Monday, August 29, 2016
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
2,572 Blog Posts

Failed Auction Alert on NASDAQ

turmoil

NASDAQ futures are coming into Wednesday with a slight gap up after an overnight session featuring normal range and volume.  Price worked lower until about 3am, right down to the MCVPOC at 4805 before printing a v-shaped bounce back to Tuesday’s close.  At 7am MBA Mortgage Applications came in lower than last week’s reading.

Also on the economic calendar today we have Existing Home Sales at 10am, crude oil inventories at 10:30am, a 2-year Note auction at 11:30am, and a 5-year Note auction at 1pm.

Yesterday we printed a normal variation down after taking out swing high.  The nature of this move, taking out swing high then swiftly reversing, elevates the possibility of a failed auction, a price pattern that has marked inflection points in recent history.

Here’s a look at the potential failed auction on the NASDAQ:

Failed-auction-08242016

Note: the same event happened on the S&P 500 yesterday.

Heading into today my primary expectation is for sellers to push into the overnight inventory and take out overnight low 4805.25.  We’re going to test down through our balance and probe the other side of it, most likely, now that the topside has failed.  Look for a move down to 4796.50 before two-way trade ensues.

Hypo 2 buyers show up in the VPOC zone from 4805 – 4795 and we chop about in this region all day.

Hypo 3 buyers show up around 4812.50 and the push up through overnight high 4823.50.  They continue higher, up through Tuesday’s high 4836.75, effectively negating the failed auction.  Look for sellers up at 4839 and two way trade to ensue.

Levels:

082432016_NQ_MP

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Reports from The Far East Show A Mature Semiconductor Cycle

ghangis-khan

The semiconductors have enjoyed a renaissance over the the summer, with the PHLX Semiconductor index is up nearly 25% since May.

phlx-renn

However a Digitimes report out of Taiwan Wednesday show orders from Intel slowing down:

Josephine Lien, Taipei; Jessie Shen, DIGITIMES [Wednesday 24 August 2016]

With Intel decelerating its pace of orders for baseband chips, utilization rates for TSMC’s 28nm processes are set to drop slightly in the fourth quarter of 2016, according to industry sources.

A pull-in of orders for smartphone-related chips has heated up and filled TSMC’s 28nm process capacity with utilization rate reaching 110% in the third quarter, said the sources. However, orders for baseband chips from Intel are slowing down which will likely drag down the foundry’s 28nm utilization rate in the fourth quarter, the sources indicated.

TSMC’s 28nm process utilization rate is expected to experience its first sequential fall since 2016 in the fourth quarter, the sources noted. Nevertheless, TSMC has enjoyed strong demand overall for 28nm chips since 2012, the sources said.

In addition to brisk orders for smartphones, TSMC’s 28nm processes have attracted orders from major set-top box (STB) companies including Realtek Semiconductor, MStar Semiconductor and ALi, the sources indicated. China-based HiSilicon, which is contracting TSMC to make its handset chips, also has STB solutions manufactured using TSMC’s 28nm process technology, the sources said.

Brisk orders for smartphone chips including related peripheral ICs, as well as STB chips, already filled TSMC’s 28nm process capacity in the first half of 2016, the sources said.

Just last Monday Needham put out a harsh assessment of Micron Technology,  the strongest performing semiconductor stock during the chip run.

It is hard to bet against semiconductors up here after breaking free from several years of range, but technical reports are starting to lean bearish as summer comes to an end.

In terms of investing and trading, watching the acceleration and slowing of underlying orders is rarely actionable.  However it does provide some context on where we may be in the cycle of a rally.  Perhaps a short-squeeze of the fundamental variety is in order?

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Pay To Play: AP Bombshell Reveals A State Department For Sale During Clinton Regime

clint-found

The Associated Press obtained State Department calendars, and upon review they found most people outside the government who met with Hillary Clinton during her tenure as Secretary of State gave money to the Clinton Foundation.

WASHINGTON (AP) —At least 85 of 154 people from private interests who met or had phone conversations scheduled with Clinton while she led the State Department donated to her family charity or pledged commitments to its international programs, according to a review of State Department calendars released so far to The Associated Press. Combined, the 85 donors contributed as much as $156 million. At least 40 donated more than $100,000 each, and 20 gave more than $1 million.

If a private sector civilian wanted to sit at the big girl table over in Washington, they had to grease the wheels at the Clinton Foundation.

Maybe the donation puts you on the books for some face time with Hillary, or perhaps it buys you a 10 minute phone call.  A charitable donation first, then a meeting, a bit more charity, and finally the State Department clears up the obstacle.

Now set the private sector aside.  Foreign countries had to buy in also:

Clinton met with representatives of at least 16 foreign governments that donated as much as $170 million to the Clinton charity, but they were not included in AP’s calculations because such meetings would presumably have been part of her diplomatic duties.

The Clinton Foundation took in nearly $200 million dollars from 16 foreign governments.  They presumably paid these fees for special access to State Department intelligence and access to key personnel inside the state.

One of the private meetings was with Muhammad Yunus, the Bangladeshi economist who pioneered micro-loans which are low-denomination loans given to extremely poor people in developing countries.  Said loans often carry usurious interest rates.

Muhammad Yunus, a Bangladeshi economist who won the 2006 Nobel Peace Prize for pioneering low-interest “microcredit” for poor business owners, met with Clinton three times and talked with her by phone during a period when Bangladeshi government authorities investigated his oversight of a nonprofit bank and ultimately pressured him to resign from the bank’s board. Throughout the process, he pleaded for help in messages routed to Clinton, and she ordered aides to find ways to assist him.

American affiliates of his nonprofit Grameen Bank had been working with the Clinton Foundation’s Clinton Global Initiative programs as early as 2005, pledging millions of dollars in microloans for the poor. Grameen America, the bank’s nonprofit U.S. flagship, which Yunus chairs, has given between $100,000 and $250,000 to the foundation — a figure that bank spokeswoman Becky Asch said reflects the institution’s annual fees to attend CGI meetings. Another Grameen arm chaired by Yunus, Grameen Research, has donated between $25,000 and $50,000.

As a U.S. senator from New York, Clinton, as well as then-Massachusetts Sen. John Kerry and two other senators in 2007 sponsored a bill to award a congressional gold medal to Yunus. He got one but not until 2010, a year after Obama awarded him a Presidential Medal of Freedom.

Yunus first met with Clinton in Washington in April 2009. That was followed six months later by an announcement by USAID, the State Department’s foreign aid arm, that it was partnering with the Grameen Foundation, a nonprofit charity run by Yunus, in a $162 million commitment to extend its microfinance concept abroad. USAID also began providing loans and grants to the Grameen Foundation, totaling $2.2 million over Clinton’s tenure.

By September 2009, Yunus began complaining to Clinton’s top aides about what he perceived as poor treatment by Bangladesh’s government. His bank was accused of financial mismanagement of Norwegian government aid money — a charge that Norway later dismissed as baseless. But Yunus told Melanne Verveer, a long-time Clinton aide who was an ambassador-at-large for global women’s issues, that Bangladesh officials refused to meet with him and asked the State Department for help in pressing his case.

“Please see if the issues of Grameen Bank can be raised in a friendly way,” he asked Verveer. Yunus sent “regards to H” and cited an upcoming Clinton Global Initiative event he planned to attend.

Clinton ordered an aide: “Give to EAP rep,” referring the problem to the agency’s top east Asia expert.

Yunus continued writing to Verveer as pressure mounted on his bank. In December 2010, responding to a news report that Bangladesh’s prime minister was urging an investigation of Grameen Bank, Clinton told Verveer that she wanted to discuss the matter with her East Asia expert “ASAP.”

Clinton called Yunus in March 2011 after the Bangladesh government opened an inquiry into his oversight of Grameen Bank. Yunus had told Verveer by email that “the situation does not allow me to leave the country.” By mid-May, the Bangladesh government had forced Yunus to step down from the bank’s board. Yunus sent Clinton a copy of his resignation letter. In a separate note to Verveer, Clinton wrote: “Sad indeed.”

Clinton met with Yunus a second time in Washington in August 2011 and again in the Bangladesh capital of Dhaka in May 2012. Clinton’s arrival in Bangladesh came after Bangladesh authorities moved to seize control of Grameen Bank’s effort to find new leaders. Speaking to a town hall audience, Clinton warned the Bangladesh government that “we do not want to see any action taken that would in any way undermine or interfere in the operations of the Grameen Bank.”

Hillary went to Bangladesh and dropped some strong-armed rhetoric at a town hall in their country.  It cost Yunus and his people about $300,000 to have the Secretary of State from USA endorse their bank.

There are more case studies in the full Associated Press report showing a similar link between donations to the Clinton foundation and preferential treatment by the state.  They call into question the ethics of Democratic presidential candidate Hillary Clinton and the potential for corruption if she is elected.

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Koch Brothers Target Clinton in New Ad

hill-coal

The donor network run by billionaire brothers Charles and David Koch plans to run an anti-Hillary advertisement for the first time this election.

The commercial will run down in Appalachia, coal miner country, and specifically target Ted Strickland who is running for Ohio’s Democratic Senate.

The production is titled simply Josh, which is presumably the Appalachian man featured in the video who just wants to punch in and mine coal.  The Koch brothers want to afford Josh that opportunity.

This is Josh:

joshmaybe

Why the fuck is Ted Strickland trying to jam Josh up with anti-coal rhetoric?

The ad keeps its distance from the presidential election, focusing mainly on Mr. Strickland, but it features color filtering that makes Hillary look ghoulish–editor’s room magic that lets you know who the bad guy is.

Koch network plans to spend about a million, a rat nostril’s worth of their money, to run this piece in targeted regions of Ohio.  Most likely places where good Appalachian folks like Josh live.

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NASDAQ Presses To Higher Prices Overnight

Traders call out trades on the floor of the Chicago Mercantile Exchange, April 25, 2007, after the Dow Jones industrial average cracked the 13,000 mark for the first time. The Dow leapt to an intraday record of 13,036.99 within minutes of the market's open, with investors also buoyed by data that showed orders for durable goods -- costly and long-lasting manufactured items -- rose more than expected in March.  REUTERS/John Gress (UNITED STATES) - RTR1P16Q

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range and volume on a grind higher that pushed price up into the 8/15 range, the day we put in our last swing higher.

The only scheduled economic event today comes at 9:45am when we hear the Manufacturing PMI reading.

Yesterday we printed a normal day.  The first hour of trade featured a strong impulsive buy and formed a wide initial balance.  The move was almost entirely erased before lunch when responsive sellers of a similar magnitude stepped in.  Ultimately the price started to coil as neither buyers nor sellers became initiative.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 4812.50.  Look for responsive buyers here who push price back up through overnight high 4829.75 and target 4834 before two way trade ensues.

Hypo 2 sellers work gap fill down to 4812.50 then continue pushing down through overnight low 4807.75, them we chop around at the huge MCVPOC at 4806 for the rest of the day.

Hypo 3 strong buyers push up through overnight high 4829.75 then probe above swing high 4835.25.  Look for sellers up at 4839 and two way trade to ensue.

Hypo 4 strong sellers push all the way down to 4796.50  before two way trade ensues.

Levels:

08232016_BiasBook

Volume profiles, gaps, and measured moves:

08232016_NQ_VPgapsMeasuredMoves

 

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Surprise! FBI Finds 15,000 New Clinton Emails

hill-surp

To be fair, the FBI only found 14,900 new emails on Hillary’s secret server, the one in her basement that the FBI now controls.

Still, it is a ton of documents, and even working at a full government pace, the State Department expects it will take months to process and release all the information.

“We’re talking about tens of thousands of documents,” Lisa A. Olson, a Justice Department lawyer representing the State Department, said.

This means U.S.A. voter may not have the privilege of reviewing the documents with enough time to digest them ahead of elections.

There are high profile documents involved in this investigation, unlike #DNCLeak, which was mostly gossip and guff being passed from one DNC member to another.

Therefore a Wikileaks style data-dump is out of the question, where the public is ‘crowd-sourced’ to comb the information and turn up results in 24-48 hours, a popular practice from hackers and activists.  Liberators of sensitive information have been the target of suspicious activity lately, including a potential assassination attempt against WikiLeaks founder Julian Assange on Sunday, August 21st.

The curious fate of Seth Rich, the person who may have provided the #DNCLeak raises flags about the safety of people involved in the releasing of private emails to public eyes.

We knew Hillary had a private server in her basement and we knew she was forwarding and sending out emails sensitive to our national security because a judged ordered the Obama administration to release them back in July.

This is new batch of 14,900 emails and may contain information that could derail the Democratic presidential candidate’s campaign for the White House.

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All Kinds of Balance: Big Ole’ Fat Balance

bubb-raining-balance

The NASDAQ was pushing a bit more aggressive today, both ways, in a manner of trade that resembles a slug fest between higher time frame buyers and sellers.

Either can claim victory on the session.  In the case of a draw and until further notice, the ‘W’ goes to the bulls.

However, the tape is showing the day-types the tend to occur at-or-near inflection points, peaks and troughs, the intermediate highs and lows.

Let’s run through the recent string of odd-ball occurrences, shall we?

  1. Monday, 8/8/2016 – the oddly named ‘Normal Day’ which happens about 6% of the time over the past 5 years (personal study).
  2. Thursday, 8/11 – another Normal Day
  3. Tuesday, 8/16 – Normal day
  4. Wednesday, 8/17 – Neutral Day (about 20% odds, or 1-in-5)
  5. Thursday, 8/18 – Neutral Day
  6. Today, Monday 8/22 – Normal Day

We have seen more normal days in the 11 trading days then we have all year.  Together they blob up to form this big ole’ fat drip-shaped balance:

balance-8-22

Funny how nature enjoys certain shapes and structures isn’t it?  Our good Italian friend Leonardo Fibonacci liked to write mathematical models of pine cones.  These days we build balance and trade the levels it produces.

The tear drop shape is a bit more clear when you view all trading activity through the lens old school, TPO market profile:

balance-8-22-mp

Writer’s note: Perhaps it looks more like an icicle, especially when you tilt your head to the left, but I’m really trying to make the Forrest Gump Headline/Photo combo work.

Markets in balance tend to stay in balance until acted upon by a force greater than the gravitational pull of the collected balance.

Writer’s note(2): I just made that up, but it has a nice ring to it, doesn’t it?

The higher time frame seemed active today, but neither participant showed any initiative.  Fade rips and dips back to the mean looks like the move until Jackson Hole.

The NASDAQ is liquid at these levels and has formed a fat balance.  Trade accordingly.

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Oracle Funds ‘Google Transparency Project’ After Losing $9 Billion Dollar Patent Case

LONDON, ENGLAND - JULY 06:  Larry Ellison and Nikita Kahn sit in the Royal Box on Centre Court before the Gentlemen's Singles Final match between Roger Federer of Switzerland and Novak Djokovic of Serbia on day thirteen of the Wimbledon Lawn Tennis Championships at the All England Lawn Tennis and Croquet Club on July 6, 2014 in London, England.  (Photo by Matthew Stockman/Getty Images)

In the modern world, no major company escapes paying money to Oracle.

They own all the patents that make computer and internet stuff work.  So when a jury of San Franciscan LSD lovers decided in May that Google’s Android operating system did not have to pay $9 billion dollars (extra Doctor Evil) for infringing on Oracle’s 37 Java API patents, Larry Ellison likely helicoptered off his yacht, boarded one of his military jets, and put his sights on Google.

Actually it was Ken Glueck, Senior Vice President of Oracle who claimed they were funding an anti-Google group operating in Washington D.C. called the ‘Google Transparency Project’ (GTP), following an August 18th Fortune article.

Breitbart produced the following list, detailing some of the reports already published by the GTP:

  • Google’s White House Meetings,” which documents 427 White House visits for Google during the Obama Administration; 2) 363 meetings between White House officials and Google employees; and 3) 64 meetings involving employees of companies solely owned by Google’s executive chairman, Eric Schmidt. It also notes that 169 Google executives have officially met with 182 different White House officials.
  • New data reveal extent of traffic between Google and the Obama Administration,” which identifies 258 instances of “revolving door” activity (involving 251 individuals) between Google, or related firms, and the federal government, Democrat political campaigns and Congress during the Obama administration. In a potential new scandal for Hillary Clinton, there were 18 former State Department officials that joined Google as executives, and five Google officials took up senior posts at the State Department.
  • Google Pulled White House Strings to Kill Telecom Treaty,” which alleges that Google executives and nonprofits they funded were assisted by the White House and Secretary of State Hillary Clinton to dominate a US delegation that derailed the 2012 Dubai World Conference on International Telecommunications, known as WCIT-12.

Oracle thinks Google is in cahoots with President Obama and they want to expose the inner-workings of the tech-giant’s Washington D.C. practice of influencing politicians, particularly democrats, to make conditions more ideal for the internet’s biggest search giant.

A company like Google will always push for globalism because their service is designed to span the world.  What they fail to realize is just how detrimental their campaign will eventually be for their own country, The Peoples Republic of California, a land scorched by fires and drought.

Oracle wants more color on the tens of millions in Google lobbying expenditures.

A bit more transparency never hurt anyone, right?

seth-rich

 

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Balance Play To Start The Trading Week

balance-meogee

NASDAQ futures are coming into Monday gap down after an overnight session featuring normal range and volume.  Price drifted lower until about 3am when a strong bid pushed the market up through Friday’s high briefly.  The auction then failed and reversed the entire move.

On the economic docket today we have a 3- and 6-month T-bill auction at 11:30am.

Last week we tested higher, then lower, but ultimately marked time on the NASDAQ.  Here are the returns of each major index last week:

08212016_IndexPerf

On Friday the NASDAQ printed a normal variation up.  The impulsive move higher late Friday morning was reversed then price worked higher to end the choppy session.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 4807.  Look for sellers ahead of 4810 who work price down through the overnight low 4792.75.  Buyers step in around 4785 and 2-way trade ensues.

Hypo 2 sellers make a push off the open, take out overnight low 4792.75 and work lower, down to 4780.25 before two way trade ensues.

Hypo 3 strong buyers close gap up to 4807 then take out overnight high 4817.25 and continue up to close the 4822.75 gap before two way trade ensues.

Levels:

082232016_NQ_MP

Volume profiles, gaps, and measured moves:

08222016_NQ_VPgapsMeasuredMoves

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iBankCoin Laboratories Out With Another Call

pen-dread-lab

Greetings from the inside the machine!

I have spent the better part of Sunday calibrating the cogs and greasing the wheels inside the Exodus Strategy Session index model to ensure it deploys an accurate message.

After the scores were tallied and married to the learning algorithms of Exodus, the results are in:

Next week we drift, like a slow summer wind.

I know many of your were ‘treated’ to tree-bending winds, torrential rains, and biblical skies that made you seriously consider boarding the ark, but the robots are like, “not just yet, Mr. Robinson.”

The gritty details of how I expect this week to pan out are written in the Exodus Strategy Session, a weekly report published inside Exodus every Sunday about this time. You executive types, with your cocaine addictions and bastard children, may enjoy a quick read of the summary which takes every bit of data and coagulates it into two-to-three succinct sentences.

You are a busy person, and your pal Raul is going to take care of you.

In summary, lab results are in, and they are calling for more balance and drift on the top-side of the marketplace.  Trade accordingly.

Distinguished members of Exodus, it is with humility and a child-like desire to learn that I present the 93rd Edition of Exodus Strategy Session.  It is live now, go check it out!

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