The Normal Show

This is day two of market profile “normal” day types. In trader language, that means “Why are you even here?” It also means, “I hope you were fading the extremes.”

Because there is little else a feller can do to scoop a few nuts from the barrel in these conditions. I talked through a setup I’ve been working inside 12631. It had me engaging the futures right up to the closing minutes. There were simply too many sell orders for my stats to play out.

That’s why they’re 94.3% and not 100% you dig?

Nothing in this game called life is guaranteed. If it were we would all be hanging out on street corners shooting dice. No, instead we must labor away industriously, adding value to society, mankind, and nature in a constant state of interconnectedness.

Per the norm, I highlighted one of my positions and it was knocked to lows. Therefore, I am going back into my cave to recite scripture to dogs and cats.

Get your blessed ass to church you heartless internet robots.

One of my largest holdings has been quietly making fresh 52-week highs the past several days and looking at the float, this crowded short is about to make aggressive pelvic thrusts to the upside.

SUNE has completely disregarded the shenanigans in oil. Oil is SUNE’s distant cousin who still lives in decrepit villages without toilet paper or electricity. What once appeared to be a meaningful relationship is now a relic of another era.

You may be thinking to yourself, “Well I can’t chase it up here.” And you’re right, you can’t. But you can enjoy the fireworks when others are forced to chase by insistent margin clerks.

The best part about the solar trade is what Exodus is telling me—little whisperings that the move has room to run.

So it shall.

Nasdaq futures managed to print an abnormal range but volume has returned to normal as we head into Thursday. The session traded inside of yesterday’s range and found responsive buying down near the VPOC of the session (4290.50). The session was balanced.

Yesterday we printed the elusive normal day—a day where the first hour’s range is never exceeded for the remainder of the session. These day types suggest an other time frame was aggressive at the open but never became initiative intraday and 2-way trade ensued. It could be early signs of a pause ahead of tomorrow morning’s NonFarm Payroll change.

Overall, the short term is seller dominant, and the last 2-3 weeks are neutral. We are trading along the peaks of prior resistance and buyers have three times defended their progress. The more tests lower we have, the weaker their ranks become.

My primary hypothesis on the session is for buyers to sustain trade above 4300 and make a push to take out overnight high 4319.75. Look for responsive sellers around 4326 otherwise continue higher to 4338.50.

Hypo 2 is sellers push down through 4300 and push down to 4285 where responsive buying comes in and 2-way trade ensures.

Hypo 3 is a strong selling take out 4285 and test below yesterday’s session low 4275.75 to target 4255.

Levels:

Auto mechanics are positioned well to prank people on April Fools’ Day. I learned this today. It was easy to quote me a disturbing price for parts and labor. I haven’t the slightest clue what the going rate is for their greasy work.

What isn’t fooling me is this Wednesday selling. I cannot say I am positive, but I can say with certainty nothing has occurred to make me deviate from my call that the Russell is making a major breakout here.

If bulls lose their Russell foothold, then I will discuss if I am in fact, the fool, via Periscope, with the explicit intent of buoying Twitter’s share price.

I am staying out of the way today as higher time frame participants rip through the financial complex. Here we are, the second quarter is up and running and volatile. We’re yet to see anything redeeming from the bull camp who came into the day with the disadvantage of short term control being sell side.

Fueling the dislocation of bulls is transports. Airlines were downgraded today sending my SAVE position careening toward earth. I am not fully satisfied however and will remain positioned until my hand is forced.

Oil is making a barbaric move to the upside on the news we are again (and always) at war for the sacred goop. Twtter caught an upgrade off of Periscope yet is in purgatory until the overall market can shape up.

The session low looks okay, but it is still much closer then session high. Bulls have to ‘climb the flagpole’ to claim victory on the day. Range extension is still up for grabs but we may end up printing a normal day.

Until more color emerges, sellers are winning and it’s best to stay out of their way. As for oil, you’re either already in it, or an observer IMO.

Nasdaq futures went on a ride overnight where both the volume and rang exceeded second sigma.  During the hour and a half ahead of closing bell price started selling fast and on volume. The abnormal globex session continued to see selling, fast at times, which pushed below the prior (3/13) swing low before finding buyers.

Once it found buyers the auction reversed, and particularly after midnight price began moving upward with speed. The action nearly went round-trip as we head into cash open. And this morning like likely to be a busy one.

At 8:15 the ADP Employment Change data was weaker than expected. This news was met with a buying reaction. Also on the agenda today is Markit Manufacturing PMI at 9:45am, ISM Manufacturing at 10am, Fed’s Lockhart talking monetary policy at 10:30am, and oil/gas inventories out at 10:30am as well.

Turning to the market profile chart, the carnage of last night’s session revealed a territory where buyers are being aggressive. Just below 4285 buyers have demonstrated aggressive control. Should that price level trade again today, I would expect a similar response, otherwise I would deduce a material shift in context has taken place.

Price is currently pinned within a well-defined value area dating back to 3/26. Essentially, how we break from the 4324 – 4305 range will determine direction in the short term.

Heading into today, my primary expectation is for buyers to attempt to push back into Tuesday’s range (4320.75) and claw back into the value area up at 4350. However I anticipate responsive sellers will defend this region.

Hypo 2 is seller push off the open to 4305 where responsive buyers step in and we stick in the 4324 – 4305 range.

Hypo 3 is sellers blow through 4305 to set up a test of the responsive buying zone below 4285. If buyers do not defend we could see a fast flush.

Hypo 4 is buyers reclaim 4350 and continue pressing higher to target 4362.

Levels are highlighted below:

For the quarter soaked in gasoline to end without combustion would have been a disappointment. It would be like a firework show without a finale. This is America, dammit, we like grande completions.

Since I returned from Jackson Hole, my main focus has been to trade less. It took me an entire quarter of random churn to realize my edge only exits a few finite moments a year. Digging a bit deeper, and using tactical entries and exits, I have 3, maybe 5 times tops intraday where I have an edge.

The rest is all work for the sake of work, random back and forth that my broker must L-O-V-E.

Today I had a strong trade coming out of lunch. I caught nearly the entire rotation up and by 1:45 I turned my attention to industry. Part of me knew this afternoon was destined to be hairy. It would have served no purpose to wring my hat and stress about the closing behavior because I had zero intention of altering my book.

I am long lads, the longest I have been all year. My positions are concentrated like the tanks of a blitzkrieg. Starting tomorrow, said spear will aim to penetrate the belly of the bear and separate its ranks, causing their camp confusion and chaos.

Like any blitzkrieg attack, its effectiveness is entirely dependent upon striking fear in the heart of the opposition.

I am like a wolf clad in skinned sheep and you are a merely baby cub. Cometh with great fury, all yee market inflows. Q2 starts at the stroke of midnight. Watch your futes.

Nasdaq futures are set to gap down into Tuesday after printing a slightly abnormal globex range. Heading into month end we have relatively light economic calendar. At 9:45 Chicago Purchasing Manager data is out and at 10am Consumer Confidence. Tomorrow premarket we have the ADP Employment change which some may consider relevant for gleaning insight into this Friday’s Non-Farm Payroll data.

Price managed to work just below Monday’s low before finding buyers overnight. Yesterday we printed a normal variation day after opening gap up. The last 2-3 weeks have been a neutral, fast, range and we are trading in the lower quadrant of last Wednesday’s trend day down.

Early on my primary expectation is for buyers to attempt to push into the overnight inventory and test up to 4365. From here I will look for sellers to come in and work down below overnight low 4347.25. If buyers do not defend at 4338.75 then look for a weekend gap fill down to 4327 otherwise look for trade to balance out around 4350.

Hypo 2 is buyers push up through 4365 and work an overnight gap fill up to 4374.25. Then I will look for them to continue pushing higher above Monday’s high 4381.75 to target a move up to 4397.25.

Hypo 3 is a gap fill up to 4374.25 then sellers push back down to test Monday’s low 4349.50 before we balance out.

Levels in play are highlighted below:

Nasdaq futures are set to gap up this Monday after trading an abnormal 50 point range during globex. Around 8pm buyers started working, and just before 11pm a large stop-run style push worked through. The move held though some 2-way action and ahead of the European markets opening it went on a secondary rally before finding sellers right as Euro markets opened.

Price is set to open inside the afternoon value zone formed last Wednesday during the trend lower. On both sides of this distribution the action can accelerate. Thus today carries an elevated risk:reward.

At 8:30am we had Personal Spending/Consumption data and saw a muted reaction. At 10am Pending Home Sales are out, and keep in mind we have German Unemployment stats out tonight.

Heading into today, my primary expectation is for sellers to work into this overnight inventory. Look for a struggle at 4338.75 but sellers manage to take out that area and work to 4323.

Hypo 2 is buyers sustain trade above 4338 and continue working higher. If they can take out overnight high 4367.50 then look for a push up through 4381 to run up the thin area to 4397.

Hypo 3 is we stick in a range between 4360 and 4340 (unlikely).

Levels:

This week is set to be a wild one. Q1 is coming to an end and the economic calendar is jammed with events including the big dog, Non-Farm Payrolls on Friday morning.

It has been a gnarly quarter requiring tactical positioning and lowered expectations. It will be interesting to see whether we ease into Q2, or if instead it comes in like a lion.

Weekly Strategy Session subs, the latest report should be hitting your inbox shortly. There’s some new content in there courtesy of Exodus. I hope you enjoy it. If you have any questions about the Exodus data presented, shoot me an email [email protected].