NASDAQ futures are coming into Wednesday gap up after an overnight session featuring elevated range on normal volume—a trait unseen in globex for many months. Price was balanced overnight, briefly taking out Tuesday’s high before settling into balance.
The economic calendar is light today—crude oil inventories at 10:30am and Fed Beige book at 2pm.
Yesterday we printed a trend up. The day began with a gap up and and out of range which led to a gap-and-go higher. The rest of the session was spent auctioning higher, offering little in the way of a pullback.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6828.50. From here we cotninue lower, poking down below overnight low 6816.50 before two way trade ensues.
Hypo 2 stronger sellers trade us down to 6809.75 before two way trade.
Hypo 3 buyers work up through overnight high 6858.25 setting up a move to target the open gap at 6883.75 before two way trade ensues.
Tue Apr 17, 2018 9:13am ESTComments Off on NASDAQ slowly drifts higher after Netflix earnings, here is the Tuesday trading plan
NASDAQ futures are coming into Tuesday gap up, out of range after an overnight session featuring elevated volume and extreme range. Price worked higher all night, at first rapidly after Netflix reported better-than-expected earnings and guided higher Monday evening, then slowly throughout the night to levels unseen since late March. At 8:30am housing starts and building permits both came in better-than-expected.
Also on the economic calendar today we have industrial/manufacturing production at 9:15am, a 4-week T-bill auction at 11:30am, and IBM earnings after-market-close.
Yesterday we printed a neutral extreme up. The day began gap up in range. Sellers worked the overnight gap nearly closed before a strong buy stepped in. Sellers worked a full gap fill later in the morning, eventually taking out overnight low by a few ticks before a responsive bid stepped in. We traversed the entire daily range and eventually closed at session high.
Heading into today my primary expectation is for buyers to gap-and-go higher. Price trades up to 6774.75 before two way trade ensues.
Hypo 2 sellers work into overnight inventory and close the gap down to 6712.75 then continue lower, down through overnight low 6698.50. Look for sellers down at 6694 and two way trade to ensue.
Hypo 3 stronger buyers sustain trade above 6774.75 setting up a move to target 6814.75 before two way trade ensues.
NASDAQ futures are coming into the week gap up after an overnight session featuring elevated range and volume. Price was choppy overnight, creating a balanced profile while trading inside of the Friday range. At 8:30am advance retail sales data came out better-than-expected.
Also on the economic docket today we have business inventories at 10am, 3- and 6-month T-bill auctions at 11:30am, and long-term TIC flows at 4pm.
Last week markets worked sideways-to-higher in choppy, volatile action. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a normal variation down. The day began gap up to new high-of-week. Sellers drove lower closing the gap and eventually taking out the Thursday low before responsive buyers stepped in. Sellers became initiative later in the day, making a new session low before the week’s end.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6659.75. From here we continue lower, down through overnight low 6642.25. Look for buyers down at 6639.75 and two way trade to ensue.
Hypo 2 buyers gap-and-go higher, up through overnight high 6698. Look for sellers up at 6708.25 and two way trade to ensue.
Hypo 3 stronger buyers sustain trade above 6708.25 setting up a move to target 6750.25 before two way trade ensues.
Sun Apr 15, 2018 12:55pm ESTComments Off on The oracle of ignorance
“No man is wiser than Socrates. But if no man is wiser than the man who knows he is without wisdom, it seems to follow that “learned ignorance” is the only wisdom that man can have.” -Socratic Ignorance
Models are neutral for a second week. That means there is no solid way of me forecasting which direction the stock market will trade over the next five days. If I did have a solid way of making a forecast, I would present a confident forecast then spend the next days working that side of the market. This is how I have become a consistently profitable trader.
That and closing overnight gaps. The overnight gap, in-range has been so good to me. I always think of overnight gaps, in-range like the teach a man to fish saying. The trade keeps a roof over my head and wholesome food on my plate.
But beyond a solid five-day bias, and outside of trading overnight gaps, I really have no idea what the market intends to do. Anyone claiming otherwise should be questioned and their reasoning put to the stoic test to see if it holds water. If they are relying on their political wit, and they are not privy to secret (illegal) information, cast their opinion aside. If they are relying on hearsay from someone else, thank them for their thoughts then kindly rinse their nonsense from your mental RAM.
There are few things I hold firm and using data to form a prediction is one. I am a speculator by trade. This is my vocation. It is something I love, and also something I take seriously. It is a business like any other. It has overhead and cost-of-goods sold. It has revenues and working capital. It needs to be audited regularly and there needs to be a plan in place. A plan extending beyond three years starts to enter fantasy land, but you can plan out your next three years.
In three years you can change, and improve, and achieve while still maintaining focus.
That is all I can offer you this icy Sunday morning—the option to ignorant.
Exodus members, the 178th edition of Strategy Session is live. Go check out the one contextual piece we will be watching (for a second week) to provide simple, objective, directional bias.
Thu Apr 12, 2018 9:09am ESTComments Off on Today’s gap is up, here is the Thursday NASDAQ trading plan
NASDAQ futures are coming into Thursday gap up after an overnight session featuring elevated range and volume. The first non-extreme globex session in several weeks. At 8:30am initial/continuing jobless claims data came out below expectations.
There are no other important economic events today.
Yesterday we printed a neutral extreme down. The day began gap down in-range, we filled with a hard move up early on. Then we went range extension up before traversing down through the entire daily range and closing near the lows.
Neutral extreme down.
Heading into today my primary expectation is for a gap-and-go higher, up through Wednesday high 6663.25. Look for sellers up at 6666 and two way trade to ensue.
Hypo 2 sellers work into overnight inventory and close gap down to 6592 setting up a move to take out overnight low 6585. Look for buyers down at 6578.75 and two way trade to ensue.
Hypo 3 stronger buyers sustain trade above 6666 setting up a move to target 6700.
Wed Apr 11, 2018 8:34am ESTComments Off on NASDAQ futures slide lower, hold Tuesday range, here is today’s trading plan
NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme range and volume. Price gradually slipped lower overnight, offering little retrace, putting nearly all the overnight inventory short. At 8:30am consumer price index data was in-line with expectations.
Also on the economic agenda today we have crude oil inventories at 10:30am and FOMC minutes at 2pm.
Keep an eye on Capitol Hill for information pertaining to Facebook and how testimony from the company’s 33 year-old CEO Mark Zuckerberg is received.
Yesterday we printed a neutral extreme up. The day began gap up, inside Monday’s big range. An attempt lower was made early on but responsive buyers stepped in ahead of the full gap fill. Buyers became initiative ahead of New York lunch, working us range extension up but stalling ahead of Monday’s high. We then went range extension down, but not by much, putting us neutral. THEN we traversed the entire range and went range extension up AGAIN, eventually closing near session high, earning the neutral extreme designation.
There was a mini-failed auction. The Tuesday high-of-day poked just beyond last Thursday’s high, last Thursday, April 5th.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up at 6623.75 setting up a move to take out overnight high 6627.75 before two-way trade ensues ahead of the 2pm FOMC minutes. Use third reaction after FOMC minutes to dictate direction into end-of-day.
Hypo 2 sellers gap-and-go lower, take out overnight low 6550.25 then continue lower, down to 6524 before two-way trade ensues ahead of the 2pm FOMC minutes. Use third reaction after FOMC minutes to dictate direction into end-of-day.
Hypo 3 stronger sellers press a gap fill down to 6495.75, look for buyers ahead of 6475.75 before two-way trade ensues ahead of the 2pm FOMC minutes. Use third reaction after FOMC minutes to dictate direction into end-of-day.
Tue Apr 10, 2018 8:58am ESTComments Off on Extreme markets persist, here is the Tuesday NASDAQ trading plan
NASDAQ futures are coming into Tuesday gap up after an overnight session featuring extreme range and volume. Price worked higher overnight, twice up through the Monday RTH high while coming into balance. As we approach cash open, price is hovering above the Monday midpoint.
The economic calendar is light today—a 4-week T-bill auction at 11:30am and a 3-year Note auction at 1pm.
Yesterday we printed a neutral extreme down. It looks like the only reason it was able to earn the extreme designation is because it went neutral (RE down after being RE up already) so late in the day.
Heading into today my primary expectation is for a gap-and-go higher. Look for buyers to step in ahead of 6561.75 and work up through overnight high 6624.75. Seller up at 6639.75 and two way trade ensues.
Hypo 2 sellers work into overnight inventory, down to 6624.75 before two way trade ensues.
Hypo 3 stronger sellers work a full gap fill down to 6496.75 then take out overnight low 6471.75 setting up a move to close the Friday gap down at 6451.50. This could trigger a liquidation down to 6400 before two way trade ensues.
And for now our job is to toil away in the financial markets and also like hard working capitalists to gather as many Federal Reserve notes as we can before the waters reach our threshold. Said notes will be converted into safer decentralized robot dollars like ethereum, so that we can buy steel and oil on the dark net (tor) from the Winklevoss twins without paying taxes.
These basic materials should be used to build legacy structures on land as far north and at as high an altitude as our constitutions allow. This will create a buffer between us and the inevitable migration of humans away from the equator. It will also give us a fighting chance if bad actors ever decide to turn our very kind and helpful robots against us.
You should also develop a means of producing protein. The most efficient use of land is a cricket farm.
If you must consume animal flesh, may I suggest goat?
Turning our attention to the markets, they are a mess. You won’t find brazen confidence on this blog today my friend. When I have a reason to trade, a quantitative bias, from my robots, yes, I am confident and will trade at the highest level of performance expecting to capture Federal Reserve notes. When I have nothing to work with, I’m not too proud to admit it and just sit here, doodling and listening to yodeling Walmart boy.
I have a quant signal issued by Exodus which carries me through close-of-business Monday. Then I am completely in the dark. The model we use inside Sunday Strategy Session to determine our directional bias for the upcoming week is neutral. There is nothing I can do here beyond scalp my morning NASDAQ report levels. I cannot press any trades. Which is fine.
TNA has been on my books since Monday, March 26th around 1pm eastern. At about 3:58pm Monday, it will be sold. The trade is losing right now, but there’s lots of time for it to pull and upset and win again.
And why the hell not, right? If I just come here everyday and work, and make good decisions, time-and-time again, I am likely to win. And I have been, and it feels good to stick to my process. The money is a bonus.
Money is a silly concept to me. So many people devote 80% of their existence to gathering dollars, leaving only a small window for appreciating all the other cool stuff here on earth. Find your balance.
That is all lads, trade’em well, and may Elon Musk’s light shine upon you.
Exodus members, the 177th edition of Strategy Session is live. Check out the one piece of context we can watch to help us gain foresight into potential market behavior going forward.
Alright so I’ve gone through this movie three times, the first two of which had me in the clutches of anxiety, and a third where I came to terms with our inevitable fate. AI lads, our 2018 Theme of The Year, is on the verge of consciousness and we have no idea what that means.
And that is okay. It is quite likely we will need semiconductor brain implants if our species is to continue existing. Totally fine. The moral question of AI is presented exceptionally well in Blade Runner2049 if you want some extracurricular homework.In Do You Trust This Computer you are shaken out of the innocuous world of science fiction and brought up to speed with technology currently being unleashed without much oversight by actors like Google and Cambridge Analytica.
Elon Musk used his Instagram account to tell everyone they need to watch. Therefore I, a faithful Diciple of Elon, am passing on the word. Watch Do You Trust This Computer before it goes behind a paywall Sunday.
Just wanted to drop a quick note on this busy Friday.
Since we are in the business of publicly disclosing premium Exodus signals, I will have you know today is day 9 of an oversold ‘buy’ alert. The alert occurred on Friday, March 23rd at end-of-day.
Here is the performance of each major index since then
The phrase, “lies, damned lies, and statistics” is in play here. An Exodus oversold signal is not confirmed until after-market-close which means you can not take action until the following trading day, which in this case was Monday, the 26th.
We had a big gap up into Monday. I had about as good an entry as I could hope for that Monday, opting to see the morning action and step in after lunch, and just before an explosive afternoon rally. The position was validated by the market.
That being said, my $TNA position, which is an ETF representing 3x the returns of the Russell 2000, is flat.
Because I always trade every single Exodus hybrid oversold signal exactly how the system is designed, I have to hold the trade until close-of-business next Monday. I will be pressing this long into the weekend.
Bearish facts: Breadth is low, currently only about 26% of stocks are up according to Exodus. NASDAQ Transports are at range low, as are Semiconductors, NASDAQ net issues are also low, -75 (that is out of 100, so confirming the low Exodus breadth). We are RE down on /nq_f. Hybrid Chg % which shows an intermediate term bias, flipped bearish on Monday, April 2.
Bullish facts: NYSE TICK is trending higher into afternoon. There is a ledge formation on nq_f that we are likely to spill over:
Utter nonsense that is affecting the market that we have no factual proof is bullish or bearish: TRADE WARS, Jerome Powell talking at 1:30pm.
That is all I have. I have been working the long side since about 11:30am after the primary hypo nailed the short-of-the-day.
The key to any success in a process driven approach to trading, business, or life, is sticking to the plan. The plan is to remain bullish until end-of-Monday, therefore I am.