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Raul3

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

Earnings skip day – here is Wednesday NASDAQ trading plan

NASDAQ futures are coming into Wednesday with a slight gap up after an overnight session featuring elevated range on extreme volume. Price was balanced overnight, balancing along the lower half of Tuesday’s range. Major NASDAQ components Microsoft and Alphabet are +2% and -0.5% respectively in premarket trade after reporting earnings Tuesday night. At 8:30am durable goods orders came out in-line with expectations, and as we approach cash open price is hovering about -35 points below the Tuesday midpoint.

There are no other high importance organizations reporting earnings today.

Also on the economic calendar today we have crude oil inventories at 10:30am followed by a 2-year note auction at 11:30am and a 5-year note auction at 1pm.

Yesterday we printed a normal variation down. The day began with a pro gap up. Buyers drove into the gap up, working price nearly to all-time high within the first hour of trade. Price stalled 0.50 points away from taking out the high and before the market could go range extension up sellers stepped in. They reclaimed the mid and they closed the overnight gap. We spent the rest of the session chopping in the lower quadrant of range, sort of in the gap zone.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 15,541.50. Sellers continue lower, down through overnight low 15,507.25 before two way trade ensues.

Hypo 2 buyers press up through overnight high 15,592.75 and tag 15,603.75.

Hypo 3 stronger buyers rally price up to 15,674.25.

Levels:

Volume profiles, gaps and measured moves:

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Mr. Mark Elliot Zuckerberg kept a bid in the market // here is Tuesday NASDAQ trading plan

NASDAQ futures are coming into Tuesday gap up about +90 after an overnight session featuring extreme range and volume. Price was balanced overnight, steadily drifting higher in a balanced manner.  The move began shortly after closing bell Monday when major NASDAQ component Facebook reported earnings. The social media firm reported earnings slightly better-than-expected and announced a $50 billion dollar boost in share buyback authorization. Several analysts upgraded their price targets afterwards. Price action in the NASDAQ lifted to levels unseen since September 10th, and as we approach cash open price is hovering inside the 09/10 range.

Facebook shares are +1.13% in premarket trade.

On the economic calendar today we have new home sales and consumer confidence at 10am and a 2-year note auction at 1pm.

Major NASDAQ components Microsoft and Alphabet are set to report earnings after the bell.

Yesterday we printed a double distribution trend up. The day began with a gap up in range. After a brief open-test-higher sellers drove down into the range and resolved the overnight gap. Just below the gap fill responsive buyers stepped in and worked price back up through the daily midpoint. Price steadily ascended higher from here and by New York lunchtime price was range extension up. Price accelerated through the lunch hour taking out last week’s high before flagging a bit and then making another high. Price was fading off the high into the close before settlement action shot price back up to the daily high.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 15,513.25 before two way trade ensues.

Hypo 2 buyers reject a move into Monday high 15,541.25 setting up a run up through overnight high 15,612.25.

Hypo 3 buyers gap-and-go higher, trading up to 15,677.25 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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The calm // here is Monday NASDAQ trading plan

NASDAQ futures are coming into a busy week of tech earnings with a slight gap up after an overnight session featuring elevated volume and extreme range. Price was balanced overnight, balancing along the Friday midpoint. As we approach cash open price is hovering about +20 points above the Friday midpoint.

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

After the bell major NASDAQ component Facebook is set to report earnings.

Last week saw equity prices trend up Monday and then a continuation rally into Tuesday. The rest of the week was choppy along the weekly high.

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

On Friday the NASDAQ printed a normal variation down. The day began with a slight gap down in range. Buyers resolved the gap after a brief open two-way auction and worked a bit above it before finding responsive sellers who worked price down to the Thursday midpoint. Buyers defended the mid setting up a second push higher, a bit beyond the initial morning push. However this move stalled before 10:30am and before taking out the Thursday high. Sellers quickly regained the midpoint and then became initiative off the mid, pressing into an early range extension down. These sellers briefly took out the Tuesday-Thursday lows, poking into the Monday conviction range before buyers stepped in and worked price back to the mid. Sellers defended the mid twice and we ended the week chopping along the bottom-side of it.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 15,336. Look for buyers down at 15,300 and for two way trade to ensue.

Hypo 2 buyers to gap and go higher, trading up 15,438 before two way trade ensues.

Hypo 3 stronger buyers tag 15,500 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Step aside Jim, our dear tech leaders will handle everything

I think we can all agree the entire notion of a nation having power over the global economy is being rapidly forgotten by the collective consciousness of western minds.

There are edge cases. Rural outcasts mostly. People who will lose a fortune long DWAC as it craters into the single digits. Folks who desperately cling to an archaic ethos long after the music has stopped. But prevailing sentiment and thus the hearts and minds of our children and grand childeren recognize these to be the true leaders of Earth:

Things have certainly become more fragmented. Decentralized, if you will. Uniting the people under the banner of one fairy tale worked for hundreds of year after the Romans lost their grip on Europe. That formula even held up into the New World for a few hundred years thanks to fake history.

But then the internet came along. Pandora’s box was opened. The gatekeepers of information were rendered obsolete and now pirates and profiteers reign supreme in the high seas of the interwebs.

Or metaverse, if you prefer.

Lads I was here for all of it. The serendipitous birthright of anyone who hit the jackpot and was born into the mid 1980s. After all the bleak crack stuff and crony corporatism gutted our inner cities but before the cellular telephone or even caller ID. I took a front seat to the greatest enlightenment period humankind has ever experienced. An enlightenment that is still happening now.

Thanks to brave lads like Steve Jobs (RIP). Trail blazers who said FUCK YOU RONALD REGAN, we’re taking LSD and building time machines. Thanks to these code-typing rebels the mold was broken. Lines on a map man. The borders are in your mind.

Not mine.

I swear allegiance to no nation or its leaders. The only political leader worthy of any reverence is Treasury Secretary Yellen. And even hers is more-and-more digressing into something more ceremonial. Like Buckingham Palace.

What is happening now. Today. At this very moment. There are no more days off. In this very moment thousands of protocols are vying for power. Who is going to win?

We don’t know.

Okay for now.

Raul Santos, October 24th 2021

And now the 361st strategy session. Enjoy:


Stocklabs Strategy Session: 10/25/21 – 10/29/21

I. Executive Summary

Raul’s bias score 3.55, medium bull*. Choppy Monday. Then look for price rally all week long, fueled by earnings from Big Tech.

Facebook Monday. Microsoft, Alphabet (Google) and Twitter Tuesday. Apple and Amazon Thursday. All reports due out after the bell.

*extreme Rose Colored Sunglasses bullish bias triggered, see Section V.

II. RECAP OF THE ACTION

Trend up Monday. Continuation Tuesday. Choppy for the rest of the week.

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

Rotational Report:

Super low quality leadership last week. Perhaps Tech will assume leadership in the coming week.

neutral

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

Concentrated Money Flows:

Eight weeks back we had a major bullish skew that was never negated. Then last week we had another major bullish skew.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Indexmodel might need to go in for maintenance

I was eyeballing recent data. Via the oscillator I keep on a spreadsheet. And it seems like the thresholds may need a tweaking.

I do not like ‘moving the goal posts’ on an algorithm/model. There is a risk of curve fitting the system to past performance when these types of tweaks are made. That is why I do not react quickly to oddities in the data.

Part of me expected to see a Bunker Buster signal during the September/October dip. That never happened. Which is fine.

But these RCS bearish signals. That may need to be addressed. They pose a risk to my performance.

I shall ponder making these tweaks into year-end. For now the model remains unchanged.

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:

Choppy Monday. Then look for price rally all week long, fueled by earnings from Big Tech.

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]:

Overplay for the underlay

Markets fluctuate between two states—balance and discovery.  Discovery is an explosive directional move and can last for months.  In theory, the longer the compression leading up to a break, the more order flow energy to push the discovery phase.

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

Transports are in a steep discovery up. I expect buyers to continue to explore higher prices in the coming week.

See below:

Semiconductors more-and-more appear to be setting up the ‘overplay for the underlay’. What this set-up essentially equates to is a super-obvious chart setup (rising wedge) breaks lower. All of the technical analysis textbooks say this is a bearish set up. So it breaks lower. Some buyers liquidate their longs. Some short sellers position for further downside.

Then price rips up beyond the wedge and explores higher prices.

My primary expectation is that the PHLX semiconductor index is set up for an overplay for the underlay.

V. INDEX MODEL

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

We had a Bunker Buster thirty four weeks ago.

Extreme Rose Colored sunglasses calls for a sideways drift, perhaps with a slight upward bias.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“Make every detail perfect and limit the number of details to perfect.” – Jack Dorsey

Trade simple, simplify everything

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Little dip into Thursday // here is NASDAQ trading plan

NASDAQ futures are coming into Thursday with a slight gap down after an overnight session featuring normal range and elevated volume. Price was balanced overnight, bouncing along the lows of Wednesday and briefly probing below them. As we approach cash open price is hovering inside the Wednesday lows.

Also on the economic calendar today we have existing home sales at 10am followed by 4- and 8-week T-bill auctions at 11:30am. There is also a 5-year TIPS auction at 1pm.

Yesterday major robotics company and NASDAQ component Tesla reported stronger-than-expected earnings, posting a third quarter profit of $1.62 per share vs $1.58 expectations. TSLA shares are about -1.4% in premarket trade.

After the bell today Intel is set to report earnings.

Yesterday we printed a normal variation down. The case could be made that it was a neutral day, but only on a slight technicality. Price did briefly go range extension up just after 10:30am. Very briefly. Soon after sellers took control of the midpoint and from noon onward they defended it, eventually pushing us into a range extension down that push down near (but did not exceed) the Tuesday low. Price sort of chopped along the bottom-side of the midpoint after that and into settlement.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 15,358.50. Look for sellers up at 15,400 and for two way trade to ensue.

Hypo 2 stronger buyers push up through Wednesday high 15,446.50 and tag 15,450 before two way trade ensues.

Hypo 3 sellers push down through overnight low 15,301 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

Comments »

Stepping back

I am feeeeling very fragile this weekend. There are all sorts of nice folks here on the interwebs and I appreciate the interactions. I cannot describe what is going on any more than saying ma vibe is off.

I am going to be off the desk through Tuesday. Maybe by Wednesday I’ll wiggle myself back into tune.

Okay for now.

Raul Santos, October 17th 2021

Here is the 360th Strategy Session. Enjoy.


Stocklabs Strategy Session: 10/22/21 – 10/18/21

I. Executive Summary

Raul’s bias score 3.43, medium bull*. Selling pressure early in the week. Then look for markets to pivot higher either Wednesday or Thursday, perhaps fueled by Tesla and Intel earnings.

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

II. RECAP OF THE ACTION

Little rally Monday morning was faded through Tuesday. Choppy but up slightly Wednesday. Strong rally Thursday with some follow-through strength Friday and into the weekend.

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

Rotational Report:

Materials lead the way. Not great. But they were flanked by Discretionary and Tech and sectors were up across the board.

slighty bullish

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

Concentrated Money Flows:

Seven weeks back we had a major bullish skew and that really hasn’t been negated yet. Last week the ledger skewed slightly to the positive side but not in a major way.

slightly bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Indexmodel pinned bearish?

I am beginning to wonder if the tweaks to Stocklabs algorithm are leading to IndexModel producing all these bearish biases.

I have to see how the performs these next weeks, but my antenna is definitely tingling.

Something might need to be tweaked. I will leave everything untouched for now.

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:

Selling pressure early in the week. Then look for markets to pivot higher either Wednesday or Thursday, perhaps fueled by Tesla and Intel earnings.

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]:

Clean levels heading into next week

Markets fluctuate between two states—balance and discovery.  Discovery is an explosive directional move and can last for months.  In theory, the longer the compression leading up to a break, the more order flow energy to push the discovery phase.

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

Transports might be starting a new leg of discovery. They are coming into the week right on the golden Fibonacci level from the entire down move that began in May.

See below:

Semiconductors broke down from the rising wedge. Heading into next week price is returning to the scene of the breakdown, which aligns nicely with the Fibonacci also.

I speculate that the breakdown may have done wonders to stop out some traders and this key index may resume its uptrend.

But for now we can monitor this level and assess whether we are still in balance or instead resuming discovery up.

Intel earnings Thursday after the bell may give clarity to this situation.

V. INDEX MODEL

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

We had a Bunker Buster thirty three weeks ago.

Indexmodel keeps flipping between neutral and bearish and I am slightly skeptical of the data.

Here is the current spread:

VI. Twelve Month Hybrid Oversold

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

VIII. QUOTE OF THE WEEK:

“Man is not above nature, but in nature.” – Ernst Haeckel

Trade simple, relax

Comments »

Sold the american franchisor; bought the german hedonist

I spent more than a year long Del Taco only to take a small loss on the position today. My thesis was sound:

This place makes delicious tacos using Beyond Meat and you can also buy crinkle cut french fries. CRINKLE CUT. They are the crack. Their restaurants are the right format to serve folks weary of the COVID bug. There is room for so many more of their shops throughout fat america. This is a growth story that just perfectly fits our current environment.

I listened to the  conference call this morning using the QUARTR app which you should all go download right now. It is an amazing app for working through conference calls, which are really quite interesting. You can skip right to Q&A and they have transcripts. I have no idea how this app is free.

Anyhow I’m listening to the Del Taco conference call whilst doing leg lifts in front of my 70 inch Samsung television, watching dozens of delicately interconnected securities drift along as I keep my core tight and clean. Discussion between the Wedbush analyst and management made it obvious minimum wage is killing them and I don’t see that trend changing course since Universal Basic Income is inevitable.

A huge crispy chicken campaign. Attempts to gain exposure to high-density regions like downtown Los Angelas. Have you been to LA? The best taco snacks you’ve ever had in your entire life.

If they focused on making beyond burritos and their delicious crinkle cut fries available at high volume throughways and via delivery apps I would be all about Del Taco. But I sense a whole lot of tone deafness on the executive team and I left.

Meanwhile, I invested into a biotech company in Berlin that is developing therapies using ketamine, nicotine, MDMA and ibogaine; basically all the drugs us degenerate ravers have used recreationally since the ’90s. Some of the world’s finest hedonists live in Germany. And I’d be so brave as to say the period of Bavarian enlightenment chronicled by Herman Hess to be one of the most meaningful advances in human psycho-technologies over the last 150 years. I like the idea of them heckin’ sex loving Germans being free to tinker with a bunch of really nice chemicals in the name of therapy.

Therefore I swapped out a long-term investment in TACO for one in ATAI.

The way biotech has struggled these last several months reminds me of how energy was totally wrecked during The Great Valentine’s Day Massacre flush:

Remember how we went long WES and PTR then? And have continued to be bullish on oil since? Despite conventional thinking being that oil plays would suffer under Joe ‘Executive order’ Biden?

Same approach here.

Just dumped Del Taco at the same time and it seems funny to compare a tone deaf fast food executive to an ambiguous german drug dealer.

Okay for now.

Raul Santos, October 15th 2021

Comments »

Semiconductors buttressed by $TSM earnings // retail sales strong // here is Friday NASDAQ trading plan

NASDAQ futures are coming into Friday up a modest +50 after an overnight session featuring elevated range on extreme volume. Price was balanced overnight, balancing up above the Thursday high. We briefly traded up into the 09/27 range. At 8:30 am retail sales data came out stronger than expected, and as we approach cash open price is hovering just below the 09/27 lows.

Major NASDAQ component Taiwan semiconductor reported stronger-than-expected earnings on improved margins. Shares of the chip maker are +2.44% in pre-market trade.

Also on the economic calendar today we have business inventories and consumer sentiment at 10am.

Yesterday we printed a trend up. The day began with a pro gap up and after a brief two-way auction outside range price drove higher, pausing for a bit along the 10/07 VPOC before continuing to campaign higher. Price chopped along the 09/28 high for a few hours before ramping up into open air into the close.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 15,112.75 on the way to tagging 15,141.

Hypo 2 stronger buyers close the 09/27 gap up at 15,185.50.

Hypo 3 sellers work down into overnight inventory and close the gap to 15,049 then take out overnight low 15,020.75 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ stabilizes overnight, here is Wednesday trading plan

NASDAQ futures are coming into Wednesday with a slight gap up after an overnight session featuring extreme range and volume. Price was fairly balanced overnight, bouncing along the weekly lows a two-ticking below them briefly before a little 3:30am rally saw price decidedly return to the Tuesday midpoint. At 8:30am CPI data came out in-line with expectations. As we approach cash open price is hovering along the Tuesday midpoint.

Also on the economic calendar today we have a 30-year bond auction at 1pm. Then at 2pm we have a Treasury statement along with the FOMC minutes.

Yesterday we printed a normal variation down. The day began with a gap up in range. Sellers quickly resolved the overnight gap and then took out the Monday low. Sellers held the mid for the rest of the session and we chopped below it until settlement period when sellers pressed price back down to the lows.

Heading into today my primary expectation is for buyers press up to 14,800 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 14,613.50. This sets up a move down through the overnight low 14,586 before two way trade ensues.

Hypo 3 stronger sellers liquidate down to 14,500.

Levels:

Volume profiles, gaps and measured moves:

Comments »

NASDAQ reclaims Monday range // here is morning trading plan

NASDAQ futures are coming into Tuesday with a slight gap up after an overnight session featuring extreme range and volume. Price initially drove lower overnight, pressing down through the Monday low and about a quarter of the way into last Wednesday’s range. Then price stabilized and we balanced below the Monday range until about 4:45am New York when buyers reclaimed the lows. Since then price has rallied to tag the Monday midpoint briefly, and as we approach cash open price is hovering along the Monday lows.

On the economic calendar today we have JOLTS at 10am, 6-month bill nd 3-year note auctions at 11:30am. Then we have 3-month bill and 10-year note auctions at 1pm.

Yesterday we printed a neutral extreme down. The day began with a gap down below the prior two days ranges. After a brief open auction outside range buyers stepped in and drove higher, effectively closing the overnight gap and continuing higher up through last Friday’s midpoint. Buyers stalled after a brief range extension up and sellers pounced on the tape. Said sellers reclaimed the daily midpoint by about 1:15pm and the defended the mid, setting up a liquidation into settlement that pushed us into a neutral print.

Heading into today my primary expectation is for buyers to press up to 14,859 before two way trade ensues.

Hypo 2 stronger buyers test above Monday high 14,897.25, setting up a run to 14,950.

Hypo 3 sellers press down through overnight low 14,586.50 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

Comments »