Fair Markets

Nasdaq is set to open pro gap as we head into Thursday. The overnight session features 44 point of range so far, nearly 2^nd sigma which is 46.75 points. That tells us the session was quite abnormal, and on the borderline of being different than 95% of all overnight sessions over the last three years.

Volume behind the move is light, in typically upward fashion, currently within the threshold of normal.

We heard the initial/continuing jobless claims at 8:30am and so relatively little reaction to the data point. The only other economic event scheduled for today is the EIA Natural Gas Storage data at 10:30am.

The Nasdaq is auctioning in a methodical manner. Tuesday’s big gap lower was faded. We found responsive buyers Tuesday and spent the rest of the session trading higher. Yesterday we opened gap up and spent the entire session slowly working the gap fill lower. Today’s gap up is on the professional variety but still at risk of being filled. Conversely, there I an open gap up at 4476.25 which may entice the market upward. Overall the market has been an objective mechanism of price discovery all week.

Heading into today, my primary expectation is for sellers to push into the overnight inventory. There’s a big HVN at 4450 that might behave like a magnet once markets open. I will look for buyers to defend north of 4440 to set up a move to fill the gap up to 4476.25.

Hypo 2 is gap and go higher, push up to 4476.25 and find sellers who defend the 05/04 range.

Hypo 3 sellers push down though 4440 and sustain, setting up a fill of the overnight gap to 4424.25.

Hypo 4 bulls sustain trade above 4476.25 to target the NVPOC at 4489. Stretch target is 4493.

Levels:

They are boiling the frogs ever so gently this week, 2 degrees per minute, you can set you watch to it. It seems less a market of sellers and more a market without buyers, but doing a fair job advertising lower prices.

Just some tinder here, one tally whacker who breaks the code of silence to turn on risk and the whole market will turn into a firework display. I patiently wait for my judgment, be it tossed into a bottomless pit or cased beer and fireworks.

Nasdaq futures are up a touch as we head into cash open. The index spent most of the evening trading up following yesterday’s strong reactive buying. Range overnight managed to press 2^nd sigma while volume stayed compressed into its normal range.

On the economic calendar we saw Advance Retail Sales at 8:30am which solicited a choppy but ultimately sideway reaction. We also have Business Inventories at 10am and Crude/Distillate Inventories at 10:30am.

Going back to the charts, yesterday we opened pro gap down and drove lower from the opening bell. The range was enough to expand volatility for a third week. It also managed to fill last Thursday’s pre NFP gap. The auction ultimately stalled out and found responsive buyers. We then worked higher to close the overnight gap up to 4431. A few attempts were made to reenter Monday’s range but ultimately we traded lower into the bell as the market was tasked with absorbing a heavy amount of supply in the final hour and a half of trade.

Heading into today, we are priced to open on the high-end of yesterday’s range. My primary expectation is for seller to push into the overnight inventory and trade down to 4420.50 to close the overnight gap. This market has demonstrated a strong proclivity to close gaps lately so it might as well continue doing so. From there sellers may continue pushing to 4416 where I will look for signs of buyers and then two way trade ensues.

Hypo 2 buyers push off the open to take out overnight high 4447.75 to target 4455.50 where sellers come in and two way trade ensues.

Hypo 3 buyers take out 4455.50-4457.75 and continue higher to target the open gap up at 4476.25.

Hypo 4 breakdown below 4416.25-4412 opening us up to trade down to 4395.50.

Levels:

Have I caught you just before a meeting? Ok listen to me anyway. Everything you see is a lie—parlor tricks created to fleece you of your hard earned dollars. You work hard, don’t you? Yes? Well let me do you a favor.

Throw away your books. They collect dust and crowd what should be a paperless modern lifestyle. Better yet, burn them. Make them into carbon like a palm oil farmer in the Serengeti. Books are only to be used as weights, for building big ass muscles, to attract a mate with comparable muscle mass, or MOAR.

Then start trading the Nasdaqs with your homie. Then, when the blood suckers go after your book of stocks, you can scrape back their take.

Terrorist sell robots came into the financial complex and gobbled up the NFP rally while good Americans were sleeping. America had to spend all damn day beating said robots back with a Louisville slugger, bear Jew style, only to yet again find more sellers back inside Monday’s range.

Meanwhile, another earthquake, tick-tock mates, hit. Soon a hole to the center of the earth will open and spewing from it will be perverts from Zillow who breathe on you and stroke your hair with their greasy hands.

In short, hells breaking loose so I should probably go lift heavy objects up and down until I swell as wide as a door jam.

Nasdaq futures are pro gap down this morning. The action took us to second sigma range and volume, and effectively erased the entire pop from Nonfarm payroll only two sessions back.

The profile was thin, single prints, and created the scene for a fast move. The fact it was traversed overnight may be a positive. This occurred while none of the underlying components were trading. Therefore, it will be the responsibility of the market to balance itself back in line with its components come open.

Perhaps contributing to the selling was Fed’s Williams who, for whatever reason, went on CNBC yesterday evening and said “Every FOMC meeting is on the table for a rate hike.”

Heading into today, the only economic event of note is the Monthly Budget Statement at 2pm.

Yesterday we printed a normal variation down day and closed on session low after briefly taking out Friday’s high in the morning. Heading into today my primary expectation is for buyers to push into this overnight inventory and trade up to 4408. From there I expect supply to come in and us to continue trading lower to work toward 4367.50.

Hypo 2 buyers blow up through 4408 and push us back up to 4433.

Hypo 3 sellers gap-and-go lower, take out 4367.50 early and target 4357.50. Levels:

Working the Nasdaqs only earned the milk today. Longs were denied access to honey. Instead today was a seller’s market.

The profile is mega balanced, but sellers are pushing into the thin prints below, and this may lead to a colorful overnight session. Prior to this softness they were paying out money for buying value area low. Check this lovely out:

When the market eventually gave way to selling it called last Friday morning’s rally into question. Bulls won’t want to see Nadaq spending too much time below 4437.

Momo was out and about today, springing up in several industry groups. When seeing big gains in the indie names, it’s hard to give credit to the market crash claims.

Stay skeptical.

I used this morning’s gift bounce in Zillow to initiate an earnings gamble on the name. Long May $90 puts.

Markets are otherwise in summer grind mode—awesome to see after two weeks of whipsaw Willy paying us a visit. It’s still early, don’t go complacent.

Nasdaq futures are trading quietly ahead of this week’s start. After two Monday’s of starting out with a big gap up and volume elevated, today is set to open near-flat on volume low-end normal.

The economic calendar is quiet today. At 10am we’ll hear the latest read of the Labor Market Conditions Index. This is a low/medium impact number. Earning’s season is moving onto b-role companies and less likely to impact the overall market. The dominating headline risk remains with the eurozone and their Greek situation.

Friday price went pro gap up after Nonfarm payroll data received a positive reaction. We spent the rest of the session trading sideways with a slight upward bias. Since then, during globex, price managed to test below Friday’s low briefly before rotating 10 points higher.

Heading into today, my primary expectation is for 2-way auction to give way to more price discovery up. Buyers look to target a 05/04 gap fill up to 4476.25.

Hypo 2 is sellers take out overnight low setting up a test of the single prints down at 4437. If they can push down into them, look for a give-back of the NFP boost all the way down to 4403.25.

Hypo 3 is bracket trade between 4456 and 4445.

Levels:

I am inside Exodus right now doing a Q&A. You can find me by logging into the software and clicking the following link:

DO IT.

Happy Mother’s day to all the ladies out there. As you know, the Raul blog is all about the ladies of finance. Feel free to cavort about my small piece of the interweb, fighting one another with pillows.

Today marks the 100^th year of celebrating Mother’s day. Before then, today was just another reason to correct the mother of your children via spanking. You think I’m making this up? See below:

Times are better now, because of this holiday.

I put together my best ideas for the upcoming week and mailed them out to all the Weekly Strategy Session subs. Now I must cut some fresh flowers from the yard to decorate the home and prepare skewers of meat for the hungry women soon to be infiltrating my home.

Feed your mothers (all of them) today lads, if only for one day, god knows they spent enough years filling your pie hole.