SALE

The Nasdaq opened and was on sale all day today. The key was picking the right spots to place your shorts because the counter rotations were large throughout the entire liquidation. In fact, it’s possible you took longs all day in the Nasdaq and made money too because both sides were rotating big. However, the sellers were punching harder. Remember how we discussed the likelihood of OTF jockeying for position this morning?

Today’s market action had other timeframe written all over it.

I was only able to participate for a few hours in the morning because the sheer tenacity and intraday speed of the market was incredibly exhausting. I devote much of my time to diet, exercise, and mental training to extend my workable hours but that is a development we can discuss another day. Today I want to talk about the developing opportunity in the energy sector.

Stock picking, ferreting from one idea to the next with intense focus has its place. There is money to be made like this and I wholeheartedly embrace this fact because I have the numbers to prove it. But my vocation as a scalper is growing, and I am losing my ability to properly manage a large book of positions.

Enter the sector ETF XLE. It is an index of the biggest blood sucking cretins to inhabit our planet. These hole diggers, fire burners, and storage containers make up a big piece of our economy, a big peace that is being tossed into the trash as if it will never again be of use. The whole sector. Doesn’t that seem like a huge opportunity?

I have no doubt these prices will adorn your children’s $300 economics text books and they will wish they were around to buy. I intend to carve out a huge chunk of my trading capital, around 25%, and very lazily plop it into XLE and then go about my merry way dancing on the hand grenades of finance. I will garnish my energy steak with PDCE and SUNE hold all said positions either into another financial apocalypse or ride them to glory as my beard fills with grey hairs. Years, that is my timeframe. Then I’ll buy a big cowboy hat and move to Texas and watch American football.

Weekly Strategy Session subscribers, my most faithful minions, and the elite Pelican task force inside 12631 know exactly how I intend to make this trade.

I tend to put my mouth out there, lay money on the line, and then assess how good a job I did live. This is how we learn and grow in the communication world. Stop living under a rock, would you?

Bulls are starting the new year off on the cusp of a gap zone in the Nasdaq, and as we approach US trade the globex market is pushing into it. Trade volumes have come back to life and showing overall health in the facility of trade overnight which bodes well for intraday opportunity.

This is the first Monday of the year and month and could feature some aggressive jockeying for position. It is wise to closely assess the price action and trade in the direction of the hardest punches. The economic calendar is quiet today with most trades setting their sights on Wednesday’s afternoons FOMC minutes and Friday’s monthly Non-farm payroll data.

The primary feature of the last few weeks of trade was a strong swing higher across most equity markets as we headed into and through the holiday season. Sparking the move was the FOMC rate decision and Yellen press conference on December17th. We went gap up away from this area and grinded higher before rolling back over before prior swing highs. The Nasdaq was the only of the 4 major indices unable to take out prior swing high.  See below:

Whenever a move is news driven our expectation is for a return to “the scene of the crime” by the market. It will be interesting to see if we do that today, or if instead the buyers step in ahead of this price gap.

The last 3 days of trade were weak and unidirectional down suggesting sellers are controlling the short term auction and the market is trying to find buyers strong enough to start an upward auction. The overnight session took out Friday’s lows and as we approach US cash open it is trading along the low end of its range. Sellers printed the largest rotation of the session between 7&9am as the US came online, a 13.50 point rotation to take out the prior globex lows.

My primary hypothesis is for buyers to make a push into the overnight inventory early on and target 4208.75. If they do not find sellers here (initiative in nature relative to Friday and responsive relative to globex), then look for a gap fill up to 4214.50 then a test of overnight high 4220.75 and possibly a move up to 4225.75. I will be looking for signs of responsive sellers at each of these levels who will seek to push us down through overnight low 4197 to target MCLVN 4179, range gap to 4173, and potentially a full gap fill down to 4160.25

Hypo 2 is a opening drive down which takes out overnight low 4197 and targets MCLVN 4179. If no strong buyer response here then continue to range gap 4173 then gap fill 4160.25 and a blow through to test the CHVN at 4144.75.

Hypo 3 is a variation of hypo 1 where buyers gain acceptance inside Friday’s range and then make a big secondary push up through Friday VAH 4225.75.

If you have been around these parts a few years, then you know Zillow was one of my favorite stocks to go long. It was a momentum darling. The company is a social beacon of top-notch mobile phone capabilities. As a bonus kicker, their hands are in the real estate cookie jar, a jar being nursed back to health by record low interest rates.

I used it extensively while I hunted down my first home. I would sit in the third stall of my corporate bathroom and thumb through listings. If I found something my agent overlooked I would pace the hallways of my mouse maze accosting his oversight. Zillow was showing me more than the agent. So cool!

Today is different. Today Trulia is public too. Today Zillow is stuck at $100/share after being a dog for half of 2014. Today they have a looming lawsuit over their “frat house” culture and a delayed merger with, um, Truila.

Anyhow, it has a few catalysts and I present the short-selling case first from a longer-term then from a short term trade management chart. Like any idea, it could be wrong, and we want to have some risk in place for when it is.

That way, if it flips back to totally awesome frat dude with “bros and hoes” tattooed on its back then I can calmly walk up to their beer keg and fill my cup.

Other shorts of interest are MANU vs $16.15, AMZN vs. $313, BBBY vs swing high, GILD vs $97, and WFM back below $50 vs $52

Christmas is officially over. Yes, you had a foggy Friday to contend with and I understand if you cut the yard lights on without much thought this the weekend. However we must now get down to business.

The good news is you have, all of you have, a clean-slate to start the year. The bad news is most of you carried over last year’s baggage. If you did, choose right now to formulate a plan of action. Right.Now. Some of you are hungry for winship and glory, hungry to hit the proverbial ground running.

The money is out there. It’s about to come back online and slosh through the marketplace. If your leads are weak then why aren’t you reading the Weekly Strategy Session?

You might still have to take down the Christmas tree. You might still have pies and cookies filling your disheveled fridge, but at least you can take 20 minutes and fully prepare yourself for the trading week.

Then, on Tuesday, purge your home and stock your fridge with spinach and eggs.

Subs: the latest strategy session is out and ready to prepare you for the trading week. You know what we want.

PS – if you don’t know what we want, let me know. You can comment below, throw ham at my twitter handle, or email me.

On this most oddly timed first trading day of the year we are dealing with the natural effects of index selling, natural gas short squeezing, and market of stocks shenanigans.

It is a welcome respite to see a few stocks taking to the shorts despite the broad market weakness. To be quite honest, I much prefer a down dog Nasdaq with little momo pockets. That essentially means more ways to turn a trick in the tricky market.

If you have traded intraday then you know short selling pays quicker. My goal when leveraged to the neck is to minimize the duration of exposure as much as possible, thus, shorting is more conducive to this strategy.

Then I enlist the help of the world’s best stock finders to pick off a few momo bangers. Paradise.

I did not stop out my UGAZ at the end of the year. The position is small, a ¼ piece, due to the nature of the beast. Today put the position down only 12% compared to over 20% Wednesday. Now I am interested, to see if that was an escape hatch move today or the start of something more zesty, more 2015.

There was this list of people I don’t trust who all said to avoid telecoms in 2015. Naturally I started building in S, now, oddly enough, my largest position. I would like to reduce its size at my initial entry point, a bit higher, after doubling down in the trenches.

I have a play for GPRO and it is working. This is a fancy bit of stock god blessing on a bloody day. Other winners are VA, and TWTR.

On the losing end, I bet that BABA would go up this week which it most certainly did not. RIP BABA weekly calls.

BAC Jan calls are no longer in vogue and have flipped to red. This is a long duration trade and I now suspect I may be short a few weeks of exposure. The nature of short term options is feisty and bipolar.

There is much work to do this afternoon and over the weekend. Today you can right your ship. The profile is b-shaped and I suspect bears won’t have such a pleasant ride come Mutual.Fund.Monday.

Sleep on that dearie.

Nasdaq futures are inching higher as we head into the new year of trading. Volume has normalized in globex leading me to suspect the quality of trade may resume during RTH as well.

There are some economic data releases to be aware of – at 9:45 the Markit Mfg PMI and then at 10am Construction Spending and ISM Manufacturing. These early releases may lend some choppiness to the early trading action.

The futures managed to hold the Wednesday lows overnight and push up through the poorly auctioned zone from 4262.50 – 4252 (pink box on chart). The buyers are defending the globex midpoint at 4248 as we approach the open.

Sellers took control of the short term auction this week after a balance day on Monday. Tuesday went gap down and when buyers responded and attempted to push us back into Monday’s range we saw a sharp rejection lower. When Monday showed afternoon follow through it suggested the intraday sellers had converted from responsive to initiative.

Wednesday they defended a gap and range extension up. Again they defended Monday’s value and then pressed us lower for the rest of the session resulting in a neutral-extreme print. Wednesday’s profile structure carries strong directional conviction with it, thus the sizeable gap up this morning is suspect.

The slightly longer, intermediate term timeframe resembles neutral-to-slight bullishness. We have essentially traded flat for the last three weeks.

Early on I will be watching for buyers to make a push through the thin zone for a test of globex high 4262.50. I will be looking for responsive sellers in the zone from 4262.50 – 4271.25. From there I suspect we could slide back down through the thin zone to test 4254.25.

Hypo 2 is sellers pushing into the overnight inventory early with a drive which is likely to target globex low and then work toward Wednesday low 4228.00. This opens up the auction to test the low volume node down at 4216.50 and puts the December 17^th gap into play.

Hypo 3 we see buyers sustaining above 4271.25 and pushing a secondary leg up to 4285.25 thus regaining control of the short-term auction.

I have highlighted these levels on the following volume profile chart:

This was my first full year writing for iBankCoin. This accomplishment stands like a statue on Monument Boulevard, bringing glory to the family of Raul for 10,000 generations. Before assuming an officer position, I was navigating the seas on my own, via flowpirate.com. It floats on like a ghost ship to this day because I tend to buy time when it comes to business endeavors.

At the start the second quarter, I abandoned my post as a corporate accountant after a five year sentence. May the grey-cube lifestyle never again capture my soul, mates.

In Vegas I met the iBankCoin crew and loyalists for the first time. It was an epic experience. From private dining rooms at the finest restaurants to drinking Coronas at a slot machine with Pyromonoxide taking auction theory, it was one hell of a ride. Plus presenters who were intent on slashing years of my learning curve. It was a real-life taste of what this site is all about, coin banking with class and consistency.

I returned home to the unexpected news that former trading comrade ChessNwine had gone rogue and was now a for-hire mercenary. There was nearly a mutiny but everyone stepped up and turned tragedy into opportunity. This is the essence of business, politics, and modern society.

Trading has been mixed. I managed to turn some consistent ideas into system over in the Nasdaq electronic pits. Option trading has been a game of two steps forward, three steps back, but the math still makes sense. I will continue to engage the market in this manner with about 5% of my risk capital.

Real swing trading (multi-month) has produced some monster wins. The losers were contained and I live to fight for better profits next year.

I deal in marquee names, the darlings, and well, the darlings have been a pain in the ass unlike grandpa and his stinky trouser stocks which made a mint. But once you run a streak in hot stocks you will know what crack smoke tastes like. Then you will be hooked, like me, in search of your next egregious surge in variable income.

Finally, I was bestowed the honor of manning the Weekly Strategy Session. I took it back to its roots, a written report that serves as a reference map as we navigate each week. It has always been an essential tool in my trading. Now that I own it, it is even more valuable. I lay out a hypothesis, I see how the market behaves in relation to my analogue, and trade accordingly.

It reminds me of one of my favorite trading lesions—Say what you’re going to do, do it, and track how well you did it. Put another way—actions speak louder than words. Said even more directly—put your money where your mouth is.

In summary, it has been a lean year, a year of survival and perseverance, and it has put any survivors in a position to out maneuver the markets in the upcoming year. Ride with me.

http://youtu.be/-eSN8Cwit_s

The Nasdaq is hardly showing a pulse as we heading into trade this morning having traded only a paltry 6000 contracts so far. Range is low, prices are a bit higher and the primary feature of the session is an 11 point rotation up which was faded back to the mean of the session.

At 8:30am Initial and Continuing Jobless claims came out mixed and we saw little-to-no reaction from the market. At 9:45am we have Chicago purchasing manager index set for releases, this may lead to a choppy open, and then at 10am we have Pending home sales.

At 10:30am we have crude oil and gas inventory data followed by a noon read on natural gas inventories. The weekly energy announcements have been showing an elevated impact on not only the price of the commodities but also equities, thus, they are something to keep in mind as you navigate your trading day even if you primarily deal in stocks.

Turning to the charts, we can see the intermediate term coming into balance. This is seen as a series of overlapping value areas which I coagulate into a volume micro-composite (red-outlined, green value area profile on left).

Yesterday we opened gap down and when we tested higher sellers rejected us away from Monday’s range aggressively and targeted the gap fill down to 4281.50. If you recall this was yesterday’s hypo 2.

Sellers could also be seen actively defending the micro VPOC at 4295 which resulted in the second leg down. I emphasize this not to pay myself on the back but instead to show you the market has memory and this is not a random walk of price.

Toward the end of the session we saw some signs of excess low and then a sharp candle higher.

Today my primary expectation is for sellers (initiative in nature relative to the int term, and responsive relative to the overnight session) to push into the overnight inventory and close the gap down to 4283.50. Here I will look for signs of buyers who work back up to test the MVPOC at 4295, just abover the overnight high of 4294.25.

Hypo 2 is sellers become initiative and push through overnight low 4281.50 and test the lower end of intermediate term balance via taking out yesterday’s session low 4273.75 then 4271.25. If buyers are not present at this level then a continued exploration lower to the LVN at 4263.

Hypo 3 is the buyers blast through overnight high and MCVPOC 4295 and work to close the Monday-Tuesday gap up at 4313.25.

I have highlighted these levels on the following volume profile chart:

They’re done going down too.

The year is drawing to an end and order flow is atrocious across the board. There is enough noise out there, though, to get yourself into trouble.

So if you have some ideas you’re working, let them work, and god willing, this year will end soon.

Tomorrow isn’t promised.

Nasdaq futures are trading lower overnight as volumes continue to come in light on the globex market. Around 8:30am some chatter out of Russia resulted in a bit of a reaction from equity and gold prices, pushing the Nasdaq below Monday’s range and spiking gold higher.

At 9am the Case-Shiller Composite -20 data is due out and at 10am Consumer Confidence. The 10am news might cause some early chop before the market finds direction on the day.

The intermediate term is showing signs of coming into balance but still has a neutral-to-bullish skew. The monthly high is only about 20 Nasdaq points away and the quiet consolidation just below these levels increases the likelihood of a test up to 4323.75.

Early on I am looking for a bit of weakness to test the mcVPOC at 4295 where we see responsive buyers who work to close the overnight gap to 4313.25 and take out the overnight high 4318.

Hypo two is buyers push into the overnight inventory but get rejected away from Monday’s value 4309.50 and begin exploring lower to target a move down to 4295 and if they do not find responsive buying here then a continued move to 4285.25 and finally a gap fill down to 4281.50.

Hypo 3 sellers drive off the open and close the open gap down to 4281.50 early and continue testing lower to 4277.50, 4271.25.

I have highlighted these levels on the following volume profile chart: