Yellen and her league of bankers have done a good job of talking down any likelihood of a rate hike this week. 30-day Fed Fund futures [say that 5 times fast] are pricing a 97.7% probability rates stay unchanged this Wednesday:
Nevertheless, market direction will be revealed after the 2pm announcement, like it always is, when the algos send an EKG pulse through the marketplace. It’s like sonar. It blasts out, reads the sea bed [resting orders] then determines direction for the next 2-4 days. The more times you trade through it, the better you get at joining the winning team.
While we’re all at the mercy of our algorithmic overlords, there are still some subtle clues to glean from the financial complex before it all goes down. I have highlighted those little nuances in this week’s Exodus Strategy session, which I just published. It comes complimentary with our software, so members be sure to check it out!
Should a hike somehow be revealed, everyone will be crushed. Their faith in the continuous dialogue coming from The Fed will be shattered. Chaos will ensue–riots in the city center, bank runs, cats and dogs living in harmony!
But it probably won’t happen so enjoy a nice clamato on this springtime Sunday and chill baby, chill.
Wrestling legend Chyna passes away, then the Shanghai index drops over 2% the next day. Coincidence?
There are no signs Chyna intended to die, based on what police found inside her apartment — and she’d been deceased for at least a day … TMZ Sports has learned.
Law enforcement sources tell us there was no suicide note left in her Redondo Beach, CA home. We’re also told it appears the WWE legend had passed away a “day or two” prior to Wednesday evening … when a friend found her body. The last known contact she had with anyone happened on Sunday evening.
As we first reported … there were no illegal drugs, but officers did find legal prescription bottles. Our sources described the number of bottles as 3 or 4 … “nothing out of the ordinary.” Also, the bottles were not emptied.
We’re told several neighbors told investigators they suspected “overdose” as the cause of death since she’d seemed “under the influence” lately.
Forget about the cavemen in Saudi Arabia and Iran, living 200 years in the past, fighting over a low-value commodity with zero craft value. These troglodytes will continue to fart on each other for pleasure and throw their people off skyscrapers for eternity. Meanwhile, here in the United States, the best country on the strongest continent, we’re going to be hearing earnings from our supreme inventors: Google, Amazon, Microsoft, Netflix?! and more.
And while I have no clue what sort of reaction we’ll see after these names report, I know it will have a significant impact on where we price the NASDAQ. So I expect the index will lead our direction this week. Keep an eye on it.
Exodus members, the 74th Exodus Strategy Session has been published. Inside it I point to another layer of context that will be helpful to navigating the market next week, a potential industrial bellwether which could tip off the market’s hand before we see all these tech earnings unfold. Check it out!
As for the rest of yous, know this–USA taxes are due tomorrow. Do not be upset if you pay taxes. That means you’ve worked hard at your craft and it has earned you money. Taxes are not paying for something you don’t need or use. You literally live in the best governmental structure mankind have ever created. If you’re simply a W-2 Turbo taxer and due for a major refund [which you likely already claimed] shame on you–you’ve provided the government a zero interest loan all year. That money could have been in your savings account earnings 0.0025% man, wise up!
Bear in mind everyone, that tax day is often a pivot point in the market, so stay sharp.
The warm winds of seasonality, the gentle cues of the index model, and the downside tenacity of January and February have all contributed to an uninterrupted 2-month rally.
I took a shot betting against it, which was proven wrong and a losing proposition. Now model scores are back into grace land, readings so extremely high they usually portend sideways or slight upside action. It looks like the market is setting up for another week of volatility compression.
Last week I slowly made my way down to the southern tip of Florida, a place inhabited by rare birds and barracuda, while rarely checking in on the stocked exchanges. Why do you work extremely hard? I do it for freedom from corporate oppression and to satisfy my hankering for exploration. But soon I will be back to my turrets. I suspect the market will be teaming with opportunity to flip NASDAQ futures when I return, and it it my intention to gather said NASDAQS into my purse.
However this week is shaping up to be relaxing, docile, dare I say benign? Furthermore stock pickers know the rug pull is inevitable, but if they have participated thus far, this ought to be of little concern to them. Well done, especially to the Trade Lounge crew lead by Ragin Cajun and Option Addict.
Exodus members, the Exodus Strategy Session has been published. Be sure to check it out.
For two weeks I was bearish and wrong. This week I came in neutral, but Switchboard [coded context] keeps nudging its bias long, then back to neutral, flip-flopping, if you will.
The conditions are not conducive for trading inside-out. Trying to initiate directional trades is likely to chop you out. Instead you have to work from the outside-in, fading moves back to value.
Trading conditions like this mean markets are in balance. They are resilient against attempts higher and lower, and are structurally sound.
Aside from fading extremes, this type of action also lends itself to stock picking–a pastime I haven’t actively pursued yet this year.
All the data points to neutrality with a very slight bullish bias. The huge value areas in play are hard to bust loose from. Stock picking might be the move, but I am not participating. The markets are likely to remain in wait-and-see mode until we hear from the European Central Bank tomorrow, resistant to any directional attempts.
Frozen vanilla chai latte to my head, I have a short bias heading into the week, but my models are all coming in neutral.
It is worth noting I had a short bias for the last two weeks. That didn’t work out too hot. Being cold to this market kept me sidelined while epic squeezes took place in the energy industries.
I missed some action, fine. The good thing about trades is another one is always coming, just like buses in the city [not Detroit].
I closed my Walmart investment out late last week. It was sporting a failed auction and I don’t play around with failed auctions anymore. Plus Macke has been throwing mad shade on their share buyback program.
Anyhow these days, if a swing trade makes money it makes cents [sic] to book it. I collected a dividend along the way [old man swag].
Enough about me. Stocks exacted a serious amount of pain on short sellers and sideliners last week. FOMO is elevated but not radically strong. Sentiment is tepid, the wall-o-worry is alive and well, but I don’t like it.
I would rather be tactical, speed boating into position trades and jab, jab, hooking my way through the futures market. In short, I’m cashed up and neutral.
March fund flows have propelled this market like a banshee out through the gates of hell. All is well in stock land as Super Tuesday ramps up.
Calls [on my behalf] for lower market prices have been wrong. America instead gained 120 NASDAQS. Breadth has finally inched up into the stratosphere and by all signals this move is likely to spill into tomorrow.
The only hope left for bears is nob-systemic risk. Citron can still kill a stock fairly effortlessly, even in a strong tape, as they’re demonstrating in Tesla today.
Tesla has all sorts of problems, including a labor feud with the morons of Arizona over out-of-state employees. I digress.
March has decidedly turned positive for equities. All the grave concerns of the last two months are behind us. Much like the flu, the markets have come around and can now return to running naked in the wind.
Look for the rally to extend upon itself tomorrow, even if Trump beats Cruz in Texas.
Mon Feb 15, 2016 10:25am ESTComments Off on Five Things Every Trader Should Do on President’s Day1027
With the stock market closed on a working day, traders are wandering aimlessly, living a life without purpose. Instead of entering a Youtube worm hole, here are five things you can do on President’s Day to improve your trading.
Run a statistical analysis. Trading based on probabilities has made a huge difference in my ability to consistently execute. At first, when I attempted to trade statistics generated by other people, I found doubt would creep in, and I would lose my confidence. However when you develop you own stats–using data you obtain and scour–you will find yourself much more able to execute. Feeling lazy? Here’s a link to some statistical work I posted a while back: CLICK HERE FOR RAUL3 STUDIES
Pump Iron. Or take a walk, do something active! I love lifting weights for many reasons, mostly because I have masochistic tendencies. The other reason is my average trade duration is about 6 minutes. When I do a complicated lift, like the Turkish Get-Up, I need to focus on the motions of my body. If distraction creeps in I will injure myself. Developing this focus during physical motion allows me to focus entirely on the market when I am trading. The symbiosis is divine!
Read a book, but not some trading book. People always ask me what books I recommend for developing traders. They want like a technical analysis book or something, but I do my best to steer them toward Brain Books. They are figuring out so much about how our brains work these days. It is fascinating stuff, and it will help you improve your trading.
Clean like you’re covering up a crime scene. Your office, unless professionally cleaned weekly, is probably a disaster. Sandwiches gnashed and crumbed into nearby keyboards. Neglected paper piles that could be logged and filed in 10 minutes. Dust bunnies living in your computer tower. Just start in one corner of your room and before you know it, you’ll be cleaning like a damn fool. It’s good for the soul and you will feel lighter when it is time to get back into action.
Enjoy your freedom. I have no idea why some people work so hard, but I know my reasons. The harder I work the luckier I get but also freedom kicks ass. If you are not rank filed into a professional role where you are required to be stuck in a cube or meeting from 9-5, then go have some fun! Tour a vineyard. Spend time with family. Pump iron. Peer out your windows like a recluse. Whatever floats your boat.
The world runs on dead presidents. If you are a consistent trader you are probably a workaholic. Just make sure you are working for your own benefit, and not just for the sake of work. Happy President’s Day lads!
Sat Feb 6, 2016 11:17am ESTComments Off on The Dow Jones Will Save Us850
Two weeks running the Dow Jones has been a bastion of hope in an otherwise grim market. The index is fortified with steel and brawn and men of industry, not software nerds selling software designed to sell software. It is these men and their industry that will lead us out of the trenches and onto the offensive.
Look for physical industries like Machine Tools and Industrial Equipment to lead on the next bounce. I will only invest in companies servicing the United States, the only industrious nation that can hold its water when the going gets tough.
Investors are spooked. We have generational uncertainly in politics, the Chinese and other fake capitalist nations risk breaking their currencies, and oil is back to being a cheap sludge much to the chagrin of resource cursed Arabian nations.
The Utilities sector is up nearly 8% year-to-date. Certain REITs are doing well. Walmart, telecommunication, etc. If American social media companies are worth 30-40% less than we perceived them last month then Chinese social media stocks are damn near useless.
If you are itching to increase your equity exposure next week, look to the Dow Jones and its core components. Investors having been hiding out there. Conversely, they may be next to meet the guillotine if we decidedly turn lower. But at least for the next 5 market days, my data is optimistic.
More tomorrow after I complete the Exodus Strategy Session which was all over last week’s action.
Yesterday, after synthesizing the transnational behavior stock indices and powering through the net message stocks were sending with Exodus analytical engines, I posited we were likely to start the week soft. Specifically, the first sentence of the Thesis for The Week stated:
Sellers work down into the relief rally that took hold last week.
Then, I built on that overarching context during this morning’s report, where we used the new information the Globex session afforded us to develop specific actionable levels. The Primary Hypothesis was bang on:
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4247. Then look for a test above last Friday’s high 4253 however sellers step in ahead of overnight high 4260 and work us back down through the range to take out overnight low 4218. This sets up a move down to 4188.25 before two way trade ensues.
I bring your attention to my work not to pat myself on the back [I did not make any money trading today, I was busy] but instead to demonstrate how methodical this market is behaving. It has been that way all year.
A methodical market can be picked apart by the astute trader who consistently does their homework and then executes said work.
I have an overarching plan for this entire week, the tail end of which leaves from for some improvisation–like Chess [no wine, beer]. It can be read inside the Exodus Strategy Session.
Most of you are just sobering up after a weekend of snow-induced debauchery, but you can still gain some insight if you gather yourself. It looks like the fun is just getting started.