Wednesday, February 10, 2016
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
2,266 Blog Posts

Day After Trend Day; First of The Month Logic

YELLEN-MACHINE-GUN

NASDAQ futures are heading into Monday gap down after an overnight session featuring normal range on slightly elevated volume.  Price briefly exceeded the Friday high before spending the rest of the session in a slow-grinding lower but sustaining above the Friday midpoint.

At 8:30am we had Personal Consumption Expenditure data which came out inline.  At 10am we have ISM Manufacturing, and at 11:30am there are 3- and 6-month T-Bill auctions.

Last Friday, despite weak guidance from Amazon, the market opened flat and a strong rally took place early on. The market balanced through the lunch hour then went into trend day up mode to close the week out strong.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4263.75.  From here buyers take out overnight high 4273.  Look for responsive sellers up at 4288.75 and two way trade ensues.

Hypo 2 buyers push up through 4288.75 and sustain trade above it to set up a trend up to 4329.75.

Hypo 3 sellers work down through overnight low 4230.75 but struggle to push below 4225.  Instead responsive buyers step in and work up to 4258 before two way trade ensues.

Hypo 4 sellers accelerate down through overnight low 4230.75 and make a liquidation move down to 4207.25 before two way trade ensues.

Levels:

02012016_NQ_MP

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Predictions for February 1st to 5th

GORDY

Now is not the time to be cute.  Your gut might be telling you the chase is on.  When the market rallies hard your juices start flowing.  These independent oil stocks are up double digits by the hand full.  Facebook is the Berkshire Hathaway of the social media game.

Sentiment analysis is blurry here.  Analysis of sentiment analysis shows a perception that sentiment has made a sharp 180 back to optimism.  I would not be so sure about that.  Let’s disregard everyone’s sentiment for now, shall we?

Data is cold and dead and logical.  The data calls for lower prices on the week.  It comes with a thorny caveat, one that could lash short sellers across the face and scrotum.  Tomorrow is February first, on a Monday.  Seasonal winds statistically favor bulls when a new month starts on Monday.  Paststat’s Kora Reddy wrote an entire book on the matter.

So this is the play: I want strength early in the week.  I will let the bulls have their parade, hopefully chock full of euphoria and jubilee–a pagan celebration becauuse the market monster has been slain and staked to the ground.  Then, come Wednesday, ideally into some smug tweets from one of my bellwethers, I will begin shorting, aggressively.  Or I may just watch from the sidelines whilst methodically operating the futures.

Distinguished Exodus members: the latest Strategy Session has been published.  Inside I cover the latest signaling from my working index model, a recap of last week’s action, and some key context for the upcoming week. Check it out!

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January Ends With Face Ripping Rally

DEAD_PSYCHO

The best rallies in the world come during downtrends.  The first bounce is always shorted too soon, and when these ‘hole’ shorts realize the natural geyser forces are erupting, they are forced to join the bid.

Breadth is nearly 90% on the session, and with February starting on a Monday [and it being a leap year] we are likely to see continued strength through the first three days of the month.

And I am without any position trades.

However I have investments.  Some are doing better, others are Twitter.  But I added a new one this morning–AT&T.  I love the look of this chart, long term, as it finally breaks from a multi-year consolidation.  We are addicted to our smartphones from age 8-80 as Howard would say.  I only want extremely big, stable stocks, and I don’t want to think about them often. Look at this massive consolidation…here’s to hoping the breakout sticks:

T_Feb2016

This way I can focus on dominating the futures markets without distraction.

Programming note: I will be around the interwebs all weekend.  I am doing Exodus demonstrations for members only.  If you want one, email me Vince@BlacklightAnalytics.com

 

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Going Nowhere Fast into Month End

during the NASCAR Sprint Cup Series AAA 400 at Dover International Speedway on September 29, 2013 in Dover, Delaware.

NASDAQ futures are priced for a gap up after an overnight session featuring extreme range and volume. Price managed to mark overnight low early in the session after Amazon earnings spiked the market.  From there price went on to take out the high print from yesterday before settling into balance.  At 8:30am GDP data came out slightly weaker than expectations [0.70% vs 0.80% est] but end consumption beat nicely [2.2% vs 1.8% est].

Also on the economic calendar today, we have Chicago Purchasing Manager at 9:45am, U. of Michigan’s Final January read of Confidence at 10am, and the Baker Hughes rig count at 1pm.

Yesterday we printed a normal variation down.  The market opened gap up and sellers worked into the tape early.  Price managed to go range extension down briefly after 10:30am and found a sharp responsive buyer ahead of Wednesday’s low.  From there the market formed an excess low and initiative buyers [initiative relative to the excess low, responsive relative to the open] struggled and were unable to take out session high.  Price ultimately settled at the mid after Amazon earnings spiked price lower during settlement period.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4154.50.  Look for responsive buyers ahead of 4135 and two way trade to ensue.

Hypo 2 sellers close overnight gap down to 4135 then take out overnight low 4128.50.  Look for a move down to 4110 before responsive buyers step in.

Hypo 3 buyers work in early and push price up through overnight hgih 4198.50 to test the 4200 century mark.  Look for responsive sellers at the NVPOC at 4202.

Hypo 4 buyers sustain trade up around the 42020 NVPOC setting up a move to target the open gap up at 4226.75.

Levels:

01292016_NQ_MP

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The Flint, Michigan Water Trade [No Lead]

UNITED STATES - JUNE 17: Rep. Dan Kildee, D-Mich., speaks to a group of students from the Saginaw Public Schools Centric Program on the House steps on Wednesday, June 17, 2015. (Photo By Bill Clark/CQ Roll Call)

Any decent person should be asking themselves, “How can I take advantage of the dire situation faced by the citizens of Flint, Michigan?”  A more basic thinker may become outraged and channel their energy into standing on the street holding signs and shouting.  Emotions are not going to fix Flint’s water.  Actions will.  In the process a select few will make a fortune.  They always do.  However, the speculator has a potential swing trade opportunity in this mess: the Water Utility Industry.

Today’s rally is meh..concentrated to oil plays and internet stuffs (Paypal, Facebook, Amazon, Google, all good things).  On a sector-wide basis Utilities are leading.  And which Utility industry is taking home the win?  Water.

These stocks have been on insane runs already, over the years but with ‘The Nerd” aka Michigan Governor Snyder poisoning hundreds of thousands of children there may be room for Water Utility stocks to keep running.

There is something to learn from this mess.  For-profit companies do a better job of managing municipal water systems then the state.  It is an inherent victory for capitalist and sends a distinct message to the socialists heavily populating the Face’dbook–capitalism wins.  Here are the companies avalible for ownership in the water industry:

WATER-iBankCOin

My favorites are AWK and AWR.  Now listen closely to me–nothing in life is free.  Just because you came to exist on planet earth doesn’t mean you are entitled to water.  You want good water, you pay, else drink from the wretched river ways of the industrial complex.

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I Can Help If You Let Me

IWANTTOHELP

If you signed up for Exodus, the world’s most powerful market intelligence platform, and you want to completely understand the software then sign up for a live demo.

I will walk you through the features and answer any questions you have.  iBankCoin offers my services to you as part of your membership.  These live demonstrations take place over the phone and usually last about 30 minutes.

If you are interested, send me an email at Vince@BlackLightAnalytics.com

You already invested in yourself by signing up for Exodus.  Let us help you be successful.  I am a nice guy.  If you have a one-off question, ask it in the comment section below, on Twitter @IndexModel, or on Snapchat at VCali.

Cheers and good luck!

 

 

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Extremely Balanced Night Session

night_session_balance

NASDAQ futures are coming into Thursday gap up after an overnight session featuring extreme range and volume.  Price managed to trade within yesterday’s range in nearly symmetrical balanced trade.  At 8:30am Durable Goods data came out way below expectations.  At the same time, Initial/Continuing Jobless claims data was mixed.  The initial reaction is selling.

Also on the economic calendar today we have Pending Home Sales at 10am and a 7-Year Note auction at 1pm.

Yesterday we printed a neutral extreme down.  The data started with a gap down and sellers driving price lower.  Just moments after the first hour of trade completed, a strong responsive bid was found right at last Thursday’s naked volume point of control 4153.  Buyers pressed through the entire range and put the market Neutral ahead of the FOMC rate decision.

Third reaction yielded a mixed, but consensus sell signal and we pushed lower, taking out the lower ATR band before finding responsive buyers deep inside last Thursday’s range.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4128.50.  Look for responsive buyers to defend here, keeping us from testing yesterday’s low 4102.  Two way trade ensues with a price ceiling around 4180.

Hypo 2 sellers push the gap fill down to 4128.50 then continue lower to test below yesterday’s low 4102.  This triggers a liquidation.  Downside target is 4070.

Hypo 3 buyers gap-and-go.  Price works up though 4180 and sustains trade above it setting up a move to take out overnight high 4190.  Responsive sellers step in at 4211 and two way trade ensues.  Stretch targets are 4225 then 4247.50.

Hypo 4 sellers push into overnight inventory but cannot fill gap down to 4128.50.  Instead buyers defend 4140 and the market spends the rest of the session working higher to take out overnight high 4190.

Levels:

01282016_NQ_MP

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Today’s Big Winner? Regional Banks

BANKBUST

The patient NASDAQ resumed its tenacious 2016 fits this morning as it chewed on a stinky -5% gap down in Apple.

Buyers stepped in front of the early selling, and with Yellen still on deck, they had reason to back off and allow buyers their fun.  Sometimes the price action looks like ping pong.  Today it more resembled volleyball.

The game ended and sellers took home the victory.  Participants expect rates to continue higher–today’s primary industry rotation suggests exactly that.  A concentration of Regional Banks spattered across the top gainers list:

Regional BANKS

Market behavior suggests participant are not too thrilled about the tone of The Fed, nor do they desire to fight with Grandma Yellen.

I like the volatility The Fed’s liftoff path is putting into the futures.  There are lots more nuts for a squirrel like me to collect.  But I also do not intend to resist The Fed.  I have no position trades (2-12 day holdings) on the books.

So everything sucks in 2016 except Utilities and now Regional Banks.  My REIT is kicking ass too–something I was told would not happen in a rising rate’s environment.  Meh…

Industry is dead.  Long live the regional bank manager.

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Fed Day: Best Day of The Month

Wardaddy (Brad Pitt) in Columbia Pictures' FURY.

NASDAQ futures are priced to come into Wednesday gap down after an overnight session featuring extreme range on elevated volume.  The session’s price action was balanced overall and price was contained within yesterday’s range while traversing most of it.  At 7am MBA Mortgage Applications came in slightly below expectations.  The initial reaction was buying.

The economic calendar is busy today.  The biggest event comes at 2pm when we hear the FOMC Rate Decision.  This is the highest impact event for the marketplace.  We also have New Home Sales at 10am, crude oil inventory at 10:30am, a 2-Year Floating Rate Note auction at 11:30am, and a 5-Year Note auction at 1pm.

Yesterday we printed a normal variation up.  The morning gap up was faded and filled.  A push back down into last Thursday range (01/21) was rejected by responsive sellers who spent the rest of the session working higher.  Price stalled out at the Monday VPOC around 4236 and closed just below the level.  After the bell, Apple earnings caused a bit of volatility.

Heading into today my primary expectation is for buyers to press into the overnight inventory but struggle to close the gap up at 4226.75.  Instead sellers stall out around 4222 and two way trade ensuses, taking out neither overnight high or low until we hear the afternoon FOMC rate decision.

Hypo 2 buyers push a full gap fill up to 4226.75 and sustain trade above it.  Initiative buyers come in ahead of the FOMC rate call and work price up through overnight high 4237.25.  Look for price to continue higher to target 4247.50 before finding responsive sellers and two-way trade ensues.

Hypo 3 sellers push off the open and work down to 4183.75 before tight, two-way trade takes hold ahead of the FOMC rate decision.

Hypo 4 sellers accelerate down through 4183.75 and sustain trade below it to set up a leg lower to take out overnight low 4177.50.  Look for responsive buyers just below the level and two way trade to ensue ahead of the Fed.

Watch for the third price reaction after the FOMC rate decision to provide market direction into the end of the week.

Levels:

01272016_NQ_MP

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Desert Rumor: Nevada Will Buy Rooftop Solar for 20 Years

The Man burns during the Burning Man 2013 arts and music festival in the Black Rock Desert of Nevada, August 31, 2013. The federal government issued a permit for 68,000 people from all over the world to gather at the sold out festival, which is celebrating its 27th year, to spend a week in the remote desert cut off from much of the outside world to experience art, music and the unique community that develops. REUTERS/Jim Urquhart (UNITED STATES - Tags: SOCIETY TPX IMAGES OF THE DAY) FOR USE WITH BURNING MAN RELATED REPORTING ONLY. FOR EDITORIAL USE ONLY. NOT FOR SALE FOR MARKETING OR ADVERTISING CAMPAIGNS. NO THIRD PARTY SALES. NOT FOR USE BY REUTERS THIRD PARTY DISTRIBUTORS ORG XMIT: BRC186

This comes from Politico writer Esther Whieldon.  Apparently Nevada Public Utilities Commission wants to allow about 15,000 rooftop solar customers the right to sell back power to the grid for 20 years.

Solar City is going bananas on the news, but is still down a whopping -30% year to date.

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