Back To The Scene of The Crime

NASDAQ futures are flat up 14 now up 8 points after an extreme session. Both range and volume are beyond second sigma as traders digested a myriad of news items including a 7:38am headline snafu at the Financial Times regarding the ECB rate decision at 7:45am. At 8:30am Initial/Continue jobless claims data was in-line with expectations.

Also on the economic docket today we have a huge 10am log including Factory Orders, ISM Non-manufacturing Composite, and the start of Yellen appearing before the Congressional Joint Economics Committee.

Yesterday we printed a neutral extreme down day. Price briefly went range extension up, by one point, before falling back through the entire range and closing in the lower quadrant. The action managed to make new contract high before rolling over. It also exceeded The low from Tuesday, briefly, before responsive buyers defended. We are seeing another strong defense of these prices again right now as we head into cash open.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4694.25. Look for buyers to show up here and work up to 4720.

Hypo 2 buyers push up through 4720 to target overnight high 4730.25. Look for responsive sellers at 4736.75 and two way trade to ensue.

Hypo 3 sellers close the gap down to 4694.25 and take out overnight low 4675.25 to close the Monday gap down at 4674.25 before responsive buying and two way trade.

Hypo 4 liquidation takes hold. Take out the Monday gap 4674.25 and target a move down to 4664.50.

Levels:

Failed auctions are a theoretical price behavior you want to be on the lookout for.  In a year rife with cataclysm and maleficent trading actions, the failed auction has precluded many fast moves.  Today the NASDAQ printed two layers of failed auctions.

The first was on a micro scale.  At 10:45:28.73 the NASDAQ went range extension up by one point and then promptly fell back down to the mid.  The session was slow and I did not give it much weight.  However, it was noted in Switchboard which pushed my bias from long to neutral:

But on a swing level, we made new contract high today.  When the afternoon liquidation wave rolled through, it gave the daily chart a distinct failed auction tone.  The move was news driven (in more way than 1) thus its reasonable to expect a ‘check back’ to about 4720 near term.  However, how today’s print stands, it can be trouble.  The key is whether the failed auction is confirmed via a swift down move soon (sort of like we saw happen today, above) See below:

I am not overly worried yet.  The same thing happened in Facebook back in October and buyers managed to negate the action.  But keep in mind, these failed auctions often preclude some fast moves, so protect your neck.

Here we go, ISIS just released a video that allegedly shows the beheading of a Russian spy.

The grizzly video is titled “You Shall be Disappointed and Humiliated, O Russians.”

Somehow I doubt that.  Godspeed mother Russia.  Eliminate the savage ISIS.

Listen, you can watch the uncut video here but it is graphic: http://breaking911.com/59129/

Shares of cosmetic catalog distributor Avon spiked on rumors Oprah is considering taking a stake in the company.

The rumor comes not long after her recently announced 5% purchase of Weight Watchers.  She has done well for herself already in WTW; the stock is up over 250% since she joined.

This is a good rumor because Avon is in the Oprah wheelhouse.

AVP has traded like dog meat so far this year, down around 50%.  If anyone can turn this year around in a jiffy, it’s the O.

Futures are flat on the NASDAQ after an overnight session that featured normal volume and range. The Globex session was balanced with price holding up above the high print from yesterday. A wave of selling pushed through around 7am when the Russian defense ministry released evidence of Turkey purchasing ISIS oil. At 7am MBA Mortgage Applications came in better than expected. Same goes for ADP Employment Change which was released at 8:15am.

On the economic docket during the cash session we have crude oil inventory data at 10:30am. Yellen is set to speak at 11am but her testimony takes place tomorrow. I am not sure if today will have much impact on the markets but it is work keeping in mind. We also have the Fed Beige Book at 2pm.

Yesterday we printed a normal variation up day. Price opened gap up and buyers were seen defending the gap. Later in the day aggressive buying managed to close out the session near up at the high.

Heading into today my primary expectation is for sellers to push down and test down to 4703.50. From there look for responsive buyers who make a move on overnight high 4728.75. Just above at 4729.50 is contract high. Look for a push above it to target 4735.50 then two way trade ensues.

Hypo 2 sellers push down through 4700 to target 4693.75. Look for responsive buyers down at 4691.25 and two way trade to ensue below 4710.

Hypo 3 strong buying early, up through 4735.50 and exploration of new highs.

Hypo 4 liquidation takes hold. A push down through 4691.25 sets up a gap fill trade down to 4674.25.

Levels:

In a series of areal and space surveillance pictures and videos, the Russian defense ministry has identified several smuggling routes used to transport ISIS oil to Turkey.

The footage, shown during an ongoing briefing on counter-terror findings, goes as far as identifying trucks full of oil moving through the Syrian-Turkish border.  The defense ministry says they have more information to present next week showing Turkey helping the Islamic state.

In classic Russian form, they had a great quote about their enemy:

“Terrorist without money like animal without teeth”

These findings are being released just a week after a Russian military jet was aggressively shot out of sky by Turkish military.  It seems the Russians found a new country to annihilate.

US Futures moved to session low on the news.

Congratulations to Priscilla and Mark on their new baby.  In a heartfelt Facebook note, the new parents wrote a decree to their daughter, Max, promising to give 99% of their Facebook stock away as part of their mission to advance human potential and promote equality for all children in the next generation.  Two of the main areas they want to invest their resources in are medicine and education.  In particular, they see a huge opportunity in curing disease:

“Consider disease. Today we spend about 50 times more as a society treating people who are sick than we invest in research so you won’t get sick in the first place.  Medicine has only been a real science for less than 100 years, and we’ve already seen complete cures for some diseases and good progress for others. As technology accelerates, we have a real shot at preventing, curing or managing all or most of the rest in the next 100 years.  Today, most people die from five things — heart disease, cancer, stroke, neurodegenerative and infectious diseases — and we can make faster progress on these and other problems.  Once we recognize that your generation and your children’s generation may not have to suffer from disease, we collectively have a responsibility to tilt our investments a bit more towards the future to make this reality. Your mother and I want to do our part.”

Major life events like birth and death tend to bring forth our clearest thoughts on how to live life as we hurl around the sun on spaceship earth.  Mark sees medicine (biotechnology) and education as the two biggest opportunities to make the world better for his daughter.  Interesting.  You can read the full note by clicking here.

PS – THIS IS BULLISH FOR FACEBOOK

The best time to share your bearish research is right when a stock is making a new swing high.  You want demand to completely vanish at these new price levels, therefore rendering the market susceptible to a fast move in the opposite direction.

The fake breakout/breakdown has been the most actionable swing trade setup for nearly a year now.  I use it almost exclusively to choose (and avoid) trades.

Perhaps Mark Spiegel and his consortium of short sellers have seen this pattern’s effectiveness and thus chose today to share their linkfest of a report decrying the proprietary technology of Tesla Motors.  Or they do not look at price charts whatsoever and this is a mere coincidence.  Nevertheless, he is defending his TSLA short today, while touting his degenerate long position in some penny stock named ELON.

Cool reports bruh.  I will stick with Tesla though.

Price is set to gap up heading into December after an overnight session featuring normal range and volume.  Soon after the closing bell buyers pressed the market up through the high print set Monday at 4694.75 before the market came into balance.

Today at 10am Construction Spending and ISM Manufacturing data is released.  We also have Fed Evans speaking in on economic policy at 12:45pm.

Yesterday morning sellers stepped in and our week began with selling pressure.  Price pushed about half way down into the range from last Tuesday before responsive buyers stepped in.  The overall print was a normal variation down.

Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 4674.25.  Look for responsive buyers to make an effort here but be overrun as sellers target overnight low 4671.75.  Buyers defend 4670 and two way trade ensues.

Hypo 2 buyers are active above 4678 and press higher to take out overnight high 4696.50.  Look for a move to test above last Monday high 4706.75 before responsive selling comes in.

Hypo 3 strong selling pushes gap fill 4674.25, take out overnight low 4671.75, then press down to 4660.  Trade is sustained below 4670 setting up a liquidation leg to test below Monday low 4653.50.  Look for responsive buyers at 4647.50.

Levels:

You have to wonder if Charlie Brown and his band of misfits would be holding the top spot on Twitter trends had Verizon not infused the Cyber Monday hastag with aggressive promotion. The consumer is to be celebrated and recognized no matter the cost.

Either way, it was your obligation as a citizen of the United States to shop the interwebs. The deals are there for the taking, right from the comfort of your living room.

PUBLIC SERVICE ANNOUNCEMENT: California, you still have 4 solid hours of internet shopping left. Go to your local library and ‘surf’ to Walmart for deals on neon tank tops and whatever else you wear to your beaches and deserts.