Righty-o lads I hate to issue some fud but the model is the model and it is bearish heading into the first full week of Q2.

If I had my tools I would be using this signal to sell short any up gaps in range, with the explicit intent of closing said gaps. In the /nq.

On the tool front I have a good lead on some raw data. I had to screen a call from a decent chap who phoned me to get me set up because I was in the middle of a heated negotiation for a work van.

Work van fell through. Feller wanted 1800 (about 0.50 eth). I spent the morning collecting some debts owed to my person and then I picked up a refurbished battery from the local battery mart for 60 and then I commissioned elder Raul to drive me to the land of the libs, ANNED ARBOR.

We show up. Mf has like 800 chickens. Not going to lie I was impressed. Beautiful cocks everywhere.

The vans a real pile of shit. Windshield had been letting water in all winter and the rugs were soaked. The whole thing smelt like grease. There was debris everywhere. Fine. I am a draconian cleaner and you wouldn’t believe the messes I’ve fixed.

I’m the fixer. The wolf.

Popped the hood. The rubber shoe between the air filter and the motor is tattered and in pieces, thus allowing the devil knows what to be sucked into the motor.

Fine. This piece of shit just needs to last long enough for elon to deliver me from evil via the CyberTruck.

Put the battery in. Starts right up. I say, “Right then. We have some unexpected things happening here. Would you take 1300?” We do the old back-and-forth, settle at 1400.

I hand him the cash. He hands me the title. I put the pile in reverse and good lord, an unholy sound comes from the rear end. Turns out one of the tires is totally seized up. Won’t spin. I renege. Say farewell to the chickens and sell him the battery for cost.

Then elder Raul and I fight dense traffic for over an hour back to DETROIT, bitching and joking the whole hecking time.

European men (and perhaps women) like elder Raul will never be content with the american driver. They misuse the fast lane. They’re general sense of urgency is too low. They cannot seem to do anything right. Which is why I drive and he sits, because if that wild old man is behind the driver’s seat you’re a captive audience for some rage.

Wow, what an aside.

Okay so anyhow model is bearish. Barring some hasty trip into the woods I should have my tools back in place next week, and what else? That’s about it I suppose. The vibe around the city is impeccable lately. Beautiful birds are coming out of the wood work, ready to disco dance and mate.

Raul Santos, April 3rd 2022

And now for the 381st strategy session, enjoy.

---

Stocklabs Strategy Session: 04/04/22 – 04/08/22

I. Executive Summary

Raul’s bias score 3.20, neutral*. Sellers reassert control early on. Then look for third reaction to Wednesday afternoon’s Fed Minutes to dictate direction into the second half of the week.

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

II. RECAP OF THE ACTION

Strong tape through Tuesday, then faded lower clean through the Friday lunch hour. Then a strong ramp higher into the weekend.

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

Rotational Report:

Second consecutive week of bleak rotations. Utilities and Staples strong suggests investors remain risk averse despite the recent rallies off the lows. Financials under pressure.

slightly bearish

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

Concentrated Money Flows:

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

Last week’s flows skewed slightly negative after being balanced two weeks back. Lots of semiconductor groups populating the negative side of the ledger.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

April stats and recent changes in hybrid scores have me reluctantly bearish next week

The April seasonality statistics are strong. And on March 29^th we saw a huge print from the Hybrid Chg % (+22.28% **see Algo page**). These two data points cannot be completely overlooked.

However, Indexmodel is signaling Rose Colored Sunglasses and we do not have an Stocklabs cycles in play heading into the week.

For these reasons I will be leaning bearish until at least the Fed Minutes Wednesday afternoon. Then I will reassess.

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:

Sellers reassert control early on. Then look for third reaction to Wednesday afternoon’s Fed Minutes 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]:

Big battle for control of Transports

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 probed the upper end of range and found strong sellers. Sellers so strong they erased much of the conviction buy candle we printed on 3/16. There was a slight lower wick on the strong Friday sell candle, but that is not much for bulls to lean on. This key contextual index could careen into the low-end of balance and perhaps then we’ll see if range can hold.

See below:

Semiconductors didn’t manage to hold the top-side of their range pivot for long. Sellers reclaimed the level Friday. Again, there was a nice lower wick on the Friday candle that bulls may lean on. This index is clearly in range.

Ether is having a modest discovery up phase. I am not certain if it has the velocity to really begin exploring higher prices, but there is a low-volume-node around 3,680 that could behave as a magnet to draw price higher next week.

V. INDEX MODEL

Bias model is rose colored sunglasses bearish after two consecutive weeks of extreme RCS. This is a bearish signal that expects sellers to control the tape for much of the week.

We were Bunker Buster ten reports back. This is the second Bunker Buster in recent history, with the previous one being eighteen reports back. The Bunker Buster before these recent two was fifty-six weeks ago.

Rose Colored Sunglasses calls sellers to pressure the tape lower throughout much of the week.

Here is the current spread:

VI. 6-month Technical Overbought

On Thursday, March 17^th Stocklabs went technical overbought on the 3- and 6-month algo. This is a ten day bullish cycle that runs through Thursday, March 31^st. Here is the final performance of each major index over the cycle:

VII. QUOTE OF THE WEEK:

“It is not enough to have great qualities; we should also have the management of them.” – La Rochefoucauld

Trade simple, manage yourself or else

Comments »

Research updated. Conditions look decent for volatility to keep drifting away.

What else, what else.

Oh I held a meet-up last week on behalf of Stocktwits. They keep sending me boxes of hats and t-shirts and they’re paying for the pizza and hootch. Alls I have to do is find a venue and do a little ditty on meetup.com and bingo bango — I’ve satisfied their demands.

I was just baffled by a few of the jokers at the meetup. So hecking bearish. I cannot help but fade people when they’re so certain of themselves.

Like my idol Elon, who makes all sorts of wild predictions, speaks with way less certanty than some piker pushing five-figure trades on Robin Hood.

Fading these fools at every chance.

Aside from the free hootch that is why I’ll organize these meet-ups. It is a wonderful litmus test. Another reading for my contextual model.

What else.

Last week was my first full week back in the gym training. Felt good man. My core was stronger than I expected. Perhaps the wretched floor project kept me abs tighter than I realized. My weakest quadrant has been identified (lower right, likely the arthritis building up from all the digging). My weakest muscle group, by far, were the chest and triceps. Those aren’t really vanity muscles, but for whatever reason they don’t see much use in a normal man’s working day.

I mean, some desk jokey is probably just weak everywhere, but as a man of work it seems my back and legs stay jacked but my chest and triceps take a hit. I should be back to an absolute terror of build in six weeks time. Just in time to go back to the fields.

What else…

I am very close to turning my data and tools back on. I have a bit of side work to attend to next week but I should be back to daily trading sometime this month.

What else?

Seasonality is strong heading into April. My primary expectation is for some window dressing into quarter end and then perhaps a real ripper of a rally Friday, the first of the month.

That’s all I’ve got for now.

Oh one more thing. I am reading the new Dalio book, Principles for Dealing with the Changing World Order.
Decent read so far. He essentially takes tons of factors and ranks them from 1-to-ten. Sound familiar?

I’ll leave it at that for now.

Raul Santos, March 27th, 2022

And now the 379th edition of Strategy Session.

---

Stocklabs Strategy Session: 03/28/22 – 04/01/22

I. Executive Summary

Raul’s bias score 3.48, medium bull*. Volatility continues to abate as equity prices drift into month-end. GDP data out Wednesday morning and non-farm payroll data Friday may provide some direction.

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

II. RECAP OF THE ACTION

Steady drift higher in the tech-heavy NASDAQ while the other indices essentially marked time.

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

Rotational Report:

Rotations last week were not great. The leadership in Materials and Utilities suggests investors remained risk averse despite the dip in volatility seen last week. Tech was not too far behind though. Energy continues to trade independent of the overall market.

neutral

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

Concentrated Money Flows:

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

Last week’s money flows were fairly balanced. However the industries populating the positive side of the ledger are hardly quality.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

April is statistically the most bullish month of the year

Investors were granted a bit of relief the in the last two weeks. Now we are headed into the final week in March (first quarter) and up ahead we have solid seasonality statistics. Past performance is not indicative of future results, but a glance at SPY seasonality shows an average return of +2.40% with markets higher on the month 79.31% of the time.

If buyers manage to hold the tape up through Wednesday’s GDP reading, we could set the stage for a strong rally Friday morning into the next quarter. We may even see some “window dressing” take place ahead of Friday.

Non-farm payrolls are sort of like the river card on the week, and could either solidify a bullish week or be the catalyst for a reversal lower.

We don’t know.

But stats are looking bullish.

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:

Volatility continues to abate as equity prices drift into month-end. GDP data out Wednesday morning and non-farm payroll data Friday may provide some direction.

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]:

Pivoting the range in semiconductors

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 appear poised to continue probing the upper-end of their established range.

See below:

Semiconductors wrestled with the range pivot we’ve been monitoring. During the last three days of last week there was quite the battle for this territory. The upper wick on Wednesday’s daily candle and lower wick on Friday’s reveal this. Heading into next week it appears buyers have the edge.

Ether surprised us last week, breaking free from its range compression and going into discovery up. There is a potential new range a bit higher as well as a low-volume node that may behave as a magnet.

V. INDEX MODEL

Bias model is extreme rose colored sunglasses for the second consecutive week. The e(RCS) seen two weeks back being the first such reading of 2022.

We were Bunker Buster nine reports back. This is the second Bunker Buster in recent history, with the previous one being seventeen reports back. The Bunker Buster before these recent two was fifty-five weeks ago.

Extreme Rose Colored Sunglasses calls for a calm drift, perhaps with a slight upward bias next week.

Here is the current spread:

VI. 3-month Hybrid Oversold

On Friday, March 11th Stocklabs went hybrid oversold on the 3-month algo. This is a ten day bullish cycle that runs through Friday, March 25th, end-of-day. Here is the final performance of each major index over the cycle:

VII. 6-month Technical Overbought

On Thursday, March 17^th Stocklabs went technical overbought on the 3- and 6-month algo. This is a ten day bullish cycle that runs through Thursday, March 31^st. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“One of the symptoms of approaching nervous breakdown is the belief that one’s work is terribly important.” – Bertrand Russell

 

Comments »

Honest Job here. Still being put through the ringer. But at least we stuck to our guns last week.

Funny how much less dicey the dip looks once we’re off the lows…

I do not have much to say. My enemies are many and they want to see me suffer. That simply cannot be.

This afternoon I will march du Nain Rouge, to pay homage to the devilish little dwarf that hides in the trees of Detroit, warning of disaster and fending off outsiders.

Markets sent the potential all-clear signal for the first time since this route began back in November. You’ll see what I mean if you read this week’s strategy session.

Let Stocklabs be thine guide, Indexmodel thine compass, and morning trading reports thine map.

I will be back to morning trading reports real soon. Just you wait.

Then just sort of make your way through the worldt. No one’s master. No one’s slave.

Model calls for a drift along last week’s highs. It may be choppy at times, but primary expectation is for us to be flat/higher by end-of-week.

Swing away lads.

I like the idea of taking an earnings gamboll on ADBE (reports Tuesday, after the bell).

Okay for now.

Raul Santos, March 20th, 2022

And now for the 379th edition of Strategy Session.

---

Stocklabs Strategy Session: 03/21/22 – 03/25/22

I. Executive Summary

Raul’s bias score 3.93, medium bull*. Volatility melts away as markets hold onto last week’s highs in a sort of sideways drift.

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

II. RECAP OF THE ACTION

Hard selling through Monday, putting equities on the lows to start the week. Strong rally all through Tuesday erases Monday’s losses. Gap up Wednesday, which eventually faded ahead of the Fed. Fed hiked 25bps Wednesday afternoon and third reaction was up. Strong sustained rally through the rest of the week.

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

Rotational Report:

Rotations were strongly bullish after three consecutive weeks of clear bearishness. Tech and Discretionary out in front, just exactly what bulls want to see.

bullish

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

Concentrated Money Flows:

After sixteen weeks of money flows being dominated by sellers, with a few mild bull flows peppered in, last week finally printed a strong buy flow. The action last week could effectively overpower the strong selling flows we’ve been seeing since late November 2021.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

That Monday Fake-out Was One for the books

Read back to last week’s Section III. The conditions were right for a dramatic move early in the week to be a ‘fake’ move. Not fake as in not actually occurring but unlikely to carry through the entire week.

That hard sell Monday was bleak. It was plunging into the lows across the board. Musk was challenging Putin to single combat. Rate hikes were on the horizon.

Set all of that aside. The calendar was on a quad witching. Stocklabs was hybrid oversold. IndexModel was neutral. These cold, dead facts, things our logic centers can lean on when the world at large seems a mess, were saying, “watch for a fake-out”.

That is why we do these boring reports every Sunday, and another report every morning if we’re actively day trading. The repetition and routines are all designed to keep us aligned with what we can control, our execution.

We cannot control the markets. Geopolitics, or even message boards (unless we pander to the crowd).

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:

Volatility melts away as markets hold onto last week’s highs in a sort of sideways drift.

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]:

Pressing range highs

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.

Funny how much more clear a range looks once we move away from the edge. Now Transports has a bit more room of upside but are clearly still in range.

See below:

Semiconductors are nearing the pivot zone of their range. It will be interesting to monitor this key index as we head into next week. Range is the call for now, with potential to run higher.

Ether is also in range, but near the top-end. The primary expectation is for range to hold and continue to coil by rotating lower. There is also the less likely potential for a discovery phase higher.

V. INDEX MODEL

Bias model is extreme rose colored sunglasses for the first time in 2022 after being neutral last week and ose Colored Sunglasses bearish two weeks back. The model was neutral for three weeks prior to that bearish signal. We were Bunker Buster eight reports back. This is the second Bunker Buster in recent history, with the previous one being sixteen reports back. The Bunker Buster before these recent two was fifty four weeks ago.

Model calls for a  calm drift, perhaps with a slight upward bias next week.

Here is the current spread:

VI. 3-month Hybrid Oversold

On Friday, March 11th Stocklabs went hybrid oversold on the 3-month algo. This is a ten day bullish cycle that runs through Friday, March 25th, end-of-day. Here is the performance of each major index so far:

VII. 6-month Technical Overbought

On Thursday, March 17^th Stocklabs went technical overbought on the 3- and 6-month algo. This is a ten day bullish cycle that runs through Thursday, March 31^st. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“The best plan is only good intentions unless it degenerates into work.” – Peter Drucker

Trade simple, WORK

Comments »

Sometimes one gets the feeling they’re like honest Job. Constantly being put to the test by higher powers who are having an ego contest.

I’ve made no claim of being a gentle human. I work hardt and that means I tear through machines. I broke a hoe last summer. Broke a hoe the summer before that too.

In the last 12-or-so months I’ve lost the use of many pieces of equipment I hold dear. Then they cut my data feed on January 1st and I’ve essentially taken the entire first quarter off from trading.

Maybe it was for a reason. Maybe I’d of blown my accounts to Timbuktu had I been working the opening bell all these winter mornings. We don’t know.

But I do know I’ve nearly rounded the bend on Raul’s cabin-in-the-woods floor project and I bought a new mattress. I bought a new mattress and will be done doing bastard flooring soon and when I’m done doing stupid flooring I may never do another floor again. I plan to ease off the hootch a bit. Get back into hot yoga and naps and maybe swim some laps and certainly get back to work trading futures.

I think all this tension will sort of melt away. At least here in America. As festival/carnival season picks up. Folks will forget about the stupid pandemic, they’ll grow tired of war reporting, and the stock market could start to mellow out into the conditions where I thrive.

Listen I get it. There are a few, extremely vocal accounts out here who would love nothing more than to see total war and chaos and death on a horrific scale. They seem like they are the majority sometimes, but I can assure you they are not. They just make more noise than the silent majority of humans.

Folks just want to be happy and healthy and make money and have good sex.

That’s it.

Soon we’ll remember these feelings and *poof* we’ll be back to stellar vibes and steady gains.

Okay for now,

Raul Santos, March 13th 2022

And now the 378th edition of strategy session.

---

Stocklabs Strategy Session: 03/14/22 – 03/18/22

I. Executive Summary

Raul’s bias score 2.58, medium bear. Buyers show up early on and begin working price higher. Then look for third reaction to the Wednesday afternoon FOMC announcement to dictate direction into the second half of the week.

II. RECAP OF THE ACTION

Hard selling through Monday. Relief rally Tuesday through Wednesday nearly erased Monday’s losses. Sellers stepped back in Thursday and pressured the tape lower into the weekend but did not take out the lows set earlier in the week. There was a bit of relative strength from the Russell 2000.

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

Rotational Report:

Rotations still looking bearish. Having been clearly bearish for three consecutive weeks, one begins to wonder if a strong bullish set of rotations is coming soon.

For now, bearish.

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

Concentrated Money Flows:

Money flows have been dominated by sellers for the last sixteen weeks.  There have been a few slightly positive skews in recent weeks but nothing strong enough to negate the selling.

Last week’s money flows were again dominated by sellers.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Quad-witching, watch for fake outs

With volatility already high I am heading into the March option expiration skeptical of any big directional moves. There is a tendency for these expiration weeks to make a lot of noise, moving hard one direction only to undo the action later in the week.

We also have the FOMC meeting Wednesday which is a “hot” meeting. We are likely to see a 25 basis point rate hike. However investors will be listening for clues as to the pace of additional rate hikes this years.

Overall it could be a tricky week. There is nothing wrong with stepping aside until more favorable trading conditions arise.

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 show up early on and begin working price higher. Then look for third reaction to the Wednesday afternoon FOMC announcement 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:

N/A (did not update model)

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

Pressing into range lows

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 lost the balance zone slightly above current prices but is still somewhat in balance.

See below:

Semiconductors are really pressing into range low, and in doing so they erased a failed auction buyers had going for them. This thing could go into discovery down next week and take the whole market with it. Or, range will hold. We’re coming into the week right on the edge of a breakdown.

Ether is still compressing into value. This chart could make an explosive move soon. There is certainly lots of energy building.

V. INDEX MODEL

Bias model is neutral after being Rose Colored Sunglasses bearish last week. The model was neutral for three weeks prior to that bearish signal. We were Bunker Buster seven reports back. This is the second Bunker Buster in recent history, with the previous one being fifteen reports back. The Bunker Buster before these recent two was fifty three weeks ago.

Model is neutral heading into next week. No bias.

Here is the current spread:

VI. 12 month Hybrid Oversold

On Wednesday, February 23rd Stocklabs went hybrid oversold on the 6- and 12-month algo. This is a ten day bullish cycle that runs through Wednesday, March 9th, end-of-day. Here is the performance of each major index so far:

VII. 3-month Hybrid Oversold

On Friday, March 11th Stocklabs went hybrid oversold on the 3-month algo. This is a ten day bullish cycle that runs through Friday, March 25th, end-of-day.

VIII. QUOTE OF THE WEEK:

“If the world were a logical place, men would ride sidesaddle.” – Rita Mae Brown

Trade simple, expect chaos

Comments »

I was thinking back to December today. I went down to Miami beach, to art basel, and I was actually pretty low on cash at the time what with the holidays and just the timing of life, etc, etc.

But I wanted the dang Pudgy Penguins t-shirt they were giving out, and I wanted to drink my fair share of the free gin. NFTs are not all the same. Some do their best to offer utility. I would hardly say Pudgy Penguins “did their best” but I will say that having a free party with hootch is a value to me, because I can drink like a sailor.

Meeting internet people in real life is always weird. This one dude was so hopeful for the penguins and his wife was with him and I told him with cold indifference that we were entering a bear market and it was going to last four years. I saw the fear in his eyes, and his wifes. Who was this pony tailed pretty mother lover? Talking greasy and drinking gin?

A few weeks later I hosted a meetup at the request of Stocktwits. I don’t particularly enjoy hosting these events so I do my best to make it worth while for myself. I put together a presentation called Terrific Bubbles. They give me a mic, and I spent an hour talking about how we were in a raging speculative bubble, and that’s fine, and investing at these levels is FINE. If, and only if you stick to quality. Basically pointing out how buying Microsoft or Apple at the pico-top of the dot com bubble was still a huge win as long as you didn’t fumble the bag.

The same is true in NFT. So so many of them are worthless. Yes. But there are a select few that are absolutely not worthless and are the biggest opportunity for a normal joe to make life-changing money.

Everyone wants to invest in the next Uber or whatever. But actually doing that. In america. In 2022 is not possible. The fucking SEC puts up walls that only allow the already rich to take on these type of investments. Accredited Investors. Series A. B. C. D. Fuck you poor mother fucker you buy UBER or RIVN only when the rich fuckers are ready to cash out onto the public markets.

Serious bullshit. I’d rather spend six hundred fiat to mint a picture of a deer smoking a blunt and shooting rednecks then buying some silicon valley VCs bags on IPO day.

So a few of these NFT projects are the next Meta or Microsoft or something. And anyone can participate. And they potential payoff is massive.

The rest are going to drift very close to about 0.02eth.

My plan for the week is to press longs through Wednesday then take a defensive posture.

If we sell hard Monday-Wednesday, then I’ll likely do nothing. Just sort of sit and take the beating. But if we have some strength early in the week I will look to lighten up on a few things and initiate an SQQQ position. Very slowly. I am not in a hurry to do this. There is a massive rally lurking in the shadows here. We are quite overdue. And there is nothing worse than being on the wrong side of one of those. Both for your financial well being and for emotional health.

Okay for now I have to boogie.

Raul Santos, March 06th, 2022

And now the 377th edition of Strategy Session.

---

Stocklabs Strategy Session: 03/07/22 – 03/11/22

I. Executive Summary

Raul’s bias score 2.85, neutral*. Bulls put together a rally through Wednesday. Then look for sellers to step back in and pressure the tape back down to recent lows. Watch for CPI data due out Thursday morning to introduce sellers to the tape.

*Rose Colored Sunglasses bearish bias triggered, see Section V

II. RECAP OF THE ACTION

Choppy with a slight upward bias through Wednesday, then sellers pressured the tape through Thursday. Price stabilized Friday and chopped along the weekly lows.

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

Rotational Report:

Another bearish set of weekly rotations. Energy is all over the place. Utilities are strong. Tech and discretionary are weak.

bearish

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

Concentrated Money Flows:

Money flows have been dominated by sellers for the last fifteen weeks.  There have been a few slightly positive skews in recent weeks but nothing strong enough to negate the selling.

Last week’s money flows were again dominated by sellers.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Combining two signals into one cohesive strategy

Rose Colored Sunglasses calls for five days of selling. However, we have three days left in the Stocklabs oversold cycle that began February 23^rd. These two factors are what drove me to write an executive summary calling for some strength/rally through Wednesday, then selling pressure into the weekend.

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:

Bulls put together a rally through Wednesday. Then look for sellers to step back in and pressure the tape back down to recent lows. Watch for CPI data due out Thursday morning to introduce sellers to the tape.

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]:

Semiconductors looking murky

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 have a fairly clear balance inside another balance.

See below:

Semiconductors might have balance also, but the Thursday Friday action was seller dominated and that gives the chart a discovery down look. Hard to call it either way. Ranges tend to hold, but the current picture looks right for setting up a lower low.

Ether is also a bit murky. Nice compression/balance. Let’s stick with that until we see a major change.

V. INDEX MODEL

Bias model is signaling Rose Colored Sunglasses bearish. The model was neutral for the three weeks prior. We were Bunker Buster six reports back. This is the second Bunker Buster in recent history, with the previous one being fourteen reports back. The Bunker Buster before these recent two was fifty-two weeks ago.

Interesting…

Model is bearish heading into next week. Calls for selling pressure throughout the week.

Here is the current spread:

VI. 12 month Hybrid Oversold

On Wednesday, February 23rd Stocklabs went hybrid oversold on the 6- and 12-month algo. This is a ten day bullish cycle that runs through Wednesday, March 9th, end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“One cannot discover new lands without consenting to lose sight, for a very long time, of the shore” – Andre Gide

Trade simple, explore new techniques

Comments »

We’re all enamored with Ukrainian President Volodymyr Zelensky this weekend. Fawning over pictures of his bravery in the face of a battle we don’t understand. He’s not really French beautiful like Justin Trudeau, more of like Slavic gritty handsome. Stalky—perhaps strong on the grapple but not necessarily as powerful in a court of charged up women as a slim and tall type like gentle Joe Biden is. But nevertheless, the fight for the hearts and minds is being won by the Ukrainian propaganda machine and whomever interest it is to win these Goebbel-esqe campaigns has to be feeling pretty good about that.

On the ground, in the markets, the only place (besides masculine beauty) where I am an expert and should offer my opinion, things are looking decent.

Semiconductors and Transports held their respective range lows and that sets up the potential for a run up through range. Pair that with earnings due out of big daddy Buffett’s Berkshire Monday, and the turning of the calendar to March, what with American celebrations of gluttony before giving up their vices for Lent (one of the few christian marketing campaigns I can get behind, thinning those fat fuckers out). And all these events bode well for bulls to win the week.

Of course we also have the Fed doing their semiannual testimony to lawmakers Wednesday and Thursday, but I trust that patriotism may take precedent over inflation concerns and that’s the type of conversation that could put off these heckin’rate hikes Goldman Sachs and the other shithead bankers are pining for.

Our dear Costco is also set to report earnings and we have a non-farm payroll wildcard Friday. All-in-all, this week is likely to offer the trigger happy volatility trader lots of opportunity.

Me, I’ll be taking it easy. I have to put some work into elder raul’s cabin in the woods and perhaps find some time to head over to the local bath house to drink vodka and gain a sense of the spirit of the local Russian community. Then I’ll join the Polish in eating their grotesque paczki donuts. Then maybe do some yogas or move some weights around because good lord I am getting soft. And with farm season nearly upon us, I cannot affordt to be soft.

That’s it. That’s my thoughts heading into March.

It is wise to mute/block anyone who is amplifying chaos. They’re is an elevated risk they will cause errors in your execution. Mute and block those jokers. Throw up the blinders and do your job like a strong horse.

Raul Santos, February 27th, 2022

And now the 376th edition of strategy session.

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Stocklabs Strategy Session: 02/28/22 – 03/04/22

I. Executive Summary

Raul’s bias score 3.33, medium bull. Rally into new month. Then watch for reaction to Monetary Policy to put direction into the tape by Thursday afternoon. Non-farm payroll data Friday morning may serve to accelerate or reverse price action into the weekend.

Keep an eye on Berkshire and Costco earnings, due out Monday and Thursday respectively.

II. RECAP OF THE ACTION

Selling pressure through Wednesday then a sharp rally into the weekend.

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

Rotational Report:

Rotations are not ideal, with Discretionary lagging and Utilities somewhat strong. But perhaps a bit of risk aversion is prudent at this time.

neutral

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

Concentrated Money Flows:

The selling skews over the last fourteen weeks was dominated by sellers. Last week we saw the ledger skew slightly positive.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Seasonality

Always a good idea to pop into the Seasonality data heading into a new month. March has historically been a positive month for equities. And with prices having been beaten down since December, the stage may be set for those historically strong April stats to pull forward into March.

Past performance is not indicative of future returns.

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:

Rally into new month. Then watch for reaction to Monetary Policy to put direction into the tape by Thursday afternoon. Non-farm payroll data Friday morning may serve to accelerate or reverse price action 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]:

Ranges in tact (for now)

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 made a sharp reversal after sellers attempted a move down out of the range we’ve been observing. Now the stage could be set for a traverse up through the range.

See below:

Semiconductors same story. Range held. Now we may be set up to explore the other side of range.

Ether had what now can be clearly observed as a discovery down phase. We cannot as clearly identify a range on this chart. There is an old support level, however, that may be converted into resistance. If this happens we could see a whole new set of discovery down rotations.

Worth keeping on the radar that there is greater potential downside risk for this chart than the other two.

However, if we see a strong thrust lower, it could set up a whole new discovery down phase.

V. INDEX MODEL

Bias model is neutral for a third week. We were Bunker Buster five reports back. This is the second Bunker Buster in recent history, with the previous one being thirteen reports back. The Bunker Buster before these recent two was fifty-one weeks ago.

Neutral heading into next week. No bias.

Here is the current spread:

VI. 6- 12-month Hybrid Oversold

On Wednesday, February 23rd Stocklabs went hybrid oversold on the 6- and 12-month algo. This is a ten day bullish cycle that runs through Wednesday, March 9th, end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“The coming of the wireless era will make war impossible, because it will also make war ridiculous.” – Guglielmo Marconi

Trade simple, stay connected

Comments »

I haven’t really worked yet in 2022. I’ve taken one futures trade and it worked out well but it went against all my rule to take it. The main issue here is my difficulty connecting on some quality cme data. Add to that the undertaking of a floor install for dear old elder raul, and well I haven’t found time to work.

Doing flooring is not the best use of my time. If I never installed another floor after elder raul’s that would be okay by me.

But who knows — these market conditions may have put me in a body bag. It is hard to say. Some traders love high volatility conditions. I’ve worked some well and others horrendously. I crush mellow, drifting markets. I just wait for a nice gap down inside the prior days range and I bid into it until it is filled. This trade liberated me from the world of corporate finance.

I do need to get back to work. This not making money thing is super lame. I’ve been on some legacy flex these last few years, toiling and building, because I expect this salty out vessel of mine to become less capable of doing this stuff soon. My brain keeps telling me to finish everything so I can live out my days sitting around in kick-ass huts writing stories and speculating on the fate of the global financial complex.

These reports keep me dialed into the action enough to manage my long-term holdings, but without my dang market profiles and morning reports I am useless on a short term basis.

I need to get the profiles back up and running.

Maybe not this week though. I have more toils ahead of me.

But perhaps March.

We don’t know.

Raul Santos, February 21st, 2022

And now the 375th edition of Strategy Session.

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Stocklabs Strategy Session: 02/21/22 – 02/25/22

I. Executive Summary

Raul’s bias score 2.60, medium bear. Watch for elevated volatility to continue across the equity complex as markets attempt to price in geopolitical risk. There is potential for sellers to pressure the tape lower if recent balance zones break down (see Section IV).

II. RECAP OF THE ACTION

Stable through Tuesday then three days of heavy selling right into the weekend.

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

Rotational Report:

Broad rotation away from all sector groups except Staples.

bearish

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

Concentrated Money Flows:

The selling skews over the last fourteen weeks have been dominated by sellers. The ledger skewed negatively again last week.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Fitting a narrative to price action

As much as possible this report aims to objectively assess stock market conditions. It is extremely difficult to consistently profit from predicting the effect of something like a country being invaded or interest rate commentary. These types of factors reveal themselves in the behavior of price action. Therefore, if we consistently apply auction theory, we can navigate through these events. As of now we haven’t had any identifiable news events we can specifically point to on the charts. Heading into the end of February we can likely gain clarity by ignoring the news flow.

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:

Watch for elevated volatility to continue across the equity complex as markets attempt to price in geopolitical risk. There is potential for sellers to pressure the tape lower if recent balance zones break down.

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]:

Visualizing downside targets

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 may be settling into a balance. But this week we will be looking at potential targets to the downside on all three contextual charts. Primary expectation is for balance to hold, but if not we have some areas to target below.

See below:

Semiconductors are the most important chart to be aware of during this correction. We have a failed auction above and below and a bias pivot is revealing itself. Should we see a second thrust in the discovery down, the gap zone left behind last May is likely to be tested.

Ether seems further along in the discovery down process than the other two indices. We can see the most recent pullback in the discovery down was closer to the prior rip high. This down phase is becoming more and more likely to trap short sellers.

However, if we see a strong thrust lower, it could set up a whole new discovery down phase.

V. INDEX MODEL

Bias model is neutral for a second week. We were Bunker Buster four reports back. This is the second Bunker Buster in recent history, with the previous one being twelve reports back. The Bunker Buster before these recent two was fifty weeks ago.

Neutral heading into next week. No bias.

Here is the current spread:

VI. 6 month Hybrid Overbought

On Tuesday, February 1st Stocklabs went hybrid overbought on the 6-month algo. This is a ten day bullish cycle that runs through Tuesday, February 15^th, end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“To know what you like is the beginning of wisdom and of old age.” – Robert Louis Stevenson

Trade simple, clarify intentions

Comments »

Canned water dealer Liquid Death hired a real-life witch to cast a hex on the Rams during tonight’s Super Bowl match up.

How far have we strayed from the god of christian lore? Throughout the sports game a witch will be cursing those holy Rams and their Matthew Stafford, summoning the powers of bealzibub in the name of profit and marketing.

Contrary to the bets of football gamblooors, my fate rests in the hands of algorithms cobbled together by a ragtag group of online misfits. Said algos have me leaning bullish into a super intense week. When fortuna’s wheel spins, I prefer to have my footing on solid ground — not superstitions. I’d rather base my gambles on whale migrations that god or the devil.

Moving on…

Some attention-hungry DC journalists starting tweeting out some real greasy INVASION tweets Friday afternoon, spooking the already spooked markets more than they already were.

NEWS: The U.S. believes Putin has decided to invade Ukraine and communicated those plans to the Russian military, three officials tell @nickschifrin. Two admin officials say they expect the invasion to begin next week—echoing what Secretary of State Blinken has said.

— Geoff Bennett (@GeoffRBennett) February 11, 2022

Tensions are running high economically and geopolitically — one in the same.

The last thing we need is a battle. What this world needs right now is calmer, darker minds to prevail. The Rasputins of the world. Folks who drink reindeer piss and wander around talking to trees.

If these power-hungry meat-hounds keep up this cock-measuring contest. We’ll all be fucked. Living underground, fighting off radiation wolves and eating Raul’s pumpkins.

I intend to take the week slowly.

There are hot trader accounts on twitter who swear by actively trading these highly volatile markets. I tend to step aside and let them mash each-other’s books. Then, once the storm recedes, I sort of drift back in and pick up the pieces.

The nice thing is I still don’t have my tools. So I don’t feel pressured to take action.

I made an error last week. Shooting from the hip in the NASDAQ futures market. It worked out and I captured two stacks of fiat american dollars. That is trouble. I SHOULD not and WILL not trade like that again.

I suppose I am cautiously bullish with an eye on capital preservation?

Okay for now.

Raul Santos, February 13th, 2022

And now the 3745th edition of Strategy Session. You know it’s getting dodgy when the Marcus Aurelius quotes come out.

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Stocklabs Strategy Session: 02/14/22 – 02/18/22

I. Executive Summary

Raul’s bias score 2.73, neutral. No clear bias. Perhaps a rally early in the week. Then look for the reaction Thursday morning (after Nvidia and Walmart earnings) to dictate direction into the weekend (long holiday weekend, markets are closed next Monday in observation of President’s Day).

II. RECAP OF THE ACTION

Choppy through Tuesday. Rally Wednesday. Reversed lower Thursday and hard selling through Friday and into the weekend.

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

Rotational Report:

Key Tech and Discretionary under pressure. Energy continues to trade independent of the equity complex. Financials flat as investors eye rate hikes.

slightly bearish

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

Concentrated Money Flows:

The selling skews over the last thirteen weeks have been dominated by sellers. Last week buyers skewed the ledger but these aren’t really the type of industries that drive the market.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Geopolitical risk elevated

We operate independent of news as much as possible. But one cannot simply ignore invasion headlines like the ones put out by DC journalists last week. We have an overbought cycle (bullish statistics) through end-of-day Tuesday. That is the only systematic signal we’re working with heading into the week. I am inclined to lean on that stat as long as Russia does not invade Ukraine.

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:

No clear bias. Perhaps a rally early in the week. Then look for the reaction Thursday morning (after Nvidia and Walmart earnings) to dictate direction into the weekend (long holiday weekend, markets closed next Monday in observation of President’s day).

Bias Book:

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

Here are last week’s bias trade results:

N/A (did not update model)

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

Ether discovery down matured, others not so much

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 still look like they are in discovery down, but the long-term balance outlined below may serve to stabilize price back into balance.

See below:

Semiconductors have that old failed auction above. Not a good look for bulls. Then last week we saw a clear conversion of support into resistance. If this chart starts to accelerate to the downside, expect the entire equity complex to follow.

Ether appears to be in balance. Whether it can brush off the weak overall context remains to be seen. But this is definitely a healthier looking chart than the two above.

IV. INDEX MODEL

Bias model is neutral into February option expiration. We were Bunker Buster three reports back. This is the second Bunker Buster in recent history, with the previous one being eleven reports back. The Bunker Buster before these recent two was forty nine weeks ago.

Neutral heading into next week. No bias.

Here is the current spread:

V. 6-month Hybrid Overbought

On Tuesday, February 1st Stocklabs went hybrid overbought on the 6-month algo. This is a ten day bullish cycle that runs through Tuesday, February 15^th, end-of-day. Here is the performance of each major index so far:

VI. QUOTE OF THE WEEK:

“You shouldn’t give circumstances the power to rouse anger, for they don’t care at all.” – Marcus Aurelius

Trade simple, stop getting worked up

Comments »

Indexmodel is calling for the short, via Rose Colored Sunglasses. Stocklabs is somewhere between a few oversold cycles and last week we had about as textbook a Bunker Buster as one can hope to expect.

With all these signalled crossed, and the way January sloppily ends on Monday, making us suffer through this wretched month for another business day, well chaps I am inclined to step aside.

I want to impart a bit of wisdom to my dear reader today. Work is about purpose. Without purpose or goals or whatever there will be a million distractions and then there is the toxic mentality of greed. More for the sake of more.

My needs are simple—to live in a progressive community full of smoking hot babes. A town with a thriving techno scene and quality bath houses. Good, nutritious food. Health for ma familia. That’s it.

I’ve earned enough to satisfy these needs indefinitely, even if I never worked another day in my life.

I’m the captain now. Now that there is no need to work I can pursue the sweet life and I shall. Speaking of, I shall make my way west later this week to enjoy some reprieve from the mundane grey streets of Detroit in exchange for a nice ski chalet up near Lake Tahoe.

With that in mind, and the way signaled are crossed, my time these next few days will be best spent getting my affairs in order. This will likely keep me out of trouble—because if I was hellbent on trading this tape next week I would be working the short side aggressively, and who know? That might be painful.

I know I haven’t really worked yet this year. I will work again soon. I figure, two months without work is a minor break. So hopefully I will find some clarity in the mountains and then come back to work.

Maybe I won’t. We don’t know.

But February has always been good to me when I don’t force opportunity. IPAs and PBJs for breakfast. Reefer and snowsports all day. Hootch and fish meat for dinner by a nice fire. Let the accounts do their things and ride into quarter end a champion.

But as always, who knows this year. This is Jim Biden’s america, a much healthier place with much less chaos and white trashedness. That chaos was pure gold for me. Now that democracy has won and the idiots have been run out of all major city centers. There is a peaceful unease amongst the people who buy stocks and other risk assets.

So we don’t know.

I hope you’ve learned something valuable from these musings. Risk assets have made men’s fortunes long before we existed and they will continue doing so long after we’re gone. So find some nice boobs and hot baths and mountains from time-to-time, or whatever sends you into a state of bliss. Then bring that energy back to the game.

Seh la,

Raul Santos, January 30th, 2022

And now the 374th edition of Strategy Session. Programming note—I will not be producing a strategy session next weekend.

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Stocklabs Strategy Session: 01/31/22 – 02/04/22

I. Executive Summary

Raul’s bias score 2.98, neutral*. Expect a choppy week. Perhaps a rally through Monday then selling pressure through Tuesday. Then watch for Alphabet earnings Tuesday after the bell to provide direction to the overall tape.

Meta reports Wednesday and Amazon Thursday, both after the bell. Then non-farm payroll could provide direction into the weekend.

*Index Model signaled Rose Colored Sunglasses (bearish), see Section V.

II. RECAP OF THE ACTION

Gap down and heavy selling Monday morning, eventually formed a sharp excess low and rallied into the close. The rest of the week was choppy but ultimately resolved higher with a Friday rally.

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

Rotational Report:

Tech out in front last week. Bulls would ideally like to see Discretionary alongside Tech, but overall decently healthy rotations.

slightly bullish

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

Concentrated Money Flows:

The selling skews over the last eleven weeks have been dominated by sellers. Sellers skewed the ledger again last week. None of the industries on the positive side of the ledger are much use in swaying the overall market.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Signals are crossed again

Sometimes this happens. Signals start to be conflicting and the environment really is not where I trade best. Everyone’s style is different, but my strategy is to stack as many favorable statistics as possible before I engage.

There will always be another trade. The markets were here long before us and will continue on well after we’re gone. I am content to avoid the tape next 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 a choppy week. Perhaps a rally through Monday then selling pressure through Tuesday. Then watch for Alphabet earnings Tuesday after the bell to provide direction to the overall tape.

Meta reports Wednesday and Amazon Thursday, both after the bell. Then non-farm payroll could provide direction 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]:

Some potential failed auctions the other way

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 still appear to be in discovery down but if you look back to July 15^th you can see we exceeded the recent swing low only to sharply reverse. This could be a bullish set-up, a failed auction.

See below:

Semiconductors have that old failed auction above and potentially printed a failed auction below. Buyers will need to confirm this set-up by making a strong move higher.

Ether for another week still has the discovery down look.

V. INDEX MODEL

Bias model is Rose Colored Sunglasses bearish into this sloppy Monday month-end. We were Bunker Buster last report. This is the second Bunker Buster in recent history, with the previous one being nine reports back. The Bunker Buster before these recent two was forty seven weeks ago.

Rose colored sunglasses calls for sellers to pressure the tape lower.

Here is the current spread:

VI. 3 month Hybrid Oversold

On Thursday, January 13th Stocklabs went hybrid oversold on the 3-month algo. This is a bullish cycle that ended Friday, January 28th end-of-day. Here is the final performance of each major index:

VII. 12 month Hybrid Oversold

On Thursday, January 20th Stocklabs went hybrid oversold on the 12-month algo. This is a 10 day bullish cycle that ended Thursday, February 3rd end-of-day. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“A proud man is always looking down on things and people; and, of course, as long as you are looking down, you cannot see something that is above you.” – C.S. Lewis

Trade simple, with humility and kindness

Comments »

Not going to sugar coat it lads, things are looking pretty bleak in the old equity complex.

I went over last week’s data to see if any minor adjustments that may have occurred from having quality raw data instead of k-mart data would have signaled the short last Sunday. It doesn’t seem likely to model would have caught the down move.

The model is signalling Bunker Buster again. If you recall, we had one of these eight weeks ago. When they happen in close proximity of each-other like this that is a bit of a red flag.

There are other technical red flags but we won’t get into them here. Read the Strategy Session if you want to see everything I am looking at.

The real red flag is my emotional state. I am thriving right now. Winter has finally made its way into the north and it is doing wonders for my bones. I am toiling and doing gymnastics and going to the bath houses and disco raves. I’ve been doing my business in the woods like a bear and drinking hootch. It just seems like if we were really close to a bottom I would be feeling a bit more despair.

Michigan is an interesting place. We have these radical political polar opposites. Speaking with commoners of these lands yields a common thread — civil war is imminent. The lefties think it as much as the righties. I blame cable news. I don’t ever let that toxic bull shit enter my perceptual lens.

The truth is, I’ve already made it. On a fluke I bought a modest single family home in 2010 pretty close to the generational bottom in housing. Then I retired from corporate finance and found my footing as a full-time speculator. After that I learned how to grow a decent amount of my food. I know how to make beer (but I don’t right now — too busy). I have farms. Plurl. Elder Raul has a cabin in the woods I can bug out to if the city goes haywire.

I am building a complex in the city that ten trucks full of bugaloo butt clowns couldn’t breach with a full detail of assaulting rifles and rpgs. So I make my way through the world carefree and easy. On top of all of this, I am terribly good looking and folks just heckin’ like me.

Like I can disarm most situations with the power of word. And when I can’t daddy-o I can run a 4.6 second 40 yard dash and parkour my way to safety.

I can dig a hole as strongly as anyone.

At some point one has to choose freedom. This country offers it. This is the best country in the world man don’t let those fear mongering doche bags twist your mind up.

With that freedom comes responsibility. For the common man. Does that mean dying on a hill because you’re suddenly an observer of some 20-something-year old losers acting a fool? Maybe chivalry is needed. Most of the time it isn’t.

Choose your battles.

Or chose not to battle. Just build compounds and if the bandits manage to breach your fortifications, let them take the compound and go live under a bridge somewhere near a national forest.

It really is that simple lads.

But yes, markets are looking dicey. I’ll look to add some long exposure during the week but the fucking Matterhorn is not on my buy list. I am buying quality. Microsoft. Google. Tesla. COSTCO. Berkshire. WALLED MART.

Have you ever played Monopoly? Only one person wins.

Okay for now,

Raul Santos, January 23rd 2022

And now the 373rd edition of Strategy Session.

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Stocklabs Strategy Session: 01/24/22 – 01/28/22

I. Executive Summary

Raul’s bias score 1.83, STRONG BEAR*. Sellers continue to pressure the tape. Watch for a strong buyer response at some point during the week. This could mark a tradable low into the next few weeks. Possible catalysts for a reversal — Big Tech earnings Tuesday-Thursday (MSFT, TSLA, AAPL) or Fed rate decision/press conference Wednesday.

*Index Model signaled Bunker Buster, see Section V.

II. RECAP OF THE ACTION

Gap down Tuesday into the holiday-shortened week. Sellers defended the gap zone through Thursday then accelerated to the downside Thursday afternoon. Reflexive rally early Friday was overrun by sellers who continued to pressure the tape into the weekend.

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

Rotational Report:

Full-on risk off rotation out of the equity complex.

Bearish (but also nearing extremes that could be considered bullish)

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

Concentrated Money Flows:

The selling skews over the last ten weeks have been dominated by sellers. Sellers logged another massive ledger print. Bull need to do something major to turn these tides.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Holiday pivot LOWER

Well we seemed to have pivoted off the holiday to the downside. Perhaps this is the start (middle?) of capitulation we need to see to form a low. The selling prior to last week had been methodical, under the surface, and only hitting certain sectors.

For now sellers are in control.

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. Watch for a strong buyer response at some point during the week. This could mark a tradable low into the next few weeks. Possible catalysts for a reversal — Big Tech earnings Tuesday-Thursday (MSFT, TSLA, AAPL) or Fed rate decision/press conference Wednesday.

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]:

PHLX confirms the failed auction

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 broke compression to the downside. Now this chart appears to be in discovery down. Perhaps we find a new, wider range sometime in the future.

See below:

Semiconductors confirmed the failed auction when we made a hard move away from the failure wick last week. This is a troubling set up as semiconductors are been the driver of our entire secular bull market for the last few years. A failure here could set up many quarters of bearishness. As always, we’ll take it one week at a time.

Ether still has the discovery down look.

V. INDEX MODEL

Bias model is Bunker Buster heading into month-end. This is the second Bunker Buster in recent history, with the previous one being eight reports back. The Bunker Buster before these recent two was forty six weeks ago.

Bunker Buster calls for an acceleration to the downside and an eventual formation of a tradable low.

Here is the current spread:

VI. 3 month Hybrid Oversold

On Thursday, January 13th Stocklabs went hybrid oversold on the 3-month algo. This is a bullish cycle that ends Friday, January 28th end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“A person who thinks all the time has nothing to think about except thoughts, so he loses touch with reality and lives in a world of illusions.” – Alan Watts

Trade simple, think slow, move fast

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