Friday, October 28, 2016
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Tomorrow Obama Will Decide Whether or Not to Start World War 3


The operative word here is start.

Obama and his neocon foreign policy advisers are going to meet tomorrow to discuss whether or not they should begin targeting Syrian forces. They will promote this as a cause to end the carnage in Aleppo, which we started and caused by permitting weapons to be moved from Libya to Syria — not to mention the power vacuum caused by a premature exit from Iraq.

Unlike Russia, we’re technically and fundamentally invaders in Syria. Demonizing Assad is pointless, when in fact the alternative is far worse.

Some top officials argue the United States must act more forcefully in Syria or risk losing what influence it still has over moderate rebels and its Arab, Kurdish and Turkish allies in the fight against Islamic State, the officials told Reuters.

One set of options includes direct U.S. military action such as air strikes on Syrian military bases, munitions depots or radar and anti-aircraft bases, said one official who spoke on condition of anonymity to discuss internal deliberations.

This official said one danger of such action is that Russian and Syrian forces are often co-mingled, raising the possibility of a direct confrontation with Russia that Obama has been at pains to avoid. U.S. officials said they consider it unlikely that Obama will order U.S. air strikes on Syrian government targets, and they stressed that he may not make any decisions at the planned meeting of his National Security Council.

One alternative, U.S. officials said, is allowing allies to provide U.S.-vetted rebels with more sophisticated weapons, although not shoulder-fired anti-aircraft missiles, which Washington fears could be used against Western airliners.

Sure, this makes plenty of sense. Give these fuckers sophisticated weaponry so that they could wreak havoc with it and install Islamic theocracies. How is this not evident to the pseudo journalists in the media? The rebels are terrorists, plain and simple, allied with Al-nusra aka Al Qaeda.

But Russia hacked John Podesta’s idiotic email box, so that means it’s okay to endanger 7 billion people, including 350m Americans.

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All The Action Is Found Trading Stocks


The index trader and the index investor are getting a bad deal right now.

These trading conditions are prime for error if you only trade an index.

Ranges are tight. Every globex session is normal. Rotations rarely have follow-thru.

The action is slow and getting caught full size into the lunch lull is a recipe for disaster.

Your sugars tank then little things can irritate you. Objective thinking is abandoned and gut decisions override your plan. Maybe you trade more size than normal since range is so small. Then poof, two-months of gains given back in one trade.

Trading from the outside-in usually works best in these conditions–fading the big moves using market profile levels.

Or you can switch over to trading stocks. I have not put the work in yet to get back into trading stocks, but if I even thinking about buying a stock I would be taking advantage of the free After Hours trials going on this week.

It is iBankCoin’s daily broadcast where Option Addict lays out a contextual framework then sets up stocks to trade. Members have been killing it in this slow, trending tape.

I will stick to NASDAQ futures because my planning and statistics and charts and order flow feel give me an edge. When it’s slow I just back off. But soon, when I’m ready to commit more time to work and grind out stocks, you best believe I will be watching After Hours. You should too.

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U.S. Stocks Rise From Hellish Depths; Bust Through June Highs


The bull market is back to asserting its dominance heading into the first official weekend of July.

Leading the charge is auto dealerships as cheap fuel inputs and low interest rates empower salesmen to sell vehicles like hotcakes.  The real story is what is happening with semiconductors.  This was a key focus of the Exodus Strategy Session last week, what the chips did.  They came into the week in a sketchy spot but alas, they are one of the strongest industries in show, BEHOLD:


One cannot ignore this event and stubbornly remain fixed on a bearish bias.

Furthermore, let it be known, the research team at iBankCoin was all over this move.  We were confident Tuesday would be weak but a headfake.  In short, iBC wins again.

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Heading into lunch, this market is not looking lazy.  Price is busy exploring lower in a desperate campaign to reveal buyers.

Early on the NASDAQ put on a  bit of a show by oscillating 30 handles, back-and-forth, in 2 minute increments.  The moves look like EKG bursts as the higher time frame slugged each other in the face, Ali vs Fraser style.

It eventually gave way to more selling.  Although it is true every transaction on the market has one buyer and one seller, right now no one is buying.  Liquidity is low and we are on the verge of another credit crisis.

The market is having one last extreme bipolar fit before the year end–thus assuring itself nothing but coal and a straight jacket for Christmas.


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Big Surge Triggers Change To Plan


Despite having a bad read on the FOMC reaction I managed to have a decent day. It helps we had a massive rally and my book is without hedge. Naturally I want more.

My largest positions do not put in work like these index moves, they just sort of sit on the sideline fawning the FANG prowess.

More importantly, and much to my chagrin, I missed a big win that Exodus served on a silver platter because the oh shit model had me bearish on Monday. NOTICE: henceforth said model signal will be named the Bunker Buster (h/t Uncle Buccs) and will not be interpreted as bearish. It has always occurred at-or-near lows so it will be considered a BONUS if Exodus already goes oversold.

BOOM: Solutions. We do not wallow in setbacks over here.

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Film:The Shining (1980) starring JACK NICHOLSON, STANLEY KUBRICK

Bulls had a shot earlier today.  We took out near-term low and quickly responded higher.  But now, as we round the bend and head into the close, biotech is probing back into the lows.

This could accelerate ahead of Friday the 13th.  I am tracking the biotech industry via IBB and trading the comeuppance via BIS.

UPATE: Click the blue date hyperlink below and go take my twitter poll on whether we see a Texas Chainsaw style Massacre tomorrow in biotech:


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Blame It on The $IBB, Baby


Healthcare is the worst performing sector on the session, currently trading about one and a quarter percent lower. The bulk of the selling is taking place in the home health care industry with hospitals not far behind, but we all know which industry is really to blame here, yes? Investors are being spooked out of those bastard biotech stocks.

The industry, as tracked by IBB, is heading into the close near the low of  the week. Despite shrugging off weakness Monday, it appears the polytetrafluoroethylene (Teflon) surface of this cancerous industry is wearing off.

The industry is swirling with allegations including their hot, 30-year old female Steve Jobs being thrown under the bus AGAIN by The Wall Street Journal.

The hubris level peaked this week, prepare to see all the weak hands flushed down the shitter and back to their home—living with the penguin.

Guess what?  This Friday is the 13th (extra Hitchcock) and the grim reaper will be out for biotech bull blood.

The bloated healthcare sector is leading to the downside here.  Their unicorn, the biotech industry is standing broadside in an open field, and I am perched 30 feet up with a sniper rifle ready to put fifty calibers in its chest.

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I Made Some Errors Today


I woke up rested, had a proper breakfast, saw to my morning preparations, lit my ritualistic death to biotech candle, but still managed to make some errors during the session.

Sometimes you do everything right but still make mistakes—for now I am still human. A few things tripped me up:

  • Gaps into a new week often get faded
  • TRIN had abnormal readings which call the first move of the day into question.

The problem with the above two events is they have no data behind them. I never ran a study to quantify the validity of these observations. Slippery footing gives way fast when you get out of sync with the market flow.

As a result, despite coming into the week with a short bias, I was trying to fade the market by 11am. Try is the key word because it felt forced. I managed to escape break even the first time but the second fade try took a drop dead stop—something I have not done in over a month.

Meanwhile, biotech was bulletproof. The industry even shrugged off another Citron attack. I am still short via BIS, but I feel like I am standing blindfolded in front of a firing squad.

When the market gives me a good spine twist I like to make sure my mental game is still centered. I am off to find my inner voice and listen to it until it stops talking o_0

I am also looking forward to hearing The Option Addict run through the investor conference content again.  Expert commentary is always useful when assessing your own strategy and approach.

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Alibaba Acquires Youku


Merger news out of  China this morning as Alibaba acquires Youku Toudu for $27.60/share.

Youku Toudu is China’s version of You Tube.  You see the resemblance, yes?  This deal united two of their big internet components, but who are we kidding?  It is all owned by the governement.

YOKU shares up trading just below $27/share as we head into Nonfarm payroll.

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Still Looks Creepy


Until the conditions can improve underneath the surface of index prices, the model is going to keep generating a short bias.

This is the fourth consecutive week where the bias model is calling for the short. Unbelievable, that’s pretty much the entire month of October. The NASDAQ composite is up 6.88% over the period, it’s best run of the year, and the model is flat out on the wrong side of the tape.

It makes me have a few thoughts—the first is that we are undergoing a shift in the marketplace which is causing my spread to stay pinned to the high side. The second thought is only a few stocks are doing the lifting which is pressuring the hybrid score.

Nevertheless, I would be remiss to ignore the bias. I will be working the short side of the tape this week. I may even initiate BIS again as I eagerly await the ultimate biotech comeuppance—an event so horrific and gruesome that minces biotech investors into little cubes of meat to be served on skewers.

Thanks again to everyone who made it out to NYC this weekend.  I had a blast catching up with you guys–especially the trading conversations.  A sincere hat tip to you.


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