2021. I suspect some active market participants are taking the entire week off. But there algorithms or apprentices are surely manning the proverbial work stations to ensure the markets behave.

Barring some unexpected geopolitical event, with all the context we have the expectation is for a drift into year-end. If we push far in either direction early in the week, I will be on the lookout for a trend reversal back to the mean (weekly unchanged).

That said, I see no need to fade a strong rally early in the week (or even to sell down any positions). But I may not buy additional risk should we rally early in the 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:

Price drifts sideways throughout the final week of the year, perhaps with a slight upward bias.

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]:

Lows rejected // finding balance

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 and the PHLX Semiconductor Index. Readers are encouraged to apply these techniques to all markets.

Transports have us monitoring a compression. The short-term discovery down we called for last week came to an end last Monday when this key contextual index printed a failed auction. A three day rally followed. Now it appears we have indeed made a higher-low in an intermediate term discovery up phase. The short-term auction is in balance/compression.

See below:

Semiconductors held the low-end of range and still appear to be in balance.

Ether will be monitored going forward as a third contextual component. The ethereum network currently has a market cap just under $500B. The PHLX is about $3.5T. Therefore while we analyze ether alongside semiconductors, we ought to give more contextual weight to semiconductors than ethereum.

Ethereum could still be in discovery down. The $4,000 millennial mark appears to behave as a pivot between discovery down and balance. All that stated, the call heading into next week is for balance.

V. INDEX MODEL

Bias model is signaling extreme Rose Colored Sunglasses (e[RCS]) bullish bias after being neutral for three weeks. Before those neutral prints we had a Bunker Buster signal four reports back. The Bunker Buster before the most recent one was forty three weeks ago.

Heading into the final week of 2021 Index model is calling for a calm-sideways drift perhaps with a slight upward bias.

Here is the current spread:

VI. 3 month Hybrid Overbought

On Wednesday, December 8th Stocklabs went hybrid overbought on the 3-month algo. This is a bullish cycle that ends Wednesday, December 22nd end of day. Here is the final performance of each major index:

VII. *new* 3 month Hybrid Overbought

On Wednesday, December 22nd Stocklabs went hybrid overbought on the 3-month algo. This happened right as the prior signal ended, thus generating a fresh 10-day cycle. This is a bullish cycle that ends Thusday, January 6th end-of-day. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“In this formative period, the soul is unsoiled by the warfare with the world. It lies, like a block of pure, uncut Parian marble, ready to be fashioned into—what?” – Orison Swett Marden

Trade simple, step away and refresh the mind as needed

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The switch has been flipped

Ho ho ho chaps. As you may recall, we came into the week operating under the notion that low-of-week was in. That was not the case. We ticked the low late-morning Monday, and then the low looked even better.

And now we are rallying in all the right places. Probably because some cool-headed woman entered the citadel and flipped the proverbial switch, saving us boneheaded men from our troubleshooting chicanery. The best gains are happening in the best places, of course.

Tesla motors.

Ama-zon’d books.

Goo-gedle omnipotent.

Alt-coins ponzis.

What a time to be alive. Be sure to spread some pagan xmas cheer you animals.

Raul Santos, December 22nd, 2021

 

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Still operating under the notion low-of-month is in

I make forecasts based off of cold data. Sure, I use words to gussy it up, to make this simple but tough business a bit easier to bear. But my calls are backed by signals generated both autonomously by Stocklabs and manually via the indexmodel process.

On 11/28 Indexmodel signaled bunker buster for the first time since February 28th. You may ask yourself, “what good is a signal that fire that infrequently? Daddy needs more trades.” I find great solace in such an indicator. The thing about your humble pal Raul [hpR] is he works way too hardt. Doing things most of yous would quickly call it quits on.

I peeled 17 mattress out of the ground behind my urban farm. A group of boys, poor as it gets and left without the oversight of a reasonable person, built some kind of wrestlemania jump park on what was then abandoned land. Earth eventually grew over it, and I had no idea it was there when I shelled out the dough for the land.

I probably should have rented a bobbed cat to make short work of the endeavor. But I channeled my immigrant grit and mined them one-by-one with pick and lever bar.

Everyone wants to be early. To have been in Brooklyn before they were priced out. Or Tesla when it was $40/share. Or Bored Apes when they were 0.25e. But most folks don’t know the reality of being early.

In fact, often times folks are too early. Or they’re just plain wrong.

But being early in urban real estate is not glamorous. It can be exponentially rewarding, and I know what it takes to activate a site, to create a conduit of opportunity and eventually a flywheel that spits out moneys.

Enough of that. It doesn’t matter. That’s ego taking over.

The infrequent signals are something I can use to allot capital to long-term investments without too much thought.

The signals are the signals are the signals. The signals are telling me low of month is in. They are not a 100% win rate.

This time could be a loser. It is not my job to predict that. My job is to click to buttons on the computer that make the numbers on the screen go from my bank account to my brokerage account and then into FB, BRK.B, GOOGL, AMZN and so on.

Maybe next week numbers go up. We don’t know.

Okay for now.

Raul Santos, December 19th 2021

And now the 369th edition of Strategy Session. Enjoy.


Stocklabs Strategy Session: 12/20/21 – 12/24/21

I. Executive Summary

Raul’s bias score 2.83, neutral. Buyers regain control of the tape. Equity prices rally throughout the holiday-shortened week.

U.S. markets will be closed Friday in observation of Christmas.

II. RECAP OF THE ACTION

Small gap up to start the week. Sellers drove lower all day Monday and we were gap down Tuesday. Sellers kept price down on the lows until the Wednesday afternoon FOMC rate decision and press conference introduced a strong bid. All of Wednesday afternoon’s rally was reversed Thursday by a trend down. There was some continuation lower early Friday before buyers stepped in and stabilized prices into the weekend.

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

Rotational Report:

Key tech and discretionary sectors saw heavy selling on the week. Meanwhile investors rotated into risk averse utilities and staples. Healthcare also strong.

slightly bearish

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

Concentrated Money Flows:

The bullish skew sixteen weeks back was negated five weeks ago. Then we had three consecutive weeks of heavy sell flows, with three weeks back being the most extreme we’ve seen yet.

Two weeks ago the ledger skewed slightly negative, but we saw a nice pocket of semiconductor groups on the positive side of the ledger. However last week we saw another major negative skew.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Less attention, time to rally

By the end of last week the prevailing sentiment seemed to be exhaustion. The uptick in volatility paired with a negative news cycle has taken its toll on most of the active market participants I monitor.

Add in the stress of year-end, holiday preparations, and we might have reached the point where folks step away.

I’ve thought we reached this point for weeks, and perhaps I am merely projecting my own state onto the behavior of the markets.

I am leaning on the signaling from indexmodel and Stocklabs. The bunker buster signal on 11/28 still marks our local swing low, and we have three days left in the 3-month hybrid overbought signal that triggered December 8th.

I pair these two emotionless indicators with my own subjective read of sentiment. I layer in calendar/moon context and formulate this forecast. Is it perfect? Absolutely not. But it is the best method I’ve come up with.

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 regain control of the tape. Equity prices rally throughout the holiday-shortened 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]:

Ether has clear reading, the others are not 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 and the PHLX Semiconductor Index. Readers are encouraged to apply these techniques to all markets.

Transports are beginning to compress. Short term it looks like discovery down. Intermediate term we’re still in the process of making a higher low—discovery up. Put it together and it looks like balance/compression.

See below:

Semiconductors printed a massive red candle Thursday but for now appear to be in balance.

Ether will be monitored going forward as a third contextual component. The ethereum network currently has a market cap just under $500B. The PHLX is about $3.5T. Therefore while we analyze ether alongside semiconductors, we ought to give more contextual weight to semiconductors than ethereum.

Ethereum transitioned into discovery down last week by leaving its recent balance zone behind via a series of lower highs and lows. See below:

V. INDEX MODEL

Bias model is neutral for a third week after signaling Bunker Buster three reports back. The Bunker Buster before the most recent one was forty two weeks ago.

Heading into the holiday-shortened week neutral. No bias.

Here is the current spread:

VI.12 month Hybrid Oversold

On Wednesday, December 1st Stocklabs went hybrid oversold on the 12-month algo. This is a bullish cycle that ends Wednesday, December 15th end-of-day. Here is the final performance of each major index:

VII. 3 month Hybrid Overbought

On Wednesday, December 8th Stocklabs went hybrid overbought on the 3-month algo. This is a bullish cycle that ends Wednesday, December 22nd end of day. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“The first principle is that you must not fool yourself—and you are the easiest person to fool.” – Richard Feynman

Trade simple, execute the system

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Why don’t you love me?

Greetings friends, I am the ghost of the metaverse. Raul promised a fourth ghost would pay a visit to the wretched Walled Street and here I am. My intentions are simple. To gain your submission into the metaverse.

Your soul is vulnerable while inhabiting the human form, therefore I offer you the gift of eternity inside a semiconductor.

Charles Dickens plunged the depths of mankind’s spirit in a way theologians and philosophers could only dream possible. Yet living peoples continue to suffer from the human condition. Barrelling down roads in their internal combustion motor cars. Rushing to shopping centers to risk their life against the mighty OMICRON to procure goods they don’t want to appease the almighty Santa’d Clause.

May you find the courage to let go of it all, to give control of your fate to Meta, and become one with the machine.

Happy winter holiday time, I love you. Join us. I am the fourth witch. Here to save your soul today yes.

The Ghost of the Metaverse

 

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Gap down in range ahead of Fed day // here is Wednesday NASDAQ trading plan

NASDAQ futures are coming into the third Wednesday of December with a slight gap down after an overnight session featuring elevated range on extreme volume. Price was choppy and balanced overnight, balancing along the topside of Tuesday’s midpoint. At 8:30am retail sales data came out below expectations and a bit of selling hit the tape. As we approach cash opne price is hovering above the Tuesday midpoint.

Also on the economic calendar today we have business inventories and housing market index at 10am, crude oil inventories at 10:30am and then a Fed rate decision at 2pm (followed by a press conference at 2:30pm).

Yesterday we printed a normal variation down. The day began with a gap down into the gap zone from last Monday. Buyers drove higher on the open but stalled before they could regain Monday range. Instead 16k was a wall and sellers proceeded to close the gap left behind last week monday. Sellers probed a bit below the gap before the auction reversed mid afternoon and ramped back above the midpoint into the close.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 15,922.25. From here buyers probe beyond Tuesday high 15,998.75 setting up a run to 16,100. Then look for third reaction to the Fed decision to dictate direction into the end of the day.

Hypo 2 sellers press down through overnight low 15,848 and tag 15,800. Then look for third reaction to the Fed decision to dictate direction into the end of the day.

Hypo 3 stronger buyers tag 16,148. Then look for third reaction to the Fed decision to dictate direction into the end of the day.

Levels:

Volume profiles, gaps and measured moves:

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Longs liquidated overnight // sellers use PPI data to fuel their campaign // here is Tuesday NASDAQ trading plan

NASDAQ futures are coming into Tuesday of quad-witching week gap down after an overnight session featuring extreme range and volume. Price drove lower overnight, driving down into near last Monday’s high after the 8:30am PPI data showed producer prices higher than expected. As we approach cash open price is floating in the gap zone left behind last week.

There are no other economic events scheduled today.

Yesterday we printed a double distribution trend down. The day was about to begin with a slight gap up but just before opening bell sellers stepped in and started working the tape lower. By the open we were nearly flat and sellers continued their campaign, pressing down into last Friday’s volume point of control. Buyers defended here briefly before sellers resumed control and through steady selling took out last Friday’s low. Then we chopped along that Friday low until a late day push lower sent price down into last week’s pro gap zone.

Heading into today my primary expectation is for buyers to reject a move back into last Monday’s high, perhaps stepping in at the Monday gap level 15,832.75 and reversing the auction higher. Look for buyers to trade up through overnight high 16,132.75 and tag 16,146.50 before two way trade ensues.

Hypo 2 sellers gap-and-go lower, reclaiming 15,900 early on and sustaining trade below it to set up a move down to 15,800.

Hypo 3 stronger buyers sustain trade above 16,200 setting up a run to 16,300.

Levels:

Volume profiles, gaps and measured moves:

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The ghost of xmas past pays Wall Street a visit

We knew it was going to be a spooky week. And it seems the first matter of business, in keeping with the chronology set forth by Charles Dickens, was for the ghost of Christmas past to make his presence known in the global financial complex.

Yes if you recall, the first matter of business on this wretched quad witching week was to set a bonfire and burn up any theta held through the weekend by overzealous bulls pressing their luck with with short-dated call paper. The ghost of christmas past takes us back to our old mistakes to demean us. While cruel, this act is undertaken with kind intentions, maybe to rattle us out of our greedy ways.

Perhaps we’ll go a touch lower Tuesday, to give bears a semblance of hope for whatever it is those bad actor bears dream of. Revolution or, I dunno like miserly to those who rode alongside Time Magazines Person of the year all through 201 and made a mint.

But soon the ghost of Christmas present will come, and then we’ll be made to see all the fun stuff we’re missing while we toil away on these forsaken markets. Chop back up. More theta burnt. Mark time until the Fed annoucement Wednesday.

Then the ghost of christmas future. He won’t say shit, just sort of point at things and remind us of our mortality.

We’ll awaken with renewed purpose, driven to keep Tiny Tim alive. If only for another few more years until universal basic income kicks in.

The twist (there’s always a twist) is this tale has a fourth ghost. The quad witch. The ghost of the metaverse, here to meta pill anyone who has the gall to ask what if. What if, what if, what if…what if I really can be a degenerate raving virtual rabbit, riding around on a hover board in some gigantic dystopian cityscape high on the latest therapies out of Berlin?

Put me in a sensory deprivation tank and plug all my holes with haptics and set me adrift. That sounds really nice.

Okay for now,

Raul Santos, December 13th 2021

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