Auction theory models have been updated. Exodus members, be sure to read the latest Strategy Session.
The model offers a touch of guidance for the upcoming week. Keep an eye on the Russell 2000. The model is slightly bullish on the index. Expect the behavior of this small/midcap group to provide direction to the overall market.
REMINDER: Fed Beige book Wednesday afternoon.
ALSO: Lots of influential companies reporting earnings next week. Check your calendars and holdings.
Sun Sep 25, 2016 12:34pm ESTComments Off on My Thoughts on The Upcoming Week692
The month of September was good. It had 5 Thursdays and Fridays which is neat. The expiration of the September futures contract brought in some much needed volatility and offered me a chance to add some NASDAQs to my purse after a long stretch of scraping by.
Now it comes to a perfect end, on a Friday.
I work off statistics. And the only stat I have says we are exactly 67% likely to drift higher to start the week. So my inclination is we drift higher.
Under the surface rotations are drifting away from risk. The Utilities sector performed best last week as we made new highs across several of the major indices.
Cooler temps are settling into the north. This shift may prompt the squirrls to start storing their nuts for safekeeping during the winter, resulting in a rotation away from equities. However none of it seems threatening. At least not yet.
Finally, the first Presidential debate is Monday evening. There are bars across the city hosting live viewings. It is going to be lit. Whether the market reacts is uncertain, but the events of Monday evening are likely to tint the entire week.
Do not let it sway you. Keep your vision objective by relying on the information provided by actual order flow. Market behavior.
Exodus members, the 98th Edition of Exodus Strategy Session is published. It details the market data I will be closely watching and a funny but timely quote from Bill Belichick. Go check it out!
Sometimes after all the calculations and research we have nothing to show for it. In fact, this happens quite often in life and business. Months spent building proposals, paying consultants for legal and architectural support, visits with public officials, and nothing comes of it.
Totally fine. Part of the game. If it were as simple as some grunt work then everyone would do it.
But it isn’t. It takes relentless persistence. Failing, learning, succeeding, learning. Humility and patience, cheerful even when working with conniving and deceptive people you encounter every single day.
This week’s research has returned no bias. The 97th Exodus Strategy Session will provide you no edge in trading or investing. It highlights some interesting areas to watch, for guidance, but is otherwise just an exercise in routine.
Routine is my rock. It can be yours too.
Stay focused. The Fed will dictate market direction into the week’s end and perhaps the rest of the month. And you can glean insight from it if you remain objective.
Exodus members, I encourage you to check out the latest Strategy Session. It is live.
The central banks normally condemn the downward spiral-type trading that occurred last Friday. For some unknown reason, the markets were permitted to explore lower prices, and while doing so they revealed a severe lack of demand for equities.
In one trading session, sellers effectively moved the markets away from a two-month price range. Now the broad indices are trading at levels unseen since early July.
The price and volume behavior ranked worse that anything the auction theory model inside Exodus has ever seen. These extreme readings often tell a story of opportunity.
I just published the 96th Edition of Exodus Strategy Session, and inside it we discuss two potential trading scenarios for next week. Members, go check it out!
As for the rest of you. Buckle up. The model is calling for speed.
Institutions know most traders get discombobulated on the Friday before a quarterly option/future expiration and it tends to be a day wrought by heavy moves in price.
If the rally has been strong, a hard flush to blow out the directional call buyers. Conversely a down tape often experiences a rapid squeeze higher.
This is OPEX trickery at its best, and heading into Q4 big players are making a definative move down and away from the value we spent most of August building. Below you can see the value as printed on the NASDAQ:
The market tried twice to break the balance to the upside, to no avail. Now we are exploring lower prices aggressively.
For the last month, several metrics inside the tape have rhymed with November 2015. Panning out and observing the behavior, there are similarities and differences, but if we are embarking on another January 2016-type move, things could get ugly fast. Here’s the analog to work with:
On my end, I blew out several longer-term stock holdings after the first failed auction and I’ve been sitting like an old man, yelling at all the momentum traders. So I don’t have much else to do aside from waiting for my algos to nudge me back in.
In the futures, life is finally coming back, opportunity has reemerged on the tape (it always does, patience was wearing thin though).
This move is very much risk off and cautionary, with an active higher time frame who knows most investors/traders came into the day ill-prepared. Caution.
Sun Sep 4, 2016 2:01pm ESTComments Off on The Only Two Things That Matter Next Week813
Happy Labor Day everyone! I come bearing good news on this day of rest—the markets are super okay with these high prices.
Also, I just dialed the latest market data into my model and it is neutral. No bias.
Thus, we have no reason to suspect volatility during the upcoming holiday shortened week.
There are two things to be aware of. The first is Wednesday afternoon’s release of the Fed Beige Book. That might matter for like 5 NASDAQ points MAYBE.
The second is the potent compression on the NASDAQ Transportation index. I will treat any substantial break from this range as a bellwether for how the month-long balance in the overall market will resolve:
That’s all folks. Next week looks like a real snooze-fest unless some unknown event occurs.
Exodus members, go check out the 95th Edition of Strategy Session and may the Monday holiday bring refreshing vibes to your work.
It would be ideal to have a model signal heading into the last month of Q3 because everyone starts being serious again in September.
You had, all of you had 31 August days to grind and hustle while your competition sauntered around beach towns and hastily sent their children off to university. Now they will focus their efforts back on the accumulation of wealth.
Into this important week of stock marketing, the models are coming back neutral. It offers slight guidance, in the form of a 66.7% probability on the S&P 500.
This probability was the foundation of this week’s Executive Summary inside the Exodus Strategy Session. It shaped it. The slightly-better-than-a-coin-toss stat is the only hard data I have to work with.
Be ready for more balance play this week; working the edges until they ultimately break; and knowing when it’s time to start discovering new prices again. As always, we’ll take it one day at a time.
Exodus members, the 94th Edition of Strategy Session is live, go check it out!
I have spent the better part of Sunday calibrating the cogs and greasing the wheels inside the Exodus Strategy Session index model to ensure it deploys an accurate message.
After the scores were tallied and married to the learning algorithms of Exodus, the results are in:
Next week we drift, like a slow summer wind.
I know many of your were ‘treated’ to tree-bending winds, torrential rains, and biblical skies that made you seriously consider boarding the ark, but the robots are like, “not just yet, Mr. Robinson.”
The gritty details of how I expect this week to pan out are written in the Exodus Strategy Session, a weekly report published inside Exodus every Sunday about this time. You executive types, with your cocaine addictions and bastard children, may enjoy a quick read of the summary which takes every bit of data and coagulates it into two-to-three succinct sentences.
You are a busy person, and your pal Raul is going to take care of you.
In summary, lab results are in, and they are calling for more balance and drift on the top-side of the marketplace. Trade accordingly.
Distinguished members of Exodus, it is with humility and a child-like desire to learn that I present the 93rd Edition of Exodus Strategy Session. It is live now, go check it out!
Sun Aug 7, 2016 12:36pm ESTComments Off on The Dip Was Shallow – Model Suggests More Bull Market Action990
Greetings from the heart of iBankCoin laboratories. The morning rounds have been complete. The auction-theory machine has been calibrated and oiled and told it was special. In return, like an octopus picking the winner of the Super Bowl, we are being told the bull market will resume.
However, unlike some clairvoyant octo-ped, the model sets forth this forecast using logic–cold and dead mathematics. The numbers have their limitations, sure. Man’s quest to put a formula behind every happening in the universe is an attempt to understand that which we cannot–that which often times is best explained by the existence of Ancient Aliens. Still, it is our best means of objectivity, therefore it is our foundation stone for prediction.
Therefore after having to oblige the model and carry a short bias last week, which kind of worked out on paper but did not make me much money, the model and I are back on the bull squad.
Exodus members, the 91st Edition of Strategy Session is published. Be sure to check it out!
All the models have been updated, the algorithmic signals tracked and accounted for, and there is little to suggests a change coming for the markets. Instead the research suggests a continued drift of the calm and upward variety.
We have an FOMC rate decision Wednesday afternoon, but 97% of participants are priced for no change. Almost everyone is certain, through all the Fed-speak, that the FOMC is a predicable organization. Pair that with a decent start to earnings season and you have little reason for change.
The last week of July looks like another snooze-fest, perhaps best suited for chasing the narrowing pockets of momentum that are likely to show up, if only for overnight holds.
I may have jumped the gun late last week with my shorts. I do not believe in Starbucks and their China campaign. It is bound to fail as frauds and gross water taint their brand. So I shorted SBUX into earnings which is so far a losing proposition. I also took a position in the triple-lindy-inverse China ETF YANG. Both of these positions are subject to liquidation next week, given the model signals being generated.
As always, TBD.
Exodus members, the 89th Strategy Session has been published, go check it out!