NASDAQ Compressing Ahead of BREXIT Vote; More Testimony from Yellen on Deck

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume.  The Globex session was balanced, holding the range set yesterday during regular trading hours.  At 7am we saw an uptick in MBA Mortgage Applications, the index was negative on the last read [act. 2.9% vs -2.4% prior].

Also on the economic docket today we have House Price Index at 9am and Crude oil inventory data at 10:30am.  Janet Yellen will be on Capitol Hill for a second day, this time testifying to the House Financial Services Committee about monetary policy at 10am.

The BREXIT vote is tomorrow.  The market tipped its hand Sunday night, reacting as emphatically as it did to bookmakers offering better odds the voters will choose to remain part of the EU.  The reaction made it clear the market, overall, is waiting for this uncertainty to settle before choosing direction.

Yesterday we printed a neutral day.  Price opened gap up, drove higher briefly, went range extension down and closed the overnight gap, then pushed up through the range to go RE up, then settled back on the daily mean.

Heading into today my primary expectation is for buyers to make a little push off the open, a squeeze up to MCVPOC at 4425 before sellers come in and work the overnight gap fill down to 4400.75 and two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 4400.75.  Look for responsive buyers down at 4393.75 and two way trade to ensues.

Hypo 3 a rally takes hold, pushes up through 4425 and sustains trade above it, setting up a move to 4442.25 then 4449.25.  Stretch target is open gap at 4458.50 .

Hypo 4 liquidation takes hold, pushes the market down below Monday’s low 4885 and closes the weekly gap down at 4359.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight—initially with a burst of buying just after U.S. cash market close yesterday (which was faded) then by a slow march higher for the remainder of the evening.

Janet Yellen has to testify to the Senate Banking Committee about monetary policy today at 10am.  We have 4- and 52-week T-Bill auctions at 11:30am and a 5-year Note auction at 1pm.

Yesterday we printed a neutral extreme down.  The week began with a pro gap up and buyers drove price higher off the open.  Just after the first hour of trade, and rather briefly, the market went range extension up.  Shortly after strong responsive selling came in, first working price down through the daily range then accelerating the liquidation down into the open gap.

Heading into today my primary expectation is for sellers to work into the overnight inventory and test the 4400 century mark.  Look for buyers here and then a move to take out overnight high 4415.75.  Look for price to continue higher, up to 4429 before two way trade ensues.

Hypo 2 sellers complete a full gap fill down to 4389.50 then take out overnight low 4388.25 setting up a test of Monday’s low 4385.  Look for responsive buyers down at 4374.75 and two way trade to ensue.

Hypo 3 buyers gap-and-go higher, take out overnight high 4415.75 and sustain trade above 4429 setting up a move to target 4442.50 then 4450.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into the week pro gap up after an overnight session featuring normal range and volume.  The Globex session opened gap up and went into a slow up trend.  Price is already beyond the week’s upside measured move target, currently priced near last Thursday’s high.

See also – The BREMIAN Camp Reigns Glorious; Markets Set To Explode In a Cocaine Cloud on Open

On the economic docket today we have 3- and 6-month T-Bill auctions happening at 11:30am and a 2-year note auction at 1pm.

Last week the NASDAQ worked lower.  There was a flash of upside after the FOMC rate decision that was ultimately faded.  The NASDAQ was the weakest index, however, while the other major indices saw bullish divergences into the end of the week.

Friday the NASDAQ opened gap down and sellers drove lower off the open.  A small rally took hold through lunch but was ultimately faded to end the week.

Heading into today my primary expectation is for sellers to push into the overnight inventory a bit.  Look for a move down to test the 4400 century mark.  Look for responsive buyers (responsive relative to the open, initiative relative to last week’s close) to step in at these prices and work us up through overnight high 4420.50.  Look for sellers up at 4424 and two way trade to ensue.

Hypo 2 buyers gap-and-go.  Push up through 4424 early on setting up a move to target 4442.50.  Additional upside targets are 4450 then a stretch target of the open gap at 4458.50.

Hypo 3 full gap fill lower.  First sellers have to take out overnight low 4382.75.  Look for buyers to defend down at 4375.25 but ultimately they are overrun as the market continues lower to target gap fill down to 4359.

Look for the bond auctions around 11:30am to sort out any debates occurring at-or-near a major price level and to set the tone for the remainder of the day.

Levels:

Volume profiles, gaps, and measures moves:

Sitting up here, a touch below all-time highs, it seems foolish to expect a bears to claw the eyes of out of bulls, triggering a disorderly rout. Yet the model I build by hand, each-and-every week inside Exodus [Want to read it? free trials till noon Monday: exodus.iBankCoin.com/free-trial] is suggesting exactly that, a high panic rout—complete with shrinking exits and investors returning to basic flight instinct.

But, not.just.yet.

Do not consider this a bold call, but rather a vision of how the next 10 trading days will transpire.

The Next Five Trading Days

Look for a hard move lower, a shakeout, perhaps a big gap down Monday.  This encourages a strong responsive buy and a reflex rally that lasts through the week and into the weekend.

The Following Week

Everything unravels like we saw at the beginning of the year.

I have no idea if this indeed will happen.  Overall I take it one week at a time.  This week, I intend to cover my SQQQ short into any weakness I see early in the week and also perhaps add long exposure via a Utility or Staple.  These sectors are likely to resist overall market downturns, and if I am wrong about the big down move I see on the horizon, these will prove decent entries.

Then, as early as Friday and perhaps as late as next Tuesday I will re-initiate shorts, perhaps in the NASDAQ or the Russell, and ideally from higher prices.

That is all.

Exodus Members, the 83rd Edition of Exodus Strategy Session is out.  Go check out the Executive Summary at the least, the entire report if you want to gritty details, and let me know what you think in the comments below.

HAPPY FATHERS DAY LADS.  I am proud of you for making adult decisions, wishing you good tidings and gender-neutral bathrooms for your kin.

Yesterday, June 16th, at 11:30am Eastern someone mashed the ‘risk on’ button with a semi-truck full of money, sending a statistically rare shock wave through the New York Stock Exchange.

THERE IT IS: HUGE NYSE TICK…

Biggest since 5/12 at 2:18pm

We have a big responsive bidder?

— Raul (@IndexModel) June 16, 2016

Naturally, a steam whistle blew on MotherShip alerting me to the disturbance.

The method of detection was NYSE TICK, which achieved outlier levels [3rd sigma, 99.7th percentile].  Let’s not forget, any one of you, that my NYSE TICK is a bit more raw then the packaged bits most traders see.

The best I can do is share my observations of past occurrences of extreme NYSE TICKS because I have not yet coded and tested these observations over a significant sample.

OBSERVATION 1:

You can ‘go with” the NYSE TICK, intraday and catch a rotation beyond where the TICK eruption initially peaked out, putting your risk down around where Fibonacci resides, working the same side of the tape as this whale.

OBSERVATION 2:

The exuberance of the massive NYSE TICK happens near the end of a move.  A crescendo, if I may be so bold.

Herein lies the quandary.  This massive uptick happened 6 days into the hole of a NASDAQ sell-off, a regular horror show of summertime tape.  Something the models inside Exodus kept members clean out of with precision timing, to the week.

See Also – Research Reports from iBankCoin Laboratory Keep Investors One Step Ahead of June Markets

So it was a totally different animal than your normal NYSE TICK.  Now, had it been an extremely negative TICK, sure, party pooper signal, the bear raid is nearly complete.  It’s best we bears clear out, before the Brits catch wind of us with their hounds, horses, and rifles—and make way for a return to higher prices.

For these reasons, and MOAR, I stuck with my NASDAQ short into the weekend.

Trading nerds only: I Snapchat traded [username: VCali] AMZN $707.50 puts yesterday, and ended up scratching the position for a small loss.  Short-dated options on super high price tag stocks suck.  Literally, the suck you dry by the minute.  Had I a less draconian way to short Amazon, I could have seen then position through to the $700 price target.

PS the headline photo was a grab from MikeDiva’s latest video.  It is insane and brilliant:

NASDASQ futures are coming into Friday gap down after an overnight session featuring normal range and volume.  Price worked higher, initially overnight before finding sellers ahead of Wednesday’s high—the same region sellers defended during the initial spike higher post-FOMC rate decision.  Since then we have pushed lower, back down into the upper-quadrant of yesterday’s range.

On the economic docket today we have Housing Starts and Building Permits at 8:30am and Baker Hughes Rig count at 1pm.

Yesterday we printed a neutral extreme up.  The market opened gap down and sellers drove price lower off the open.  Then, just 1-tick below the 05/23 gap fill a strong responsive bid stepped in.  Just before NYC lunch a massive buy program hit at the NYSE.

THERE IT IS: HUGE NYSE TICK…

Biggest since 5/12 at 2:18pm

We have a big responsive bidder?

— Raul (@IndexModel) June 16, 2016

That pushed the NASDAQ up through the daily mid.  Price then retraced lower one last time before a huge secondary thrust pushed us neutral.  Buyers tacked on an additional ramp higher late in the session.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4417.  From here they continue working higher to 4422.25 before sellers step in and push down through overnight low 4409.50.  Buyers are just below here and two way trade ensues.  In other words, marking time/chop.

Hypo 2 buyers close overnight gap up to 4417 then set their sights on overnight high 4432.50.  The continue higher to target 4442.50 before two way trade ensues.

Hypo 3 sellers push down through 4409.50 off the open and go test the 4400 century mark.  Buyers defend and two way trade ensues, perhaps working up to close overnight gap 4417.

Hypo 4 strong selling pushes down through 4400 and sustains trade below it setting up a move to 4389.50 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Thursday gap down after an overnight session featuring normal range and volume.  Price worked lower, down through the lows set back on 05/24, a major reference day for the market.  Just below the 05/24 lows, around 3am, buyers showed up and two-way trade ensued.  At 8:30am Core CPI data came out inline [0.20% vs 0.20% est] and Philadelphia Fed Manufacturing Index beat expectations [4.70 vs 1.10 est].

Also on the economic docket today we have NAHB Housing Market Index at 10am.

Yesterday we printed a neutral extreme down.  NASDAQ opened gap up and after a slow opening auction sellers pushed the market range extension down.  Just after 2pm, after the FOMC rate decision, the market spiked to a new session high, putting the day into a neutral print.  After nearly an hour of grinding debate, sellers broke the market lower and close it near session low, thus morphing the neutral profile into a neutral extreme.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4404.75.  Look for sellers to defend this area aggressively and reverse the market.  We then work lower to take out overnight low 4374.  Look for responsive buyers down at 4367.25 and two-way trade to ensue.

Hypo 2 sellers gap-and-go, push down through overnight low 4374 early on and then sustain trade below 4367.25 setting up a liquidation down to 4350 before two way trade ensues.

Hypo 3 strong buyers close overnight gap up to 44047.75 then take out overnight high 4409.  This sets up a move to target 4425.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

A fella by the name of Milo Yiannopoulos is causing quite the stir on Twitter today after the company briefly suspended his account.

The suspension occurred after several death threats were lobbied at his person.  Milo planned to give a press conference on Islam and gays down in Orlando, following the terrorist attack on Pulse, a club predominately attended by gay people.

Shares of Twitter have been running like a banshee the last three days.  The stock is up over 15% this week.  Perhaps the upward move is driven by Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud accumulating more ownership of the company.  According to recent filings, the Saudi prince now owns more TWTR shares then the company’s CEO Jack Dorsey.

The Twitter ban on Milo resulted in the #FreeMilo hashtag trending worldwide.  Twitter’s authoritarian behavior and sharia-compliance also made  front page on Drudge Report:

Shares of Twitter are the ultimate tragedy play.  The platform is designed to excel when terrible things happen and news is breaking fast.  They even have Periscope, aka an army of eyeballs everywhere to capture…well mostly fires.

Twitter also loves a dog tape.  So while summer stock markets are looking super sketchy, Twitter is looking bullish fam.

Meanwhile, stay tuned as we await comments from Twitter LOLZ

We're approaching Twitter for comment. Do we have to do it in Arabic, @jack?

— Milo Yiannopoulos ✘ (@Nero) June 15, 2016

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume.  Price was balanced for most of the evening, then began steadily working higher early this morning.  Sellers were found just ahead of Monday’s midpoint and two-way trade ensued.  At 7am MBA mortgage were well below last week’s reading, -2.4% vs 9.3% the prior week.

There are several economic data points due out today, them most important being the 2pm FOMC rate decision.  At 9:15am Industrial/Manufacturing Inventory numbers will drop, at 10:30am crude oil inventories, and at 4pm Long-term TIC Flows.

See Also – Cashin: Markets Are Scared of BREXIT and German Bond Yields

Yesterday we printed a normal variation down.  The market opened gap down and was met with strong responsive buying which took price up to Monday’s value before a strong seller came in and pushed us range extension down.  Bidders stepped in before lunch and two way trade ensued.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4418.25.  From here look for price to continue working lower and take out overnight low 4406.25.  Look for responsive buyers down at 4400 and two way trade to ensues ahead of the FOMC minutes.

Hypo 2 buyers step in ahead of 4420.75 and price takes out overnight high 4435.75.  Look for responsive sellers up at 4442.50 and two way trade to ensue ahead of the FOMC minutes.

Hypo 3 gap-and-go higher, push up through 4435.75 adn target 4449.50 then the open gap up at 4458.50 ahead of the FOMC minutes.

Look for the 30 minutes after the Fed to provide market direction into the close of the week.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Tuesday gap down after an overnight session featuring normal range and volume.  The session was balanced, overall, but price continued the trajectory set last Thursday, which is lower.  At 8:30am Advance Retail Sales came out slightly better than expectations.

Also on the economic docket today we have Business Inventories at 10am and a 4-week T-Bill auction at 11:30am.  Also, the gravity of tomorrow afternoon’s FOMC rate decision is likely start altering the behavior of the market place—putting price into a wait-and-see range.

Yesterday we printed a neutral extreme down.  We came into the week gap down and buyers made a spirited push off the open.  They struggled to sustain priced inside last Friday’s range, printing several excess highs.  The final blow came just after buyers pushed the market range extension up, by 2 points, then fell back down to daily mid.  Sellers stepped in and pushed us neutral.  After a another return to the daily mean, price pushed lower and closed on session low.

Heading into today my primary expectation is for buyers to push into the overnight inventory and close the gap up to 4418.25.  Look for responsive sellers up near 4430.50 and two way trade to ensue.

Hypo 2 buyers sustain trade above 4420 after closing overnight gap 4418.25 setting up a move to 4450.

Hypo 3 sellers defend ahead of 4418.25 setting up a move to target overnight low 4397.50 and triggering a liquidation down to 4367.25.

Levels:

Volume profiles, gaps, and measured moves: