The ocho friends, we have officially printed eight consecutive neutral days.  It truly is painful to see.  I am grateful all cycles are complete and I can sashay to the sidelines because this madness is just too much to bear.  This all reminds me of my favorite casino strategy.

I hate casinos, first off.  They are the last place people in Detroit are allowed to smoke indoors and boy do they.  Next, they’re filled with the lowest lifeforms on the planet, myself included.  When I go to a casino, it is because the destination was packaged into some other ‘event’ by my ‘friends’.  By event I mean I am probably inebriated and therefore a trouble making grifter.  I needed an activity to keep me busy while my friends donated hundreds of dollars to MGM Grand. Enter: the house bet.

Go to a craps table, wait for someone to successfully make two passes while shooting the dice.  Then bet the don’t pass line.  What are the odds they make three consecutive passes, right?  If they made a third pass, double down and bet don’t pass on the fourth round.  It usually pays out.  It takes a while to occur, and it kills almost every excited craps table.  Yep, that asshole.

But it has a clear limit.  You do not double down again on the fifth pass.  You do not take personal vendetta against the roller.  You leave emotions out.  Streaks are real.  Accept them and sleep better.

This is an epic streak, and if/when it finally comes to an end, we need to celebrate it somehow.

The cycle is officially complete, by the way.  Bears may now resume their feasting.

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Per the Weekly Strategy Session and this morning’s Nasdaq report we were looking for The Fed minutes to put some direction in the market.

Im looking for this bid to stick thru NFP Friday morning.  Check this morning’s post for targets.

Top pick: Le LULU

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Tape speed is slowing a bit so let’s talk about one of the least discussed matters of trading, how best to fuel your body while trading. Breakfast is easy—less is more, coffee. It will keep you sharp through the morning session without bogging you down. Lunch is a bit more complicated but critical and noobs always make fatal errors during this meal.

Foremost and weather permitting, lunch should be taken outside. Your eyes need time to look at something other than the screens 12 inches from your face. This will help slow the inevitable vision decay anyone committed to this vocation is certain to endure.

When it comes to meal size, again think less. Want to be in a painful coma when trading picks up at 1:30pm eastern? Eat a bacon cheeseburger with some fries and a coke. You will be an amorphous bag of fluid melting into you’re a/c cooled chair while I have eyes like laser beams and reflexes like an apex predator. Here are 3 steps toward a more powerful breakfast.

Step 1: Eat half the meal size you normally would. Stay hungry.

Step 2: Your meal should be low carb, high fat, and high protein. Usually a salad works. The darker the greens the better and be sure to toss in some chicken and/or beans. You may also want to eat a can of beans. If you have trouble digesting beans then chew a few bean-o tablets before your first bite. Boom, gastro solutions from your boy. Pro tip—rinse that disgusting can goop off your beans. If you want them saucy, add some grape seed oil and hot sauce.

Step 3: Drink water, nothing else. If you want to be fancy and have the mouth feel of a soda then drink Pellegrino or Perrier. I won’t look down my nose if you add a little lemon. If you must have a sweet drink, try a drop or two of stevia.

On the go? Chipotle bowl no rice with the stir-fry veggies. If possible, try to find and support a local Mexican eatery instead and order fajitas. Be sure to slap the tortilla shells onto the ground in disgust.

In an even bigger hurry? Medical marching pills. Buy a bottle of arginine (sp?) from your local GNC drug dealers (not recommended). Pre-workout is effective too.

Do you have a go-to lunch? Let me know in the comments below and I will judge you incessantly.

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As cooler climes approach, consider the resurgent stream of ladies wearing high tech workout slacks ready to patronize your town or village.  Like schools of salmon, they will flood campuses covered in literally the greatest garment ever created.  A blessing to both men and woman, the form-fitting pants defy gravity and inspire their users to drink raw juice and contort their bodies into holy positions.  As excited as I am about the scenery, I am also eyeballing the September seasonality on Lululemon.  Historically, it is their second best month of the year.

Per the Exodus analytical engines, check out the stats LULU has thrown down in prior Septembers:

Note: Earnings are September 10th, so have a plan if you intend to squeeze into this stock.

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The statistician in me died a little today when we pushed neutral for the fifth consecutive day. There are no other streaks like this in four years of data. This is the ubiquitous long-tail risk that lingers in the universe, waiting to show up and destroy civilization. Chalk it up as another 2015 anomaly sent to destroy us. This market is like the 90’s in Detroit where most streets were the ‘wrong street’ and going down them assured your life would be threatened.

While the market devises new ways to hoodwink investors, I am sitting calmly and biding my time with low cash reserves. My book was flat despite the afternoon selling. I should have sashayed back into a short biotech position. It seems so clear now that these so called ‘scientists’ are destined to slowly combust back to their basic molecular state of carbon ash.

Speaking of our good friend carbon, dinosaur bones aka oil is on an insane run. Equally insane is the friend of mine who for the last 2 months has steadily bought about $10k worth of UCO every week. He calls it a long term investment, lol. After weeks of my lambasting him about the bastard nature of leveraged ETFs, he is having a rather deep bellied chortle today. What can I say? Averaging into a spelunking asset isn’t my game.

Option Addict is right. In these conditions you don’t use charts, statistics, or roads (extra Doc Brown). You trade using the prevailing sentiment. Or, like me, you realize how abnormal the situation is and just go into wealth preservation mode aka don’t trade.

I HAVE MADE NO CHANGES TO MY BOOK. Good day good sir.

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After four laborious weeks of working my edge, it is with great pleasure that I am presented with no such information after this weekend’s research. Instead I can finish riding this ridiculous bounce then resume being the lazy man I was destined to be.

When I first started trading full time I remember feeling like I had to trade every day. It meant I was busy and doing something, like a punk accountant. If I missed a day because some ridiculous distraction like a dentist appointment or other life task I would fume from the ears. How dare they take me away from my work!?

So dumb, most of the time was spent spinning my wheels.  Nowadays if I don’t have a statistical edge generated by my own manual research paired with the power of 5000 algorithms, then I just don’t trade. It’s cool yeah?

Anyhow, we are in the final throws of summer. Next weekend is labor day, and there are certain fresh waters whispering my name. I am bullish through close-of-business Tuesday then I may cash up and go sit in the woods.

Exodus members, distinguished gentlemen, won’t you go inside our software and read the latest Strategy Session?  I just published it.  Feel free to ping me with your ideas and questions.

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Stock markets are set up properly, and conditions are prime for misdirection and Fed one’uppery. This weekend your leaders are meeting in Jackson Hole aka God’s country. Upon arrival they will strip down to their underwears and shoot high powered revolvers in the desert with Dan Blizerian.

After consuming kegged beer, they will convene in a cold conference room to take a long nap. Upon waking, we find out if Janet Yellen saw her shadow. If she did, the September rate hike is off the table.

Pair that with some Chinese shenanigans and you have the makings of a macro explosion to the upside.

I know we joke about the China men and their sham-WOW enterprise, but I happen to know they are entirely dominating the bed market. And we Americans do lots of sleeping. We sleep in all these new homes we are building as we enter the roaring 20’s.

These are golden times. Ones our children will scoff at, wishing they were of age and able to participate.

Act accordingly.

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These last three days may have been the best market profile mash up ever. You troublemakers don’t stand a chance because you’re stubborn. You don’t learn. Let’s recap, shall we?

Monday – fuck Monday

Tuesday- neutral extreme down, shorts end day with elevated conviction

Wednesday – neutral extreme up, shorts blindsided and now setup to be squeezed

Today, junior – good ole’ fashioned NEUTRAL DAY

I take it back. You learn things. You learn to rely on your perceptions, and the market exists to alter them. Yours is an intelligence handed down from hard lessons. Mine is adherence to statistical probabilities, advanced market structure logic, and objective judgment. Who do you suppose will last 10,000 years, etched into stone by the plebeians?

I have the energy of 225 horses pulsing through my veins. I eat more spinach then 10 men. I could snap a 2×4 across my back like a dead twig. When the market presented a 3^rd neutral after 2 of the low-probability neutral extreme variety you were screwed. Perceptions are heavily weighted toward recent events. Probabilities are foundation stones formed over years. Build yours up and build atop them, else be washed away by the hurricanes of time.

Important Programming Note: My twitter handle has changed to @IndexModel. Be sure to tell your neighbors and friends, but not your wives.

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Conditions this morning were perfect for a Morrie’s wig shop short squeeze. Profile alignments are not always so ideal, but when they are you must be ready to strike with conviction and vigor. Now that it is the afternoon we can see that tape speed has been reasonable. This bodes well for the bull camp. Considering the horror this week has already presented, I would be remiss to turn off the fasten seatbelt. If I did passengers would freely roam the cocked pit, purposely touching their bums to others crotches and such. These conditions are more, “Stay in your seat, but go ahead and fill your Bloody Mary to the brim.”

Most of you are in a pickle—a middle seat of sorts. Take the Tesla haters, they are doomed and can resume living in a cave, staring at shadows on the wall. But really it is anyone who lacked the intestinal fortitude to buy a crashing market.

You are now presented with 3 options and they all stink. You can short the rally, sit elbow deep on your hands, or buy atop 5-sometimes-10 percent moves.

I am in no such predicament. Mine is a bit more complicated, yes, but long only, cash low, and eyeballing certain exit strategies, slowly.

I HAVE MADE NO CHANGES TO MY BOOK TODAY.

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I flipped bias too soon lads. It was last Friday morning. The summer looked promising and I rode the initial bear move down rigorously. After the short was covered I was full puffed chest, so I immediately flipped long. Then I went longer late Friday afternoon. Then I caught the worst case of the Monday’s ever in the history of bad Monday’s.

As a result, despite the Nasdaq being 400 points off the low, I am still about 75 points under water.

My only Monday morning horse, APP, old APPy, is down like 16% and just a consecutive reminder why I should stick to doing what I do best and outsource ‘stock picking’ to the Space Alien Magician and his robot brain trust.

I will take my loss in APP and I will ride my other longs back to glory. Today was all about sitting. I sat and watched my book churn lower while sucking down caramel frappucino and fish salad, the most addicting vice I’ve ever encountered.

Today ended up a neutral extreme up after we printed the opposite yesterday. That’s classic conditions for a short squeeze—a short squeeze that shall propel the Nasdaqari 75 points higher to bail out your boy.

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