iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,632 Blog Posts

High-level thoughts and conviction investments

I want to share my high level thoughts and conviction investments before I renuciate all capitalistic pursuits in exchange for a simple life in the mountains. I will be off the grid until March.

The purose of this blog entry is to help us both gain a visceral understanding of why I have *faith* in my investments. This will serve to fortify my emotional state for when the inevitable uncertainties of long-term commitments arise, and maybe spark some ideas of your own.
The cat is out of the bag. In 2016, a reality TV host became President of the free world. A ruthless capitalist usurped career politicans to take the White House. In 2018, Bitcoin and other digital currencies established themselves as players inside the financial ecosystem.

Together these events called into question the role of nation states, their alleged leaders and the ability of these leaders to force their will upon the collective consciencness of humanity, democratically or otherwise.

Enter 2020, a period of economic prosperity the likes of which no living human has seen. We are tracking the PHLX Semiconductor index closely, which has been validating our theroy about what is driving our current economic expansion. Learning computers. Only a handful of companies are at scale and positioned to capture most of the growth. Foremost are big tech companies. Champions of the interwebs. It is becoming apparent that the CEOs of Big Tech are the true leaders of the free world and the only ones progressing society in a positive direction.

My two favorite CEOs are Elon Musk and Jack Dorsey. I hold reverance for them both and emulate them in my own endeavors. Elon puts his net worth on huge issues facing humanity and makes it sexy. Jack is a modern Cato the Younger. Humble and pure. Twitter is the subconscious inner dialogue of humanity and a must own stock. Twitter is my #2 largest position behind Tesla.

With nations and their politicians losing a grip on society, what are affluent left to do? They love having a seat at the proverbial head table. They have little choice but to take to the public markets and secure what stake they can afford in the equity of these giants. Names like Microsoft, Apple, Alphabet and Amazon. These are conviction investments. These companies are countries, only more powerful.

Supply of quality tech equity is low. Have you ever played Monopoly? There’s only one winner. There are only a handful of companies worth owning. Their share prices no longer make sense using historic valuation methods. Those were more simple times, when businesses merely bribed or lobbied the state. Now these firms are the states.

Amazon is a ubiquitous nation that doesn’t care about the silly lines drawn on maps by humans reverting to their animalistic ways. This is Jeff Bezos’s world. We’re just living in it.

Next up is the battle for who will feed the ultimate consumer—the hungry American. Heading into the ’20s there are only a few companies at the distribution scale needed to augment the way food winds up in people’s kitchens and ultimately their bellies. Obviously there is some crossover here with Amazon, which is why Amazon is an absolute MUST OWN. A rumor is passing through one of our affluent neighborhood that the entire Kroger organization is being tailored for am Amazon buyout. The origin of the rumor is salient enough that I am all for investing in Kroger.

The other top players in autonomous grocery are Walmart and Costco. Both must owns.

Finally we circle back to digital currency. You would have to be insane to ignore this asset class. Foremost, I believe ownership of Facebook shares is necessary until we see resolution of their Libra scheme. I cannot wait until Mark Zuckerberg can reward us Libra coins for good behavior on his platforms. I believe this will put an end to fear mongering, spreading lies and hate once and for all. There is something pavlovian about our egos, even the most masculine. Look at how many rough and tough guys are going vegan after that Netflix documentary (Netflix weilds an interesting sword in modern society, but they do not make my conviction investment list). Libra could end up being the global reserve currency, should it succeed in going live. Even the toughest 8chan shit poster will fall in line for some Libra coins.

Every investor should have a portfolio of digital coins. I must admit I am not sophisticated enough to have clarity on exacty which coins. I hold bitcoin, bitcoin cash, bitcoin SV, ethereum and EOS.

There you have it. These are my high level thoughts and conviction investments. Perhaps a few weeks of sleeping on the cold earth and breathing sweet mountain air will reveal another. My fate is unknown, predetermined by the gods. Maybe while in the mountains, I will be granted a peak into the doors of Valhalla and handed stock picks from the norse gods.

Thank you for your time,

Raul Santos, February 14th, 2020

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Gap down in range ;-) huge NFP beat, here is Friday NASDAQ trading plan

NASDAQ futures are coming into Friday gap down after an overnight session featuring extreme range and volume. Price was balanced overnight, chopping briefly to a new all-time high during globex trade before settling into balance above Thursday’s midpoint. At 8:30am Nonfarm payroll data came out stronger-than-expected, expand the following tweet to see more info on the job’s report:

As we approach cash open, price is hovering just above the Thursday midpoint.

On the economic calendar today we have the Fed releasing their semi-annual monetary policy report to Congress at 11am followed by consumer credit at 3pm.

Yesterday we printed a double distribution trend up. The day began with a slight gap up that sellers quickly resolved during the opening auction. From then-on buyers were in control, working price up near all-time highs before settling into a tight balance along the high. We ramped up near end-of-day but stopped a few points shy of new highs.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 9454.75. From here we continue higher, up through overnight high 9471, setting up a move to tag 9500 before two way trade ensues.

Hypo 2 sellers work down through overnight low 9395. Look for buyers down at 9379.50 and two way trade to ensue.

Hypo 3 stronger sellers trade down to 9341.50 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ holds onto early week gains, here is Thursday trading plan

NASDAQ futures are coming into Thursday gap up after an overnight session featuring extreme range and volume. Price worked higher overnight, coming to within a few tick of record highs (but not exceeding them) before falling into a tight balance along the highs. At 8:30am initial/continuing jobless claims data came out mixed. As we approach cash open, price is hovering in the upper quadrant of Wednesday’s range.

The only other economic events today are 4- and 8-weekT-bill auctions at 11:30am.

Yesterday we printed a normal variation down. The day began with a pro gap up to new all-time highs. Then an open drive down send price careening lower, pausing briefly to chop around 9400 before continuing lower to close the overnight pro gap. Sellers continued a bit lower before finding responsive buyers near Tuesday’s NVPOC. It was choppy from here, with buyers eventually ramping price back up to the daily midpoint. We ended the session just below the mid.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 9383.25. From here we continue lower, taking out overnight low 9375 before two way trade ensues.

Hypo 2 stronger sellers trade down to 9342 before two way trade ensues.

Hypo three buyers gap-and-go higher, defending 9400 before working up through overnight high 9460, setting up a move to 9500.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ races higher overnight, even more coronavirus fear subsides, here is Wednesday trading plan

NASDAQ futures are coming into Wednesday pro gap up, a second pro gap in a row, after an overnight session featuring extreme range and volume. Price was balanced overnight until about 3:30am New York when some news of a coronavirus cure spiked price higher. Since then, there was a bit of a balance around 9420 and as we approach cash open, price is hovering at record highs, up beyond 9450.

On the economic calendar today we have ISM Non-Manufacturing/Services composite at 10am followed by crude oil inventories at 10:30am.

Yesterday we printed a trend up. The day began with a gap up and two-way auction before buyers stepped in and methodically discovered higher prices. After taking out the 9300 century mark the auction tightened up and balanced for a bit before continuing higher and ended near high of day.

Heading into today my primary expectation is for the higher timeframe to be active. We are out of balance. Primary hypo is for buyers to gap-and-go higher, working up to tag the 9500 century mark before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and check back to that 3:30am news, working down to 9353.75 before two way trade ensues.

Hypo 3 stronger sellers trade down to 9326.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Coronavirus fear subsides, NASDAQ up a quick +140, here is Tuesday trading plan

NASDAQ futures are coming into Tuesday pro gap up after an overnight session featuring extreme range and volume. Price was trend up overnight, after a brief bout of selling following weaker-than-expected sales from Google parent Alphabet, Inc:

Alphabet Q4 EPS $15.35 Beats $12.53 Estimate, Sales $46.075B Miss $46.94B Estimate

 

Google earning sent price about 30 points lower during settlement, but that was all the control sellers would have for the rest of the Globex session. From then onward, price was trend up, forming one short squeeze after another, methodically migrating price back up near all-time highs. Around 7am the World Health Organization declared that were are not in a pandemic with Coronoavirus. This news was greeted with an additional wave higher in prices. As we approach cash open, price is about 30 points off of all-time highs.

On the economic calendar today we have durable goods and factory orders at 10am.

There are no major earnings due out for the rest of the week.

Yesterday we printed a normal variation up, short-squeeze. The day began with a gap up and drive higher, with buyers driving price up beyond our weekly measured move ATR band 9131.75. This right away suggested that something big might be going on, with the higher timeframe active. Shortly after the first hour of trade we went range extension up for a few minutes before we settled into a tight chop along the upper quadrant for the duration of the session. Late in the day we fell back into the midpoint. The action served to printed a p-shaped market profile, which suggests a short squeeze occured. These are often short-term phenomena, however with the upward action seen overnight, it appears to be more that that.

Heading into today we are way out of balance. Expect the higher time frame to duke it out for the first hour or so. Primary hypo is for buyers to gap-and-go higher, trading up to 9280 before two way trade ensues.

Hypo 2 stronger buyers sustain trade above 9280 and make a run for 9300.

Hypo 3 sellers work into the overnight inventory and tag the odd open gap at 9218.75 before two way trade ensues.

Hypo 4 some kind of liquidation takes hold, ripping down through 9200, pausing briefly at 9172.50 before continuing lower, effectively erasing the overnight gains and closing the gap down to 9113.75 on our way to taking out overnight low 9073. Look for buyers down at 9088 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ up a quick +66 into February, day after trend day ;-) here is the Monday trading plan

NASDAQ futures are coming into Monday gap up after an overnight session featuring extreme range and volume. Price chopped higher overnight, trading up beyond last Friday’s midpoint by about 15 point before coming into balance. As we approach cash open, price is hovering about 15 point below the Friday mid.

On the economic calendar today we have ISM employment/manufacturing at 10am followed by 13- and 26-week T-bill auctions at 11:30am.

Major NASDAQ component and Google parent Alphabet, Inc is set to report earnings after the bell.

Last week kicked off with a gap down. We spent half the week reversing it, eventually doing so Wednesday morning. Thursday ended strong before a gap down Friday kicked off a trend down into the weekend. The last week performance of each index is shown below:

On Friday the NASDAQ printed a trend down. The day began with a gap down in range followed by a drive lower. Sellers worked down below the Thursday low before a bit of a bid stepped in. Said bid was overrun shortly after New York lunch. We ended the session with a big of a ramp higher, ramping ahead of the open gap left behind Monday.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 9092.25 to tag 9100. Look for sellers ahead of 9111 and two way trade to ensue.

Hypo 2 sellers work into the overnight inventory and close the gap down to 9016.25 setting up a move down through overnight low 8975. Look for buyers down at 8958.25 and two way trade to ensue.

Hypo 3 stronger sellers trade down to 8900.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Bunker Buster Alert: IndexModel calls for acceleration to the downside

I like the timing of this signal. Right into February. Right into a Monday where most americans are operating at seventy percent, slowed down by their big man appetite for jalapeño poppers and footballs. It is a good time to catch the drunk american flat footed.

The coronavirus was nothing compared to an IndexModel Bunker Buster. This signal hasn’t fired since 06/02/2019 and the signal before that was way back on 12/23/2018. The signal calls for price to accelerate to the downside. This can look a few different ways.

A huge gap down Monday that is accumulated all morning, marking the low for good.

The selling begins in earnest during regular trading hours, sucking in some dip buyers before the real sell hits—NASDAQ down at least -250 intra-day, likely more like -400. This sets off a multi-day sell spree. Fuckers take to CNBC entertainment news, providing the teevee audience all sorts of reasons.

Meanwhile, over here on the humble Raul blog. We simply chalk it up to the Sublime Harmony of Mathematical Precision aka S.H.O.M.P. —-a term coined by none other that SENOR TROPICANA.

I am not such an ego maniac that I will make these dire forecasts without the caveat that I may be wrong. After all, these are the roaring ’20s lads, a period of economic prosperity the likes of which no living being has ever seen. The drivers are Big Tech and their fearless leaders who would never doubt their vibes. Leaders who are generating GDP via autonomous flywheels that spit off money at margins in excess of anything those titans of industry could ever believe possible during the last roaring ’20s.

Anyhow the plan is simple. Don’t get cute. I will play for lower prices if we DO NOT start the week with a major gap down. I will not try and time the swing low. Instead I am going to deploy some fresh capital throughout the week, adding to my favorite stocks (TSLA, TWTR) and making an allotment to the RRF Motif.

Yes you heard me right, I am going to buy more Tesla. If you don’t like it, don’t look. You guys can mess around with ghetto coronavirus stocks, holding them for 4 days or whatever. I only buy thoroughbreds and I do so with no intention of selling ever, or at least not anytime soon.

I will sell some shares of TSLA at 1,000 but only because I want a solar roof.

You have, all of you have reasons why you invest and trade. I seriously doubt most of you dig deep into the reasons. Money, yes. Freedom, cool. For what? What will you do with it? Why?

Anyone reading this, trade’em well. This first week of February is setting up to be a real bear.

Raul Santos, February 02, 2020 (02/02/2020)

Exodus members, the 272nd edition of Strategy Session is live, be sure to check out the section on semiconductors. The picture on the PHLX is pretty clear and how we behave at the next signpost is likely to tell a story for the whole market.

 

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Month-end, NASDAQ down a quick -30, here is Friday trading plan

NASDAQ futures are coming into Friday gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, trading down near the per-Amazon earnings spike before coming into balance. At 8:30am PCE core data came out in-line with expectations. As we approach cash open, price is hovering below 9200, about -50 points off the overnight high.

On the economic calendar today we have Chicago purchasing manager at 9:45am followed by the final January reading of sentiment from the University of Michigan.

Yesterday we printed a neutral extreme up. The day began with a gap down that buyers quickly resolved with an open drive up. After closing the gap and trading a few points beyond 9100,responsive sellers stepped in and reversed the morning gains and more, going range extension down and pressing deep into Tuesday’s conviction buy range. Then as the late afternoon progressed, bidders stepped back in, reclaiming the midpoint then defending it around 3pm before rallying price to a new high of day, pushing us neutral. Amazon earnings then propelled a sharp move higher, trading up beyond last Friday’s midpoint during before the settlement period ended. We closed near the high.

Neutral extreme up.

Heading into today my primary expectation is for sellers to be actively defending 9200, taking out overnight low 9138 to set up a move down to 9100. Look for buyers down at 9086 and two way trade to ensue.

Hypo 2 buyers work into the overnight inventory and trade up through overnight high 9248.75. Look for sellers up at 9257.25 and two way trade to ensue.

Hypo 3 stronger buyers trade up to 9280.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Sellers asserting control overnight despite mostly strong earnings, $AMZN on deck, here is Thursday NASDAQ trading plan

NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, trading down near the Tuesday low before discovering a responsive bid. Then price worked back up near the Wednesday low but could not reclaim it. Sellers rejected a move back into Wednesday’s range, and we have been in a choppy balance below the Wednesday low since. At 8:30am GDP came out inline with expectations and initial/continuing jobless claims data came out mixed-to-slightly-worse than expected. As we approach cash open, price is hovering about -12 point below the Wednesday low.

Microsoft, Facebook and Tesla reported earnings after hours Wednesday. MSFT is higher by +3.70% after beating analyst expectations,  FB is down -7% lower after signaling a slowdown and announcing a share buyback and TSLA is up +8.95% after the company reported surprisingly strong numbers for the second straight quarter.

On the economic calendar today we have no major events. Amazon reports earnings after the bell and will likely move the entire index.

Yesterday we printed a normal day, which is anything but normal. They happen less than 20% of the time. The day began with a gap up into last Friday’s range. Sellers quickly drove price lower during the first 45 minutes of trade, working down into an interesting low volume pocket left behind Tuesday. Strong responsive sellers were on the scene here and nearly worked price to a new high of day, attempting to propel higher after the FOMC rate decision. However they were stopped a few ticks short, forming a weak high before slipping back down through the daily mid by late afternoon. The first 45 minutes of trade were so dynamic that higher time frame participants never managed to press a range extension. We ended the day in the lower quadrant.

Normal day.

Heading into today my primary expectation is for buyers to reclaim the Wednesday low 9072.25 and sustain trade above 9085, setting up a run up through overnight high 9137 and a continuation up through the Wednesday weak high 9185.75. This sets up a run at 9100. Look for sellers up at 9113 and two way trade to ensue.

Hypo 2 sellers defend 9085 and push us down from it, working down through overnight low 9003.50.  Look for buyers down at 9000 and two way trade to ensue.

Hypo 3 stronger sellers work a Monday gap fill down to 8954 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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$AAPL reports strong, $MSFT $FB $TSLA on deck, here is Wednesday NASDAQ trading plan

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring extreme range and volume. Price worked higher overnight, in part due to strong earnings from Apple after the close Tuesday.

Apple Q1 EPS $4.99 Vs $4.18 Last Year

Shares of the most valuable public company in the world are up just shy of +2% in pre-market trade.

As we approach cash open, the NASDAQ is currently trading up beyond Tuesday’s range, inside the lower quadrant of last Friday’s trend down.

On the economic calendar toady we have pending home sales at 10am, crude oil inventories at 10:30am and then an FOMC rate decision at 2pm. The consensus is for no change to the Fed’s benchmark borrowing rate, however investors will be keen on any word use and tone from the Fed Chairman when he delivers a press conference at 2:30pm.

Also be aware that the second and fifth largest companies report earnings after the bell today, Microsoft and Facebook. Both are potential index movers. Tesla also reports after the bell.

Yesterday we printed a double distribution trend up. The day began with a gap up near the Monday high, and after a two-way auction buyers stepped in and drove price higher. Price went slowly trend up all day before coming into a tight balance near the end of the session, just below last Friday’s range.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 9103.75. Then we continue lower, down through overnight low 9091.75. Look for buyers down at 9089.25 then chop. Then look for the third reaction after the Fed presser to provide direction into the close.

Hypo 2 stronger sellers trade down to 9040. Then look for the third reaction after the Fed presser to provide direction into the close.

Hypo 3 buyers gap and go higher, trading up through overnight high 9157 setting up a move to target 9192 before two way trade ensues. Then look for the third reaction after the Fed presser to provide direction into the close.

Levels:

Volume profiles, gaps, and measured moves:

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