For the quarter soaked in gasoline to end without combustion would have been a disappointment. It would be like a firework show without a finale. This is America, dammit, we like grande completions.

Since I returned from Jackson Hole, my main focus has been to trade less. It took me an entire quarter of random churn to realize my edge only exits a few finite moments a year. Digging a bit deeper, and using tactical entries and exits, I have 3, maybe 5 times tops intraday where I have an edge.

The rest is all work for the sake of work, random back and forth that my broker must L-O-V-E.

Today I had a strong trade coming out of lunch. I caught nearly the entire rotation up and by 1:45 I turned my attention to industry. Part of me knew this afternoon was destined to be hairy. It would have served no purpose to wring my hat and stress about the closing behavior because I had zero intention of altering my book.

I am long lads, the longest I have been all year. My positions are concentrated like the tanks of a blitzkrieg. Starting tomorrow, said spear will aim to penetrate the belly of the bear and separate its ranks, causing their camp confusion and chaos.

Like any blitzkrieg attack, its effectiveness is entirely dependent upon striking fear in the heart of the opposition.

I am like a wolf clad in skinned sheep and you are a merely baby cub. Cometh with great fury, all yee market inflows. Q2 starts at the stroke of midnight. Watch your futes.

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Nasdaq futures are set to gap down into Tuesday after printing a slightly abnormal globex range. Heading into month end we have relatively light economic calendar. At 9:45 Chicago Purchasing Manager data is out and at 10am Consumer Confidence. Tomorrow premarket we have the ADP Employment change which some may consider relevant for gleaning insight into this Friday’s Non-Farm Payroll data.

Price managed to work just below Monday’s low before finding buyers overnight. Yesterday we printed a normal variation day after opening gap up. The last 2-3 weeks have been a neutral, fast, range and we are trading in the lower quadrant of last Wednesday’s trend day down.

Early on my primary expectation is for buyers to attempt to push into the overnight inventory and test up to 4365. From here I will look for sellers to come in and work down below overnight low 4347.25. If buyers do not defend at 4338.75 then look for a weekend gap fill down to 4327 otherwise look for trade to balance out around 4350.

Hypo 2 is buyers push up through 4365 and work an overnight gap fill up to 4374.25. Then I will look for them to continue pushing higher above Monday’s high 4381.75 to target a move up to 4397.25.

Hypo 3 is a gap fill up to 4374.25 then sellers push back down to test Monday’s low 4349.50 before we balance out.

Levels in play are highlighted below:

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This week is set to be a wild one. Q1 is coming to an end and the economic calendar is jammed with events including the big dog, Non-Farm Payrolls on Friday morning.

It has been a gnarly quarter requiring tactical positioning and lowered expectations. It will be interesting to see whether we ease into Q2, or if instead it comes in like a lion.

Weekly Strategy Session subs, the latest report should be hitting your inbox shortly. There’s some new content in there courtesy of Exodus. I hope you enjoy it. If you have any questions about the Exodus data presented, shoot me an email [email protected].

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Industries are driven to innovate because of necessity. The finance industry is in a constant state of flux due to the immense resources competing and exponential opportunities that exist. While some would rather observe the conditions and complain about rigging, others are hacking into the system and creating really cool technology to stay competitive.

Benzing is going a step further this year and pitting financial technology companies against each other. Out of over 100 entrants, only one will be crowned the “Most Innovative FinTech Company”. I wouldn’t ignore this battle if I were you.

I’ll be heading over to New York City this upcoming month to attend the awards gala. You should too. It is shaping up to be the Oscars of trading/investing technology.

Click below to see more details about this event:

http://benzingafintechawards.com/

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I like rules, and structure, because it allows me to track outcome and repeat what works.

Twice this week I talked through a trade I’ve been developing using the NAS100 TICK. It’s nothing fancy—just a 3^rd sigma event that happens 5-7 times per week. If it stands up to walk-forward analysis [the back test has a positive expectancy] then I can add it to my intra day Nasdaq repertoire.

Behind the scenes I have been completely absorbed in Exodus. Without spending a ton of time, I can work a layer of fundamental analysis into my trade qualification. The algos help define the holding period and give me a ballpark target to shoot for.   These tools are fantastic for improving trade management skills.

Markets behavior is mixed and aggressive, which is reasonable given the overall nature of Q1. I will have a clearer view of our situation after I build next week’s strategy session.

https://youtu.be/69xUOO9Dyus

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A fire broke out in the East Village this afternoon and again, I am not making light this event because it’s likely some people were hurt.

Everyone wants to look at a fire. It’s like a train wreck, humans just can’t turn away. It’s wired deep into our brains to watch these events unfold.

The fire effectively pinned live-streaming apps Meerkat and Periscope against one another.  If you recall, Periscope is Twitter’s most recent acquisition. I have an important announcement to make:

Periscope, you passed, barely. Do you know what your grade is? F+

The lack of search ability inside the Periscope app was frustrating on my iPhone. I had to keep going to my Twitter app to click links which would open inside the Periscope app, then they would either suck or be over. Then finding a new link inside Periscope was impossible.  So it was back to Twitter.

Am I embellishing this first world problem?  A bit, but a fussy user interface isn’t something mankind tolerates here in the future.

Meerkat worked a bit better for me in the moment.  When I finally was on a good Meerkat feed, @Lanceulanoff said he had 336 on his Meerkat and only 36 on his Periscope. His commentary was not rubbish like the other clown feeds I was stumbling into.  Overall though, I found the UI a bit more pleasant inside Periscope.  It had a little more elegance and a little less black and yellow.

AS FOR THE MARKETS. They’re dangling on the cusp here. Hopefully is sucks a bunch of bears in and squeezes them. That would be best case scenario for ‘this guy’.

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It’s not paranoia if they’re out to get you. Please folks, don’t think I am making light of the plane crash that happened only hours after my SAVE purchase. It is tragic for the souls who perished and their families.   Keep them in your thoughts as they cope with this unexpected tragedy.  I survived a mountain airplane crash, it was a huge relief but an anomaly.  Crashing in the mountains carries a low probability of survival.

The manner by which SAVE traded this morning irks me.  Public disclosure of stops makes me paranoid.

Nevertheless SAVE went right to my soft zone and stalled before finding buyers.  Thus far it has made an avid recovery. If the troglodyte predator algos [intended oxymoron] thought they would snipe me out of a good idea because I was using a physical stop, may they chagrin at their failure and gasp for air as the vice grip of logos constricts their naked person.

In closing, I procured a new position this morning, another slow play. If you truly care to know just shoot me a DM on Twitter [@twosmuth]. CHGG and my Russell theory are still holding up, energy is strong [and I am not concerned with ‘the why’], and the Nasdaq has gone range extension up.

I can work in these conditions. My only concern is GoPro finally getting its act together and I am without exposure.

 

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This is exactly what I have been talking about. You can call it ‘luck of the Fed’ draw, but over the last 10 days we were working within the confines of a PPT oversold signal. I also generated auction data inside the Weekly Strategy Session which also made the case for higher price during the cycle.

But whenever operating outside the cycles, the market is much more erratic. It makes the case for day trading the index but puts some tension in place for multi month swing trading.  Moreover, the primary case it’s making is to drop the hammer when computer brains smarter then me say so, and spend the rest of the time sitting in the shade of a banana tree.  I have no desire to buy any stocks today.

The Russell looks the weakest today but on a relative basis the Nasdaq is leading lower on the week. What’s sketchy about the Nasdaq is we’re now down inside the slip zone from the Fed move meaning, we could slip slide right down it.

Meanwhile in stock land, my new positions are holding up well, so far, but damn, I picked this morning to meet with my tax man and wham, right back in the shit.

Nothing to it but to do it.

Side note – Exodus flagged Overbought on Twitter yesterday with a high degree of accuracy over a 2 day time frame.  For the for the short term trader, does it get any better than this!?  If you were in some weekly call options you were boss hog yesterday, but if you’re still long those bastard instruments right now you’re the castrated male bovine strapped to a wagon.

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I love how the Nasdaq is behaving up here. Hopefully showing you this action in real time has you thinking about the markets more like an auction.

This morning we envisioned 2 ways today’s profile would shape up as the day progressed. Here it is again:

This morning we worked the orange profile (hypo 2 from this morning’s post) up through value and found responsive sellers on the top side of it. Per the Pelican Room (BTW nice work today Pelicanos) notes:

My day was essentially done at that point, but while eating a panini I took to Twitter to share the algorithmic Naz100 TICK occurrence that occurred and a way I have been trading it:

The trade actually gave you a scale and likely a scratch at worst if you managed the long. If I was to take the trade it would only be a scalp because the market had already completed my expected upside progress (hypo 2).

When the market continued lower and especially when it took out opening swing low you could tell the seller meant business but again buyers managed to make some smooth moving counter rotations.

Their attempt from a neutral stance was valiant, but when VPOC shifted back down to 4438 when encouraged sellers to finish their unsettled business by filling that dirty gap below. Good form sellers, good form indeed.

Just a tick below this gap buyers defended though it was all rather predictable and lovely.

This is also day 11 after PPT flagged oversold—another completed cycle and bulls may now reenter the city walls to a reasonable parade, fanfare and libations.

Late last night I was granted access to The Exodus beta. Nearly the entire cloud-mountain is mine to explore before the general population arrives. It is one of the most invigorating experiences of my entire life. All I can say is get excited people.

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The First Commandment This Week is Thou Shall Not Chase

The biggest mistake to make in this environment is chasing a move after it happens. But you also have to avoid putting risk on before anyone else is interested in playing along. It is sort of like being a small girl testing beds and porridge inside a bear den.

Seek out the weak baby cub and take its food and shelter.

Today changes nothing. If anything it makes me MOAR boolish. A big piece of my weekend strategy was oil strength early in the week. So I can check that off the list.

This afternoon selling in the Nasdaq reminds me of the boogie man. The intentions are to generate fear.   People who behave out of fear go down a path of self destruction.

This takes me back to this week’s First Commandment. Chasing is the result of peer pressure. Your friends have jumped from a bridge and are now celebrating with aggressive fist pumping and pelvic thrusts in your direction. You’re afraid they will abandon you if you don’t join in their stupidity, so you take a leap of faith. This was never your idea and you realize it just before you smack the water. Perhaps it’s bad luck but more likely by bad form you hit a low spot and your knees come completely through your body and replace your arms. Your arms have been blown off and are now floating away, and all your friends can offer is solace in the form of fist bumps to your foot-hands.

You cannot survive trading without qualifying ideas on your own. Sloth is a sure journey to insolvency.

I see you pumped and faded my CHGG call and guess what guy?  I don’t care. This is a longer term bet that lazy college students will go hard on Chegg’s services. Plus we all know higher education is the greatest bubble of all time, so how in Sam Hill tranation can this go wrong?

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