Butterscotch Candies and REITS

The calendar presses onward, with each moon, and with it comes change, for your boy Raul in June.

Festivities like luncheons and local elections now fancy my attention. There’s a bingo hall down the road that’s calling my name too.

I’m old now, you see, and I intend to reflect my mature dogma via the stocked market. I started by selling all those new fandangle internet companies and today I started buying DOC. It’s a REIT, invested in the types of places I’ll soon live, homes of the nursing variety.

Now leave me alone, the Price Is Right is on the teevee.

Nasdaq futures saw an active session overnight with both range and volume coming in a bit ahead of normal. Price spent most of the evening pushing lower until finding buyers ahead of yesterday’s cash session low 4386.50. Since then, we’ve spent most of the early morning working higher.

At 8:30am, Housing Starts came in a bit worse than expected and Building Permits a bit better—thus the data was mixed. The initial reaction to the news is buy flow. Aside from those events, the US economic docket is empty for the day, and investors are likely focusing on tomorrow afternoon’s FOMC Rate Decision.

Yesterday the market opened pro gap down and saw an aggressive liquidation-type push lower early. The price action exceeded last week’s low 4390.25 before finding a sharp responsive bid. After a thorough churn at the 4400 century mark, intraday responsive buyers became initiative and we spent the rest of the session grinding higher. Buyers managed to trade up to the 06/09 open gap left behind last week Wednesday when we opened gap up and trended higher. This action exhibits the continued methodical manner by which our market is trading—very healthy overall.

Heading into today, my primary expectation is for buyer to work into the overnight inventory to close the overnight gap up to 4426.75. This sets up a push above overnight high 4428.75 and puts buyers well on their way to closing the weekly gap up to 4448.25. Look for sellers to defend last Friday’s range low 4440.50. Gauge short term control on whether buyers are able fully close the gap up to 4448.25 or if instead they fizzle out ahead of it.

Hypo 2 buyers push into overnight inventory but stall around 4421.50 and price rolls over. Sellers target overnight low 4395.75 setting up a test of Monday’s session low 4386.50. If buyers cannot defend then look for liquidation to take hold and push price down to 4360.50.

Hypo 3 sellers gap-and-go lower, take out overnight low 4395.7 5early and push to 4360.50 where we find responsive buying.

Hypo 4 churn takes hold, as investors wait for tomorrow’s FOMC decision, between 4433.50 and 4396.25.

Levels:

Reckon bulls think they shrugged this morning weakness off. Heck, we’re ‘off the lows’ as the fancy teevee man says.

Good, think like that.

There’s a change blowing in, from the south, and it brings with it sellers by the wagon-load.

I respectfully decline any propositions to procure stock, and instead offer to sell, with leverage, the whole market.

Suppose that’s all I need to do in this heat, and wait for the cards to fall.

Nasdaq futures are lower as we head into option/contract expiration week. The session opened gap down, a somewhat uncommon occurrence, and then spent the rest of the session trading in a normal 20 point range on somewhat normal volume. Volume analysis is a bit buggy right now as some volume is still trading on the June contract while most has rolled onward to the September contract.

The economic calendar has a few events today—at 9:15am Industrial/Manufacturing Production, at 10am the NAHB Housing Market Index, and at 4pm the Net Long-term/Total TIC Flows. However, attention will quickly shift to Wednesday afternoons Fed Rate Decision which is likely to be a high impact event regardless of the decision/verbiage. We are also still dealing with headline risk out of the Eurozone.

Last week we came into Monday gap down and proceeded to sell off for most of day and into Tuesday morning. By Tuesday afternoon, prices were off the lows and Wednesday featured a trend day up. After a brief continuation higher Thursday, equities rolled over and grinded lower into Friday’s closing bell.

Heading into today, my primary expectation is for sellers to push lower and work below 4405 to test the 4400 century mark. Look for sellers to target the NVPOC at 4405.50 then some churn at 4398 before continuing lower to test below last Tuesday’s low 4390.25.

Hypo 2, buyers push into the overnight inventory, take out overnight high 4437.25 to set up a gap fill trade to 4448.25. Look for responsive sellers to defend Friday’s range.

Hypo 3 churn, 2-way trade south of the overnight gap (4448.25) followed by liquidation in the afternoon.

Hypo 4 early push lower to NVPOC 4405.50 and sharp responsive buy up to close the gap at 4448.25 and continue higher.

Levels:

The super computers have been overclocked all weekend, spinning millions of scenarios into a complex web of game theory. The results are in—the proverbial excrement is en route to the fan.

Markets, all of them, are reaching critical mass as we head into quarter end. Our Leaders at The Fed are preparing to address the republic on Wednesday, and investors wait with bated breath to hear about how liftoff is near.

Exodus members, this week’s strategy session is complete. People of the interwebs, want to see inside Exodus? Let me give you a tour—I only have a few slots open so it’s first come first serve. Email me [email protected] if you’re interested.

Sticking around to trade futures on a Friday afternoon is an exercise in futility. The world is literally exploding with plant life, a pornography of plants desperately attempting to reproduce and populate the land, and you’re combating an ice cold sever rack that lives in the basement of the CME.

Does that sound like a proper expenditure of life force?

Now I love trading, I love it, but not as much as I love watching plants fornicate.

The markets ended the week trading poorly. Unless you’re a European investor, it’s likely you couldn’t care less about ‘the tape’ on a Friday. If you’re book has even a modest does of Chinese degeneracy then ride or die, you ended the week in the green.

I care about the tape, every day, so I have to safeguard myself from…myself. My finite willpower reservoir diminishes by Friday, and if I cannot busy myself elsewhere, whist sitting in the trading turret, it’s likely I’ll start blasting off shots. The robots, pleased by my engagement, converge on me and mangle my limbs with mechanical disregard.

I pass this tale onto you, as a caution of sorts, to enjoy life, especially on a Friday.  Compel yourself to swim in a pool or find a Greek to pick a fight with. If you must work, do it because it will enrich you.

Otherwise, your time is better spent wearing a sombrero sipping tequila, FTW.

Nasdaq futures are trading lower overnight on a range that extended a touch beyond first sigma and normal volume. It’s important to note, however, that we are in rollforward conditions here. Most participants switched from the June to the September contract yesterday, but a fair amount of volume is still occurring on the June contract.

The main feature of the overnight session is a big push lower, around 6:30am, perhaps associated with concerns over mounting doubt the EU will resolve the Greek situation. This recurring news item, as well as liquidity concerns in bonds, has us in an elevated headline risk environment.

On a bigger picture, the daily chart, if we go into the weekend under heavy selling, bulls have to respect the lower high print as it would signify we peaked out on the low-end of our well-established value range. Volatiliy did not compress as I envisioned last weekend.

The economic calendar features the primary reading of U of Michigan Confidence at 10am. This has generating intraday moves recently. We also have the Baker Hughes Rig Count at 1pm.

Heading into today, my primary expectation is for buyers to push into the overnight inventory and close the gap up to 4488 before two-way trade ensues from 4490 – 4460.

Hypo 2 gap and go lower, push down to 4442.50 before responsive buyers step in and begin working us higher to close the week near 4470.

Hypo 3 gap and go lower, liquidation takes hold, we press down through 4442.50 early setting up a move to close the gap down at 4431.

Levels:

I never understood the contempt for Dick Costolo. He always seems super friendly, which is surprising because he receives a quarterly tirade from my friend. It takes him like 6 tweets because of the asinine 140 character limit Twitter imposes. I find the character limit drives me to truncate my thoughts and separate the chaff. My friend on the other hand just tweet bombs like a madman.

Nevertheless Costolo is out and investors must now attempt to value the vessel and not the captain.

Never discount the value of an interaction. Each one carries an opportunity, which we as humans naturally attempt to evaluate.

What is the value of an interaction?

I’m afraid it’s a too big a question for me. Such a question demands a scientific process with the least amount of assumptions possible. Presented with the right data I am certain any one of you would choose the right answer.

Bear in mind, even the most formidable vessel will wander the seas aimlessly if driven without vision. It’s a shame Twitter can’t be more like iBankCoin, where investors unite the golden coin—stock market excellence.

The growing ranks of Exodus members have made profound strides in operating the new system and are empowering not only themselves but others with their insightful commentary. It’s quite the sight to behold.

If you haven’t taken a look inside the walls of Exodus, do it now. I’ll be your personal guide—just send me an email [email protected]. Better yet, HMU on Twitter @twosmuth, they need you to tweet more, dammit.

Nasdaq futures are up a touch as we head into US market open after a second globex session of normalized range and volume. The overnight session compressed in the upper quad of yesterday’s range before making a burst higher.

At 8:30am we heard Advance Retail Sales figures as well as Initial/Continuing Jobless claims. We also have natural gas storage data at 10:30am.

Yesterday we printed a trend day, for the most part, before settling out in the afternoon and forming balance/acceptance. The last three days have been an exercise in clearing up old open gaps. On Tuesday we went and closed the 5/13 gap and bounced. On Wednesday we continued lower before finding a sharp responsive buy. Then yesterday we pushed higher to close the 6/5 gap and the 6/4 gap.

Bulls will have to consider the fact we left an open gap behind yesterday morning down at 4431. If this market has consistently demonstrated anything this year, it has been a strong proclivity to go back and close gaps.

Nevertheless, this type of methodical trading suggests we’re in a healthy market with multiple time frames participating.

Heading into today my primary expectation is for sellers to push into the overnight inventory to close the overnight gap to 4488. Look for buyers to defend north of 4482 who continue pushing higher to take out overnight high 4500. Overhead targets are 4512.75 and 4515.50.

Hypo 2 buyers push early and take out overnight high 4500 and continue higher to explore the LVNs at 4515.50 & 4520.50. Look for responsive sellers at 4529.50.

Hypo 3 Churn inside the upper quad of yesterday’s range 4473.50 – 4500.

Levels:

The Greeks has reverted back to their dinner tables to smoke unfiltered cigarettes while eating cheese and olives. The sun has become too hot, frying brains beyond the ability to coordinate complicated financial arrangements with the Germans.

We revisit this after August, yes?

The market straight up flipped a switch overnight, didn’t it? Am I the only globex enthusiast in these parts? How isn’t a snapshot of the overnight session part of your daily prep work brah? WHY AM I ASKING SO MANY QUESTIONS?

You need to know what you should be doing today. I suppose that’s why you’ve com here, to this everlasting place of internet dominance. You shall do today what was to be done yesterday and the day before—buy Fed sanctioned dips.

There are dips all over the place. Find one and buy it. You can’t chase the good ones, the one’s you were supposed to buy yesterday. You have to climb a few rungs up the risk ladder.

Or, just maybe or, you can say to hell with all that deadly nightshade and dollar cost average into AWK, DOC, and NRG. That’s my old man book. If you don’t like it, don’t look.