Crime Scene Cleared

Heading into today, the primary objective was checking back to the price level where participants originally reacted to the Russian plane crash news.  This is one of the fundamentals of futures trading; expect the market to revisit news driven moves.

The NASDAQ lacked market profile structural support where it bounced.  Instead it was buyers asserting themselves and defending the trend day (or conviction day as OA calls it).  The FANG dominated NASDAQ was also divergent from the other indices, and when it bounced it ran hard.

After that happened, the next logical task was going back to 4670.

We are in a neutral print now.  The question is will it end with a standard neutral close near the mid, or will we close neutral EXTREME?

Either way, keep an eye on which areas of the market hold strong.  So far its been small caps.

NASDAQ futures are priced to gap down heading into Tuesday after news the Turks shot down a Russian jet during air combat.  The initial reaction to this news occurred around 3:30am eastern time.  Range on the globex session is elevated as is volume.  Price managed to push down into the slippery single prints left behind last Wednesday before finding buyers.  At 8:30am GDP data came out in-line with expectations while Personal Consumption was a bit lower.

Also on the economic docket today we have the Case-Shiller composite-20 at 9am and more importantly Consumer Confidence at 10am.

Yesterday we printed an efficient normal variation down day.  It was effiecient because it managed to close two open gaps.  First it traded higher to close the 4702.50 gap from 11/6 then it formed excess high and pushed down to close the gap left behind last Thursday at 4659.75.  The session ended with price trading below the mid.

Heading into today my primary expectation is for buyers to push into the overnight inventory and ‘check back’ to 4670, where the reaction to the jet fight happened.  Look for responsive sellers (responsive relative to the open, initiative relative to yesterday close) ahead of the 4676 gap who push to take out overnight low 4634.25.  Look for responsive buyers just below here and two way trade ensues.

Hypo 2 gap-and-go down.  Take out overnight low 4634 early on and sustain trade below it to set up a liquidation down to 4607.

Hypo 3 buyers press the full gap fill up to 4676 then set their sights on overnight high 4684.50 before two way trade ensues.

Hypo 4 sellers take out overnight low 4634.25 early but stall and buyers step in to work back up to scene of crime 4670.

Levels:

Volume metrics told the story this morning.  Volume during the first 15 minutes of trade was less than half the 20-day median on the NASDAQ.  The market was in the hands of hungover novices and they were easily overrun by a supply glut.

This is still a holiday shortened week however, and I see no reason to high tail it to cash.  It looks like a real liquidation will not trigger unless price sustains south of 4646, see below:

Anyhow bias is short but I am not pressing.

We quite possibly just saw the high of the session, but I am busy today.  I only had a small window of time to trade and fortunately we pressed into one of my morning levels while I was in attendance.

Nothing fancy here, just took about 7 handles out of the NASDAQ barter and exchange off a homework level:

My standards are high and my expectations are low.  That is this week’s theme.

NASDAQ futures are coming into the week flat after a globex session featuring normal range and volume.  The action was balanced overall while price managed to exceed the high print from last Friday.  Today is a market holiday in Japan–their Thanksgiving.

On the economic calendar today we have Markit Manufacturing PMI at 9:45am and Exiting Home Sales at 10am.

The market trended higher last week and featured two trend days, Monday and Wednesday.  Last Friday we printed a rare normal day which featured no range extension.  The session did manage to print a weak, double initial balance low at 4673.50.

Heading into today my primary expectation is for sellers to work down through overnight low 4675.75 and test down through the weak low at 4673.50.  Look for responsive buyers at 4667 and two way trade to ensue.

Hypo 2 buyers push up and take out overnight high 4697.50 and work to take out close the open gap up at 4702.50.  Look for responsive sellers up at 4703 and two way trade to ensue.

Hypo 3 sellers push down through 4665 and target 4663.  Trade sustains below 4670 setting up a secondary leg down to 4653.75 before two way trade ensues.

Hypo 4 buyers close the gap up to 4702.50, sustain trade above 4702, setting up a potential run to test above the 11/5 session high 4726.50.

Levels:

How are you preparing for the holiday shortened week?  I wrapped up another Exodus Strategy Session analysis and the results are in–index charts look bullish and my model carries a short bias.

This will be an odd week.  The week after option expiration has been rocky recently, but going out and trying to short a holiday market sounds like a futile way to resist a slow market.

Defying the turkey gods is not on my to-do list this week.  I will scalp short off conviction levels but not press.  I will do the same for longs.

Tis the season for impulsive eating and deep bottles of Cabernet–but I will be exercising temperance with my trade expectations.

With signals crossing again, I am only looking to scalp.

I probably worked through 350 tinder cards this afternoon whist watching the paint dry on this rally.  It was a strong week.  I was forced to pivot midweek like I have been doing for many weeks.  I come into Monday with a short bias, it gets plowed, then I stop resisting the current and hop into the stream.

I passed on almost everything today.  There is always next week.  The thing is, with this noticable character shift in the marketplace, we may see radical strength next week.  The week after OPEX has been feeding grounds for bears in the recent past–this might not be the case this go around.

Ever since closing bell there has been buying pressure on the NASDAQ.  The settlement period has freed price to continue exploring after a pretty serious pin session took hold.

On the hot IPO front, it looks like Match.com traded better than Square out the gates.  I cannot lie; Tinder is pretty, pretty, good.

We are not talking about Toyota here people.  Tesla is on the frontier of technology.  Little setbacks like a faulty seat belt will not destroy this stock.  Now if we had a recall associated with their battery then look out.

Any weakness associated with this news is a gift for anyone waiting to take entry into the greatest technology company in the world.  This will blow over faster than Don Trumps bangs without hairspray.

Aside: I am getting super bullish on General Motors…

Full Disclosure: Long TSLA shares with no intent of selling, ever.

Price is set to gap up for the fourth consecutive day on the NASDAQ after an overnight session featuring normal range and volume.  Price managed to traverse but hold the Thursday range during globex.

The economic calendar is quiet today.  The only item scheduled is the low impact Baker Hughes Rig Count at 1pm.

Yesterday we printed a normal variation up day.  Price held the upper quadrant of the Wednesday trend day up before extending up just beyond the 11/11 high before two way trade ensued.  Price closed at the mid.

Heading into today my primary expectation is for sellers to push into the overnight inventory and close the gap down to 4659.75.  From there look for a move to take out overnight low 4652.25.  Look for responsive buyers around 4646 and two way trade to ensue.

Hypo 2 buyers press of the open, take out overnight high 4674.75 and press higher to close the open gap up at 4702.50 before responsive selling comes in.

Hypo 3 buyers press up through overnight high 4674.75 but find responsive sellers around 4684 and two way trade ensues with a gap fill down to 4659.75.

Levels:

Pharmaceutical giant Merck announced plans to expand their exposure to Africa this morning.  According to their kingpin CEO Karl-Ludwig Kley, their aim is to double drug sales in Africa by 2020. Read the full PR announcement here.

They want to be welcomed by the communities of Africa.  Therefore they also pledged to eliminate schistosomiasis, a parasite that kills around 200,000 people every year.

Overall I see this as a big positive for the company.  Africa is a majorly untapped market, and drugs are an easy sell.  Bullish.