iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,075 Blog Posts

The gains of 2021 were fake and had to be undone

When I hear the dang boomers say, “it’s not a profit until you book it,” a dark part of me wants to make to kill.

We really made strides these last few years towards dismantling nationalism, nation-states and the whole concept of lines on a map. Big tech was blessed with giga-valuations, and checks being mailed out to every american simply for existing called fiat into question for real.

The old tiger (U.S. dollar reserve currency) sensed its last fight and went to battle systematically dismantling all this hubris.

Most stock charts have erased any progress made during that mysterious grey time that was 2021, back when we were in lockdown but weren’t in lockdown? When two jabs gave a chap freedom to go into a small hot room with a bunch of women and mouth breathe, but it was frowned upon by the weak immune systems of the american gen pop.

The truth is, we can now see, clear as a liberty bell, that those 2021 advances were fake. Anyone who cashed out during that time can now see that they were in fact a champion.

My google pixel pops up photo memories and this time last year I was putting the finishing touches on that bastard kitchen. That project was funded by the dang speculative markets, and I hated all those trips to the tile store and ikea and Lowes because I wanted those dollars to stay in the speculative markets.

In hindsight, of course, I am grateful. Because I built that super gay kitchen to stand the test of time. I no longer have to prepare meals on a busted ass stove or plate food on green Formica or worsh ma giant stock pot in a little baby sink. Would that 40-or-so thousand fiat american dollars bought some bored apes and become 400-or-so fiat dollars? Or would it have stayed in Tesla and doge for the great dismantling?

We dunno.

The great bull run of the last five-or-ten years was my second major economic cycle, and I was operating on hard learned lessons from the prior one, that my degeneracy would always lead to me pressing risk so I’d better convert some gains into something else because too much liquidity in my purse ends up being taken away by the citadel.

I guess this entry is a gratitude post for being somewhat in the right state of mind last year. I’m grateful for a clean kitchen and a new chunk of earth to grow corn upon. I turned into a real menace towards the end of the cycle. Putting my hair in braids and accosting Goldman Sachs bankers via Twitter. And of course I regret making my already too big TWTR position even bigger towards the end of ’21. But next cycle I shall do better. I’ll probably have a complete grey beard by then but those greys are wisdom yes?

I’ve been made to be humbled once a gain by market mechanisms, and I have no choice but to dig in for another few hard years of chopping wood.

It’s feast and famine at the House of Raul [HoR] always has been. Not sure if I’d enjoy life any other way.

I was out late last night, amongst the people, listening to loud house musics and chewing mushrooms, and I couldn’t help but appreciate how pretty dang decent Detroit’s trajectory seems to be.

A storm is coming and us post industrial wasteland folk have the infrastructure to thrive during it. Ten foot fences. Steel plate shutters. Walled gardens.

So maybe we just savor the sights and sounds of boomers and their chaos. The Ray Dalio’s of the world and their chronic paranoia.

A car might be the hardest thing in the world to build.

Raul Santos, May 22nd 2022

And now the 387th edition of Strategy Session. Enjoy.


Stocklabs Strategy Session: 05/23/22 – 05/27/22

I. Executive Summary

Raul’s bias score 2.65, medium bear. Buyers follow through on their late-Friday buying into the new week. Then watch for FOMC minutes out Wednesday afternoon to dictate direction into the second half of the week.

Major semiconductor NVIDIA is set to report earnings Wednesday after the bell.

II. RECAP OF THE ACTION

Bit of a rally through Tuesday then heavy selling came in and sent price down through last week’s lows on all indices except the Russell, which was bullish divergent. Then we had a moderately strong ramp rally into Friday close.

The last week performance of each major index is shown below:

Rotational Report:

Wall Street punished share prices of several major retailers last week after they reported earnings and that is reflected in sector rotations which saw Staples and Discretionary heavily rotated away from. Meanwhile Utilities and Healthcare were positive on the week. Energy continues to trade independent of the overall market.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Bulls took back control of money flows ten weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But then seven weeks ago sellers negated that control.

The ledger once again skewed to the negative side, but not to as extreme a degree as the prior two weeks.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Hybrid Change %

While both IndexModel and Stocklabs oversold signals have been having a rough go at this tape recently, both being in a draw down phase of their statistics, the Hybrid Change % has been a bit more reliable.

I use this daily reading to assess who is in control of the tape intermediate term. It has flip flopped a bit these last few days, but before then if you flip through the data the biggest absolute readings have been to the downside. This data point has done a decent job of staying on the dominant side of the tape.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Buyers follow through on their late-Friday buying into the new week. Then watch for FOMC minutes out Wednesday afternoon to dictate direction into the second half of the week.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Down channels and other migrations

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Transports accelerated to the downside last week, and the downward channel remains in place. Discovery down.

See below:

Semiconductors could be in the process of accepting a new range here, which lines up with the 2021 lows. Had to say, but maybe this index is accepting value around here, a few tiers off all-time highs but still a long way up.

Ether is quite messy. We can see a recent attempt at balance here, which sort of resembles a bear flag. These type of obvious technical patterns rarely resolve the way technical analysis books say they will. But we could see an attempt down-and-away from the flag. How that is received will tell a story.

V. INDEX MODEL

Bias model is neutral for a fourth consecutive week after going Bunker Buster four weeks back after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

We’ve had three Bunker Busters in recent history, four weeks ago, seventeen reports back and a third twenty-five reports back. The Bunker Buster before these recent three was sixty-three weeks ago.

Here is the current spread:

VI. 12-month Technical Oversold

On Monday, May 9th Stocklabs signaled hybrid oversold on the 12-month algo. This is a 10-day bullish cycle that runs through Monday, May 23rd end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“And why should we feel anger at the world? As if the world would notice.” – Euripides

Trade simple, willing to accept the news and noise

 

Comments »

Carrying water

The new information out of the equity markets last week is that prices were too high. They went lower and now we don’t know whether they’ll continue going lower but we do know they were apparently too high a few weeks back.

That’s my intellectual analysis. Real bearish mf could probably contrive something that sounds more intelligent. Some ‘why’. But that is not my game. I am a Big Tech perma bull and I am being punished for keeping false idols.

Nevertheless, it is difficult to kill me as I am already dead. This market has gutted me at least 4-5 times in my life and the good news is I’m still here and overall the numbers on the screen that say what I am worth are up up up.

They don’t want some free speaking, independent thinking vagabond roaming around america, growing tobacco and securing deeds on chunks of earth, but here we are.

I have to put 60 shiseido peppers in the ground and it’s about 86 degrees. So I must bid you adeau.

For now.

Raul Santos, May 15th 2022

And now the 386th edition of Strategy Session. Why the heck not? Enjoy


I. Executive Summary

Raul’s bias score 2.85, neutral. Buyers actively control the tape throughout the week. Watch for volatility Tuesday with Walmart set to report earnings before the bell and Powell on deck to speak in the afternoon.

II. RECAP OF THE ACTION

Equity markets were already under heavy selling pressure by Monday morning. Price was choppy through Wednesday then started to sell of Thursday. There was a strong ramp higher late Thursday into closing bell and that carried through to the weekend, with Friday strong across the board.

The last week performance of each major index is shown below:

Rotational Report:

A bit of relative strength from Staples. Otherwise continued strong selling rotations.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Bulls took back control of money flows nine weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But then six weeks ago sellers negated that control.

Sellers dominated the money flows again last week. Ledger is skewed to the sell side.

Sell flows becoming a bit extended here, which has me on the lookout for a ‘relief’ rally.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Nearly six months off the trading desk

One of my earliest mentors in active futures trading was an Australian chap who used to always tell me trades were like busses, that another one was always coming.

Because at the time I was hot wired to want to catch every single little oscillation in price. I would magnify the chart to a scalping time frame and sometimes execute over 50 trades in a matter of minutes.

It was a bit excessive.

The more I honed my skills, the more selective I became. I still rapid fire when I am actively trading, but most of the time I just sit and wait for an algo to tell me to go live.

Now this latest sit, me going offline in December and not trading for almost six months now. It has been a mental challenge. But I know I am not in a position to trade well right now. I have this dang year two farm project and it is demanding a lot of my brain power.

These markets were here long before me and will be around long after I am gone. I am excited to get back to work, but honestly it has been nice to be an observer during this high volatility slide lower.

I see active traders who love volatility. My approach actually does best when we’re sort of lazily drifting.

So perhaps by the time I go live those conditions will return. We don’t know.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Buyers actively control the tape throughout the week. Watch for volatility Tuesday with Walmart set to report earnings before the bell and Powell on deck to speak in the afternoon.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Sellers blow out ranges

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Transports and pretty much everything else were sold hard last week, sending price out of range. Now it appears this chart is in a downward channel. Discovery down.

See below:

Semiconductors lost range. There may be a new range here but overall it was a discovery down move to arrive here.

Ether sort of messy. Perhaps finding a new range.

V. INDEX MODEL

Bias model is neutral for a third consecutive week after going Bunker Buster three weeks back after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

We’ve had three Bunker Busters in recent history, three weeks ago, sixteen reports back and a third twenty-four reports back. The Bunker Buster before these recent three was sixty-two weeks ago.

Here is the current spread:

VI. 12-month Technical Oversold

On Monday, May 9th Stocklabs signaled hybrid oversold on the 12-month algo. This is a 10-day bullish cycle that runs through Monday, May 23rd end-of-day. Here is the final performance of each major index over the cycle:

VII. QUOTE OF THE WEEK:

“He will face a battle he knows not, he will ride a road he knows not.” – Gilgamesh

Trade simple, we don’t know

Comments »

Mother’s Day blog entry

Listen chaps, we’re really into it now. The markets are dipping and dipping and have room to keep dipping. The Feds are hellbent on putting inflation in place with rate hikes. The Rooskis are settling in for a long summer battle. The conservatards are bleeding back onto Twitter. And the north is finally heating up.

We’re barrelling full speed into 90 days of intense heat, hedonistic gardening and disco raves.

My knees and ankles have gone bust Punishment for three hard years of laboring in the name of financial freedom.

Part of me wants to hang it all up and beg my old employeer to re-enstate me at 75k/annum as an excel spreadsheet jockey.

In esence, I am nearing desperation lads. These very well could be the emotions of a market nearing a local bottom.

We don’t know.

But it certainly feels that way.

At a minimum, I need to stop running around building gardens soon and instead sit in a chair and click orders in-and-out of the NASDAQ futures. This pain in my heckin’ legs is telling a story. I work too hardt.

All that said, the one duty of son Raul is to present an air of complete success and order to the women in my life on Mother’s day. Women, in general, worry too much. Let cook them some chicken meat and set their minds at ease.

Okay for now,

Raul Santos, May 8th

And now the 385th edition of strategy session.


Stocklabs Strategy Session: 05/09/22 – 05/13/22

I. Executive Summary

Raul’s bias score 2.53, medium bear. Buyers show up early in the week and work price off of last week’s lows. Then look for third reaction to Wednesday morning’s CPI data to dictate direction into the second half of the week.

II. RECAP OF THE ACTION

Choppy week. Essentially marked time until the FOMC announcement (50bp hike) then rallied. Thursday morning the entire Fed rally was reversed and we were probing the weekly lows into the end of Friday, but overall a rough marking of time.

The last week performance of each major index is shown below:

Rotational Report:

Energy sort of dwarfed the action in other sectors, but we can see Utilities and Financials showing divergent strength which speaks to the lack of conviction amongst market participants.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Bulls took back control of money flows eight weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But then five weeks ago sellers negated that control.

Sellers majorly dominated the money flows again last week. Ledger is skewed to the sell side.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Bleak bounce, what next?

Next week is much lighter in terms of earnings and economic events. The CPI data might put some volatility into the tape, but overall the markets will be left to their own devices for price discovery.

We have been bouncing along range low in several key areas of the market for many weeks. The longer we do so the more likely it becomes we make another leg lower.

The big spike last week post Fed was completely faded and it seems to have soured the mood of speculators quite a bit. What this all means heading into the second week of May we don’t know.

The process of finding a low has been a challenge recently. It has to be around here somewhere.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Buyers show up early in the week and work price off of last week’s lows. Then look for third reaction to Wednesday morning’s CPI data to dictate direction into the second half of the week.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Ranges are still in tact

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Transports printed a nice wick Friday, an excess low along range low could set the stage for a bounce next week.

See below:

Semiconductors seem to be building energy down at range low. The next explosive move could be soon. Range is still in play.

Ether looking less bullish than it had in prior weeks, but is still in range.

V. INDEX MODEL

Bias model is neutral for a second consecutive week after going Bunker Buster two weeks back after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

We’ve had three Bunker Busters in recent history, two weeks ago, fifteen reports back and a third twenty-three reports back. The Bunker Buster before these recent three was sixty one weeks ago.

Here is the current spread:

VI. 12-month Technical Oversold

On Friday, April 22nd Stocklabs signaled hybrid oversold on the 12-month algo. This is a 10-day bullish cycle that runs through Friday, May 6th. Here is the final performance of each major index over the cycle:

VII. QUOTE OF THE WEEK:

“What matters to an active man is to do the right thing; whether the right thing comes to pass should not bother him.” – Goethe

Comments »

Sticking to my guns

I might be wrong but at least I’m honest.

And for the most part jovial. When these heckin’ bears taste some blood they really turn into some menacing fuckers.

Maybe this isn’t good enough to propel me into Miami Beach level wealth, but what I do out here works for me. I have not been trading futures this year, but I managed to scrape a few bucks off the streets just hustling. Sofa king shameless. There is nothing glamorous about what I do on a day-to-day basis.

I am oldt. The beard greys have started to creep up off my chin and into ma cheeks. Sometimes I dig holes for two days strait, just to plant a bush.

Women pay me to do all sorts of things. These sort of gigs come easy to a chap whose handsome.

And kind.

So I extracted some fiat and last week I allocated that fresh fiat to long term investments in big tech — GOOGL, FB, AMZN, MSFT TSLA and TWTR. I don’t use margin in my long term books. Using leverage is how the citadel gets you, man. Fuck that fucking order flow reading snake right in its mouth by not using margin/leverage on long term accounts.

I will get back to working futures soon. Few understand that the skill set I possess is not something they teach at the university. The daily application of auction theory to short term oscillations in the world’s most libertarian battlefield, index futures, develops a mind over the years into a certified money extractor.

One does not simply walk away from that vocation, just as one would not abandon say the cosa nostra.

I’ve been chipping away at these markets since the turn of the millennium, and I reckon I have about 30 more years before my brain goes dull, so don’t plan on being rid of me any time soon.

Nation states are biting back at Big Tech. Beware an old tiger sensing his last fight. These draconian Chinese covid restrictions are an expensive theatrical performance to keep the west bleeding. But America has reserve status and they’re fighting like hell to keep it, fed fucking the prices of big tech stocks back into place.

But all these lines on maps and ideologies will be put to the test soon. A storm is coming. And I will side with the technocrats and their new internet coins and their big ass algorithm over any three letter organization.

The battle for the hearts and mind of the west comes down to one thing. Who owns Twitter?

And who might that be?

Okay for now,

Raul Santos, May 1st, 2022

And now the 385th edition of Strategy Session


Stocklabs Strategy Session: 05/02/22 – 05/06/22

I. Executive Summary

Raul’s bias score 2.33, medium bear. We may see some follow-through selling early next week, but watch for Berkshire Hathaway earnings out early Monday to perhaps instill some confidence in the tape. Then watch for third reaction to the Wednesday afternoon FOMC announcement to dictate direction into the second half of the week. Then non-farm payroll data early Friday could serve to accelerate the prevailing direction into the weekend.

II. RECAP OF THE ACTION

Modest gains Monday. Then hard selling Tuesday morning and through the close. Then buyers rallied the tape through Thursday afternoon only to see sellers return price back down to the lows Friday.

The last week performance of each major index is shown below:

Rotational Report:

Sixth week of bearish rotations. Discretionary pummeled after Amazon earnings.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Bulls took back control of money flows seven weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But then four weeks ago sellers negated that control.

Sellers majorly dominated the money flows again last week. Ledger is skewed to the sell side.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

The calendar, the moon, the cycles and the seasons

Bunker buster came and went. We don’t have that signal to lean on next week if sellers start accelerating this thing to the downside.

If sellers do accelerate then we may start to see panic hit the tape for the first time since this correction began.

We have Berkshire reporting early Monday. I expect that report to set the mood early on.

We are one week into a 12-month oversold cycle and (not that I will track it but) we had an uncommon ping on the 10-year oversold algo back on Tuesday. SPY is lower since both signals went live. Statistically, we are quite over due for a rally.

The FOMC meeting Wednesday afternoon is a live meeting, with CME fed fund futures pointing to a 97.1% chance of a 25 basis point hike to the benchmark borrowing rate. By late Wednesday afternoon we ought to have a clear idea of how investors feel about this.

Then Friday we have sort of a river card with non-farm payroll.

We are coming into a new calendar month. This first week means fresh capital flowing in from the contributions of millions of w-2 employees nationwide whose retirement is pegged to the outcome of the S&P 500.

We had a new moon yesterday and that rock keeps growing right up into the May 16th Flower Moon.

Spring is here for real in the north and people are acting wild, propelled into action by their hormones and nature’s signals.

The cycles are all lined up — we’re due for a bounce but if sellers take the initiative we could see panic. I have a difficult time forming bias with this many factors in play. Just planning to take the week one day/event at a time.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

We may see some follow-through selling early next week, but watch for Berkshire Hathaway earnings out early Monday to perhaps instill some confidence in the tape. Then watch for third reaction to the Wednesday afternoon FOMC announcement to dictate direction into the second half of the week. Then non-farm payroll data early Friday could serve to accelerate the prevailing direction into the weekend.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Really spending lots of time on the low-edge of balance

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Transports still appear to be in balance.

See below:

Semiconductors are sort of re-imagined this week, under the notion that we’ve been in discovery down since the start of the year and what that might mean in terms of rotations. There is still room for semiconductors to hold range and probe back higher, but the longer price lingers down here, the more likely we see another discovery down move.

Ether sellers managed to take back the 61.8% Fibonacci retracement of that leg up we’ve been monitoring. The chart is starting to look less like discovery up, more like balance.

V. INDEX MODEL

Bias model is neutral after going Bunker Buster last week after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

IndexModel has been firing off lots of signals and doing a decent job navigating this tape. This week’s data sort of rhymed with December 16th 2018. Back then we Bunker Bustered, then popped a bit, then the bottom fell out of the market. But eventually the uptrend resumed. Not sure if that is what happens next, just an observation from the data.

We’ve had three Bunker Busters in recent history, last week’s, another one fourteen reports back. And a third twenty-two reports back. The Bunker Buster before these recent three was sixty weeks ago.

Here is the current spread:

VI. 12-month Technical Oversold

On Friday, April 22nd Stocklabs signaled hybrid oversold on the 12-month algo. This is a 10-day bullish cycle that runs through Friday, May 5th. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“The height of cultivation runs to simplicity.” – Bruce Lee

Trade simple

Comments »

Third times the charm?

Walked around Anned Arbored yesterday wearing a Stocktwits cap and it sparked a few conversations about the markets. Interesting discord with intelligent youths curious about the state of this leaky old ship.

Ann Arbor on the first warm Saturday in April, after the Friday before featured 35 degree overcast, was a vibe.

Sometimes, when you’re so deeply emerged in a dystopian hellscape like post-industrial Detroit you forget there are people who live on nice hills nearby clean rivers they can swim in whilst academic types develop their intellect at an institution of learning that keeps the barbarians at bay.

I like both settings. I feel like a tomcat with total freedom inside Detroit. In Ann Arbor, I am a student. An observer and sponge.

The whole town is like a giant Abercrombie and Fitch commercial lolz. Homos.

Folks are freaked out. They’ve been averaging into names like Nvidia that they assumed with sound money. I’m telling you—the whole crypto/nft movement really skewed the younger generations idea on risk. They look at individual tickers like they’re t-bills. Set and forget.

Whatever and moving on.

We are bunker buster for the third time in recent history. Either the whole shit house is about to go up in flames or we’ll look back on these days come the FOURTH OF JU-LY and be like, “Look at that obvious move off the lows.”

I plan to average into the great next week. Perhaps earnings will help create better entry points. I normally buy a little before and after earnings, to average my price between the binary moment.

Thus we ought to be hella aware of the fact that some of the greatest investments in the world are set to report earnings next week.

I shall plan my buys accordingly.

Okay for now mfs. Godspeed and trade them well.

Raul Santos, April 24th, 2022

And now the 383rd edition of Strategy Session.


Stocklabs Strategy Session: 04/25/22 – 04/29/22

I. Executive Summary

Raul’s bias score 1.90, STRONG BEAR*. Sellers continue the pressure the tape early in the week. At some point a sharp, excess low forms and the auction reverses higher.

Big Tech earnings on the docket: Microsoft and Alphabet (Google) Tuesday after the bell. Meta (Facebook) Wednesday after the bell. Apple and Amazon Thursday after the bell.

*Bunker Buster triggered, see Section V.

II. RECAP OF THE ACTION

Strength through early Thursday. Heavy selling Thursday morning through Friday to effectively erase the week’s gains.

The last week performance of each major index is shown below:

Rotational Report:

Fifth week of bearish rotations. Slight bullish divergence from Staples.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Bulls took back control of money flows six weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But then three weeks ago sellers negated that control.

Last week’s money flows were again sellers dominated, however a few interesting cyclical industries managed to populate the positive side of the ledger. Transports and Lumber.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Signals sort of lined up for a low to form

We have a bullish 12-month oversold cycle as of Friday and it will run into May.

We also have Bunker Buster. The third in recent history. Either the whole house is about to go up in flames, or this one could mark the low as we head into summer.

I have not actively traded futures this year. I have been rebuilding my emotional confidence and putting my affairs in order. Things have to be immaculate for me to make 30-40 trades in the span of a few hours.

And I just haven’t been there mentally.

Regardless, even if I were day trading, I would not be day trading the upcoming week. The Bunker Buster has been a difficult signal for me to trade historically.

Sometimes it seems like the low is in, then we keep plunging lower.

Other times the low prints Monday morning and I’m sitting there, fighting the tapes up move, shorting, until I finally hit my weekly stop.

Nope.

I have found Bunker Buster weeks are the best time to audit my long-term book and decide which companies I will still be holding stock in ten years from now. Then I add some fresh capital to those names.

Dollar cost averaging into my favorite names and waiting for prevailing conditions to return.

Sticking to the process has kept me in this game for over a decade. This research. Morning reports. Dollar cost averaging when indexmodel goes Bunker Buster.

No sense in changing things now.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Sellers continue the pressure the tape early in the week. At some point a sharp, excess low forms and the auction reverses higher.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Still on the edge

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Transports saw a bit of gains last week. They are still on the edge of range low, but looking a bit stronger than semiconductors. Primary expectation is for range low to hold in the upcoming week.

See below:

Semiconductors look really iffy. They are coming into the week with sellers in the driver’s seat, pressing out of range. This chart is likely to snap back up into range at some point next week. But if it doesn’t the entire secular bull market comes into question.

Ether still looks slightly healthier than the above two contextual charts. Interesting bullish divergence from an extremely volatile risk asset.

V. INDEX MODEL

Bias model is Bunker Buster after three consecutive rose colored sunglasses bearish signals after two consecutive weeks of extreme RCS bullishness.

Bunker Buster calls for an acceleration to the downside that eventually forms a sharp, excess low that holds and can be leaned upon by bulls going forward.

We were Bunker Buster thirteen reports back. This was the second Bunker Buster in recent history, with the previous one being twenty-one reports back. The Bunker Buster before these recent two was fifty-nine weeks ago.

Third time is the charm?

Here is the current spread:

VI. 12-month Technical Oversold

On Friday, April 22nd Stocklabs signaled hybrid oversold on the 12-month algo. This is a 10-day bullish cycle that runs through Friday, May 5th.

VII. QUOTE OF THE WEEK:

“If I am not for myself who will be for me? If I am only for myself, who am I?” – Hillel

Trade simple, don’t be selfish

Comments »

Model pinned bearish // how low can we go?

Signals are all jumbled up heading into next week. I am not feeling inclined to take on risk in either direction.

Long-term book will remain untouched. Our Dear Leader Elon will keep fighting the good fight on our behalf, for better-or-worse.

I need to turn my data back on. Story of 2022. But I’ve been taking stock of my emotional state and just haven’t felt mentally prepared to step back in the arena. I’m like Cougar or something. I’m on week six of weight training after abandoning my muscles at the start of the pandemic. Those first few weeks activating major muscle groups releases tons of hormones and turns me into an animal.

Things are starting to stabilize.

I know better than to practice my craft when my minds off. Blown up way too many accounts that way. I’m old now. Grey whiskers began to form on my left cheek this month. There is no need to accelerate that transition via shoddy impulse control in the futures arena.

Not sure why. But I cannot seem to focus. Perhaps I’ve been in the fish tank way too long and the water is so cloudy but I don’t even know it.

Charts looks bearish. Semiconductors and transports are both lingering on range low for longer than any permabull ought to feel comfortable about.

Crypto charts look somewhat more bullish.

Stocklabs is bullish.

Sometimes when the charts look their most bleak, you just have to grab your sledge hammer and mash some buy orders in. Swings often look so obvious after-the-fact.

Wish I had my heckin’ market profile charts. Fuck.

Happy Easter.

Raul Santos, April 17th 2022

And now the 382nd edition of Strategy Session.


Stocklabs Strategy Session: 04/18/22 – 04/22/22

I. Executive Summary

Raul’s bias score 2.98, neutral*. Sellers put pressure on the tape through Wednesday. Then look for earnings out of Tesla (Wednesday, after-market-close) to either accelerate the selling or pivot price higher.

*Rose Colored Sunglasses [RCS] bearish bias triggered, see Section V.

II. RECAP OF THE ACTION

Downward pressure into Monday morning and throughout Monday. Then choppy for the rest of the week with the NASDAQ probing its lows into the end of the short week while Dow and Russell showed some divergent strength.

The last week performance of each major index is shown below:

Rotational Report:

Fourth week of bearish rotations. Material and Energy positive along with Staples.

bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Bulls took back control of money flows five weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But then two weeks ago sellers negated that control.

Last week’s rotations were more balanced, but slightly skewed negatively.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Signals once again crossed

Indexmodel is bearish heading into the second-to-last week of April. Stocklabs is halfway through a bullish cycle that runs through to end-of-day Monday, April 25th. The S&P 500 is down -3% on the month and the NASDAQ is down -6.6%, not adhering to past bullish seasonality statistics.

Do we snap back higher into month-end or does the selling continue. With the statistics all jumbled up like this, I feel no urgency to take risk in either direction.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Sellers put pressure on the tape through Wednesday. Then look for earnings out of Tesla (Wednesday, after-market-close) to either accelerate the selling or pivot price higher.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Right on the edge

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Transports are at risk of losing intermediate-term range. The way price is lingering on the lower bracket increases the likelihood of a probe lower.

See below:

Semiconductors same story, lingering on the low, could break down.

Ether looks less bearish than the other two charts. Had a big rotation higher and is still sort of retracing the move. Could be in discovery up or balance but certainly not discovery down. Yet.

V. INDEX MODEL

Bias model is rose colored sunglasses bearish for a third consecutive week after two consecutive weeks of extreme RCS bullishness. This is a bearish signal that expects sellers to control the tape for much of the week.

We were Bunker Buster twelve reports back. This is the second Bunker Buster in recent history, with the previous one being twenty reports back. The Bunker Buster before these recent two was fifty-eight weeks ago.

Rose Colored Sunglasses calls sellers to pressure the tape lower throughout much of the week.

Here is the current spread:

VI. 12-month Technical Oversold

On Friday, April 15th Stocklabs signaled technical oversold on the 12-month algo. This is a 10-day bullish cycle that runs through Monday, April 25th. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“It is not enough to have great qualities; we should also have the management of them.” – La Rouchefoucauld

Trade simple, reign in your impulses

Comments »

Model still wants lower

Not sure what to say. I’ve been having a heck of a time keeping my impulses in check. There are bunnies everywhere and pregnant mommas looking all delicious. I need to focus.

Last week I flipped bullish too soon and took some heat.

Elon joining the board at Twitter is good news for humanity. The top dog at New York Times telling his wordcels to limit their Twitter use is like kicking the tide. Won’t change a thing.

The days of centralized information are iffy. As are fiat currencies. As is life, if I may be so boldt.

But there is hope. There are giant giga factories pumping out fancy cars everyone wants.

There are signs of life from the frozen soils up here in the murder mitten.

It looks like we might just make it.

But first we have to wade through bank earnings next week.

Then comes the big miracle and who knows, maybe the goblins will go back in their caves and the futurists will regain control.

It seems like we’re right on the brink of busting through the fear and uncertainty.

Don’t fight the fed. Sure. But there are fine equities out there that anyone with a decent grasp of what is to come will want to own.

GOOGLE. TESLA. TWITTER. And so on.

Bearish into Monday. Then CPI. Then we don’t know.

Okay for now,

Raul Santos, April 10th 2022

And now the 381st edition of Strategy Session. Enjoy.


Stocklabs Strategy Session: 04/11/22 – 04/15/22

I. Executive Summary

Raul’s bias score 2.93, neutral*. Sellers continue to pressure the tape lower Monday. Then watch for CPI data out Tuesday morning to either accelerate the selling or reverse the tape higher. Thursday morning several major banks along with Taiwan semiconductors are set to report earnings and could increase volatility.

U.S. markets are closed Friday in observation of Good Friday.

*Rose Colored Sunglasses [RCS] bearish bias triggered, see Section V.

II. RECAP OF THE ACTION

Rally Monday. Erased Tuesday. Strong continuation selling Wednesday followed by chop into the weekend. Tech-heavy NASDAQ divergent weakness into the weekly close.

The last week performance of each major index is shown below:

Rotational Report:

Third consecutive week of bleak rotations. Utilities and Staples strong suggests investors remain risk averse. Energy and Healthcare did okay.

After three weeks in a row of bearish rotations one begins to wonder if a strong set of rotations is lurking on the horizon.

slightly bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Bulls took back control of money flows four weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

But last week sellers negated that control. Bulls need to produce something major in the holiday-shortened week, otherwise this indicator is back to being bearish.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Pressing any bets in this market is risky

While most signals point bearish heading into next week. Bears have already covered decent ground. Markets do not seem to be rewarding pressing bets in either direction.  With lots of economic data and earnings on the slate for next week, and the upcoming holiday, while indicators are pinned bearish I am hesitant to press shorts much longer. Perhaps through Monday afternoon at most.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Sellers continue to pressure the tape lower Monday. Then watch for CPI data out Tuesday morning to either accelerate the selling or reverse the tape higher. Thursday morning several major banks along with Taiwan semiconductors are set to report earnings and could increase volatility.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Transports on the verge of breakdown

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Transports appear to be down below their well-established range. Often times just when these balances seem poised to break, price snaps back in the other direction. It is a challenging spot to have much conviction. However, the behavior of this contextual chart ought to give us some clarity on what we see next week in the major indices.

See below:

Semiconductors lost the pivot and accelerated lower, but still appear to be in balance.

Ether still appears to be in a small discovery up phase within a higher time frame balance.

V. INDEX MODEL

Bias model is rose colored sunglasses bearish for a second consecutive week after two consecutive weeks of extreme RCS bullishness. This is a bearish signal that expects sellers to control the tape for much of the week.

We were Bunker Buster eleven reports back. This is the second Bunker Buster in recent history, with the previous one being nineteen reports back. The Bunker Buster before these recent two was fifty-seven weeks ago.

Rose Colored Sunglasses calls sellers to pressure the tape lower throughout much of the week.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“You can’t really be strong until you see a funny side to things.” – Ken Kesey

Trade simple, enjoy the process

Comments »

Cautiously bearish

Righty-o lads I hate to issue some fud but the model is the model and it is bearish heading into the first full week of Q2.

If I had my tools I would be using this signal to sell short any up gaps in range, with the explicit intent of closing said gaps. In the /nq.

On the tool front I have a good lead on some raw data. I had to screen a call from a decent chap who phoned me to get me set up because I was in the middle of a heated negotiation for a work van.

Work van fell through. Feller wanted 1800 (about 0.50 eth). I spent the morning collecting some debts owed to my person and then I picked up a refurbished battery from the local battery mart for 60 and then I commissioned elder Raul to drive me to the land of the libs, ANNED ARBOR.

We show up. Mf has like 800 chickens. Not going to lie I was impressed. Beautiful cocks everywhere.

The vans a real pile of shit. Windshield had been letting water in all winter and the rugs were soaked. The whole thing smelt like grease. There was debris everywhere. Fine. I am a draconian cleaner and you wouldn’t believe the messes I’ve fixed.

I’m the fixer. The wolf.

Popped the hood. The rubber shoe between the air filter and the motor is tattered and in pieces, thus allowing the devil knows what to be sucked into the motor.

Fine. This piece of shit just needs to last long enough for elon to deliver me from evil via the CyberTruck.

Put the battery in. Starts right up. I say, “Right then. We have some unexpected things happening here. Would you take 1300?” We do the old back-and-forth, settle at 1400.

I hand him the cash. He hands me the title. I put the pile in reverse and good lord, an unholy sound comes from the rear end. Turns out one of the tires is totally seized up. Won’t spin. I renege. Say farewell to the chickens and sell him the battery for cost.

Then elder Raul and I fight dense traffic for over an hour back to DETROIT, bitching and joking the whole hecking time.

European men (and perhaps women) like elder Raul will never be content with the american driver. They misuse the fast lane. They’re general sense of urgency is too low. They cannot seem to do anything right. Which is why I drive and he sits, because if that wild old man is behind the driver’s seat you’re a captive audience for some rage.

Wow, what an aside.

Okay so anyhow model is bearish. Barring some hasty trip into the woods I should have my tools back in place next week, and what else? That’s about it I suppose. The vibe around the city is impeccable lately. Beautiful birds are coming out of the wood work, ready to disco dance and mate.

Raul Santos, April 3rd 2022

And now for the 381st strategy session, enjoy.


Stocklabs Strategy Session: 04/04/22 – 04/08/22

I. Executive Summary

Raul’s bias score 3.20, neutral*. Sellers reassert control early on. Then look for third reaction to Wednesday afternoon’s Fed Minutes to dictate direction into the second half of the week.

*Rose Colored Sunglasses [RCS] bearish bias triggered, see Section V.

II. RECAP OF THE ACTION

Strong tape through Tuesday, then faded lower clean through the Friday lunch hour. Then a strong ramp higher into the weekend.

The last week performance of each major index is shown below:

Rotational Report:

Second consecutive week of bleak rotations. Utilities and Staples strong suggests investors remain risk averse despite the recent rallies off the lows. Financials under pressure.

slightly bearish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Bulls took back control of money flows three weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

Last week’s flows skewed slightly negative after being balanced two weeks back. Lots of semiconductor groups populating the negative side of the ledger.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

April stats and recent changes in hybrid scores have me reluctantly bearish next week

The April seasonality statistics are strong. And on March 29th we saw a huge print from the Hybrid Chg % (+22.28% **see Algo page**). These two data points cannot be completely overlooked.

However, Indexmodel is signaling Rose Colored Sunglasses and we do not have an Stocklabs cycles in play heading into the week.

For these reasons I will be leaning bearish until at least the Fed Minutes Wednesday afternoon. Then I will reassess.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Sellers reassert control early on. Then look for third reaction to Wednesday afternoon’s Fed Minutes to dictate direction into the second half of the week.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Big battle for control of Transports

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Transports probed the upper end of range and found strong sellers. Sellers so strong they erased much of the conviction buy candle we printed on 3/16. There was a slight lower wick on the strong Friday sell candle, but that is not much for bulls to lean on. This key contextual index could careen into the low-end of balance and perhaps then we’ll see if range can hold.

See below:

Semiconductors didn’t manage to hold the top-side of their range pivot for long. Sellers reclaimed the level Friday. Again, there was a nice lower wick on the Friday candle that bulls may lean on. This index is clearly in range.

Ether is having a modest discovery up phase. I am not certain if it has the velocity to really begin exploring higher prices, but there is a low-volume-node around 3,680 that could behave as a magnet to draw price higher next week.

V. INDEX MODEL

Bias model is rose colored sunglasses bearish after two consecutive weeks of extreme RCS. This is a bearish signal that expects sellers to control the tape for much of the week.

We were Bunker Buster ten reports back. This is the second Bunker Buster in recent history, with the previous one being eighteen reports back. The Bunker Buster before these recent two was fifty-six weeks ago.

Rose Colored Sunglasses calls sellers to pressure the tape lower throughout much of the week.

Here is the current spread:

VI. 6-month Technical Overbought

On Thursday, March 17th Stocklabs went technical overbought on the 3- and 6-month algo. This is a ten day bullish cycle that runs through Thursday, March 31st. Here is the final performance of each major index over the cycle:

VII. QUOTE OF THE WEEK:

“It is not enough to have great qualities; we should also have the management of them.” – La Rochefoucauld

Trade simple, manage yourself or else

Comments »

Keep swinging fam

Research updated. Conditions look decent for volatility to keep drifting away.

What else, what else.

Oh I held a meet-up last week on behalf of Stocktwits. They keep sending me boxes of hats and t-shirts and they’re paying for the pizza and hootch. Alls I have to do is find a venue and do a little ditty on meetup.com and bingo bango — I’ve satisfied their demands.

I was just baffled by a few of the jokers at the meetup. So hecking bearish. I cannot help but fade people when they’re so certain of themselves.

Like my idol Elon, who makes all sorts of wild predictions, speaks with way less certanty than some piker pushing five-figure trades on Robin Hood.

Fading these fools at every chance.

Aside from the free hootch that is why I’ll organize these meet-ups. It is a wonderful litmus test. Another reading for my contextual model.

What else.

Last week was my first full week back in the gym training. Felt good man. My core was stronger than I expected. Perhaps the wretched floor project kept me abs tighter than I realized. My weakest quadrant has been identified (lower right, likely the arthritis building up from all the digging). My weakest muscle group, by far, were the chest and triceps. Those aren’t really vanity muscles, but for whatever reason they don’t see much use in a normal man’s working day.

I mean, some desk jokey is probably just weak everywhere, but as a man of work it seems my back and legs stay jacked but my chest and triceps take a hit. I should be back to an absolute terror of build in six weeks time. Just in time to go back to the fields.

What else…

I am very close to turning my data and tools back on. I have a bit of side work to attend to next week but I should be back to daily trading sometime this month.

What else?

Seasonality is strong heading into April. My primary expectation is for some window dressing into quarter end and then perhaps a real ripper of a rally Friday, the first of the month.

That’s all I’ve got for now.

Oh one more thing. I am reading the new Dalio book, Principles for Dealing with the Changing World Order.
Decent read so far. He essentially takes tons of factors and ranks them from 1-to-ten. Sound familiar?

I’ll leave it at that for now.

Raul Santos, March 27th, 2022

And now the 379th edition of Strategy Session.


Stocklabs Strategy Session: 03/28/22 – 04/01/22

I. Executive Summary

Raul’s bias score 3.48, medium bull*. Volatility continues to abate as equity prices drift into month-end. GDP data out Wednesday morning and non-farm payroll data Friday may provide some direction.

*extreme Rose Colored Sunglasses (e[RCS]) triggered, see Section V.

II. RECAP OF THE ACTION

Steady drift higher in the tech-heavy NASDAQ while the other indices essentially marked time.

The last week performance of each major index is shown below:

Rotational Report:

Rotations last week were not great. The leadership in Materials and Utilities suggests investors remained risk averse despite the dip in volatility seen last week. Tech was not too far behind though. Energy continues to trade independent of the overall market.

neutral

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Bulls took back control of money flows two weeks back after sixteen weeks dominated by sellers, dating back to mid-November.

Last week’s money flows were fairly balanced. However the industries populating the positive side of the ledger are hardly quality.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

April is statistically the most bullish month of the year

Investors were granted a bit of relief the in the last two weeks. Now we are headed into the final week in March (first quarter) and up ahead we have solid seasonality statistics. Past performance is not indicative of future results, but a glance at SPY seasonality shows an average return of +2.40% with markets higher on the month 79.31% of the time.

If buyers manage to hold the tape up through Wednesday’s GDP reading, we could set the stage for a strong rally Friday morning into the next quarter. We may even see some “window dressing” take place ahead of Friday.

Non-farm payrolls are sort of like the river card on the week, and could either solidify a bullish week or be the catalyst for a reversal lower.

We don’t know.

But stats are looking bullish.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Volatility continues to abate as equity prices drift into month-end. GDP data out Wednesday morning and non-farm payroll data Friday may provide some direction.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Pivoting the range in semiconductors

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Transports appear poised to continue probing the upper-end of their established range.

See below:

Semiconductors wrestled with the range pivot we’ve been monitoring. During the last three days of last week there was quite the battle for this territory. The upper wick on Wednesday’s daily candle and lower wick on Friday’s reveal this. Heading into next week it appears buyers have the edge.

Ether surprised us last week, breaking free from its range compression and going into discovery up. There is a potential new range a bit higher as well as a low-volume node that may behave as a magnet.

V. INDEX MODEL

Bias model is extreme rose colored sunglasses for the second consecutive week. The e(RCS) seen two weeks back being the first such reading of 2022.

We were Bunker Buster nine reports back. This is the second Bunker Buster in recent history, with the previous one being seventeen reports back. The Bunker Buster before these recent two was fifty-five weeks ago.

Extreme Rose Colored Sunglasses calls for a calm drift, perhaps with a slight upward bias next week.

Here is the current spread:

VI. 3-month Hybrid Oversold

On Friday, March 11th Stocklabs went hybrid oversold on the 3-month algo. This is a ten day bullish cycle that runs through Friday, March 25th, end-of-day. Here is the final performance of each major index over the cycle:

VII. 6-month Technical Overbought

On Thursday, March 17th Stocklabs went technical overbought on the 3- and 6-month algo. This is a ten day bullish cycle that runs through Thursday, March 31st. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“One of the symptoms of approaching nervous breakdown is the belief that one’s work is terribly important.” – Bertrand Russell

 

Comments »

Swing away

Honest Job here. Still being put through the ringer. But at least we stuck to our guns last week.

Funny how much less dicey the dip looks once we’re off the lows…

I do not have much to say. My enemies are many and they want to see me suffer. That simply cannot be.

This afternoon I will march du Nain Rouge, to pay homage to the devilish little dwarf that hides in the trees of Detroit, warning of disaster and fending off outsiders.

Markets sent the potential all-clear signal for the first time since this route began back in November. You’ll see what I mean if you read this week’s strategy session.

Let Stocklabs be thine guide, Indexmodel thine compass, and morning trading reports thine map.

I will be back to morning trading reports real soon. Just you wait.

Then just sort of make your way through the worldt. No one’s master. No one’s slave.

Model calls for a drift along last week’s highs. It may be choppy at times, but primary expectation is for us to be flat/higher by end-of-week.

Swing away lads.

I like the idea of taking an earnings gamboll on ADBE (reports Tuesday, after the bell).

Okay for now.

Raul Santos, March 20th, 2022

And now for the 379th edition of Strategy Session.


Stocklabs Strategy Session: 03/21/22 – 03/25/22

I. Executive Summary

Raul’s bias score 3.93, medium bull*. Volatility melts away as markets hold onto last week’s highs in a sort of sideways drift.

*extreme Rose Colored Sunglasses (e[RCS]) triggered, see Section V.

II. RECAP OF THE ACTION

Hard selling through Monday, putting equities on the lows to start the week. Strong rally all through Tuesday erases Monday’s losses. Gap up Wednesday, which eventually faded ahead of the Fed. Fed hiked 25bps Wednesday afternoon and third reaction was up. Strong sustained rally through the rest of the week.

The last week performance of each major index is shown below:

Rotational Report:

Rotations were strongly bullish after three consecutive weeks of clear bearishness. Tech and Discretionary out in front, just exactly what bulls want to see.

bullish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

After sixteen weeks of money flows being dominated by sellers, with a few mild bull flows peppered in, last week finally printed a strong buy flow. The action last week could effectively overpower the strong selling flows we’ve been seeing since late November 2021.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

That Monday Fake-out Was One for the books

Read back to last week’s Section III. The conditions were right for a dramatic move early in the week to be a ‘fake’ move. Not fake as in not actually occurring but unlikely to carry through the entire week.

That hard sell Monday was bleak. It was plunging into the lows across the board. Musk was challenging Putin to single combat. Rate hikes were on the horizon.

Set all of that aside. The calendar was on a quad witching. Stocklabs was hybrid oversold. IndexModel was neutral. These cold, dead facts, things our logic centers can lean on when the world at large seems a mess, were saying, “watch for a fake-out”.

That is why we do these boring reports every Sunday, and another report every morning if we’re actively day trading. The repetition and routines are all designed to keep us aligned with what we can control, our execution.

We cannot control the markets. Geopolitics, or even message boards (unless we pander to the crowd).

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Volatility melts away as markets hold onto last week’s highs in a sort of sideways drift.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Pressing range highs

Markets fluctuate between two states—balance and discovery. Discovery is an explosive directional move and can last for months. In theory, the longer the compression leading up to a break in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum. Readers are encouraged to apply these techniques to all markets.

Funny how much more clear a range looks once we move away from the edge. Now Transports has a bit more room of upside but are clearly still in range.

See below:

Semiconductors are nearing the pivot zone of their range. It will be interesting to monitor this key index as we head into next week. Range is the call for now, with potential to run higher.

Ether is also in range, but near the top-end. The primary expectation is for range to hold and continue to coil by rotating lower. There is also the less likely potential for a discovery phase higher.

V. INDEX MODEL

Bias model is extreme rose colored sunglasses for the first time in 2022 after being neutral last week and ose Colored Sunglasses bearish two weeks back. The model was neutral for three weeks prior to that bearish signal. We were Bunker Buster eight reports back. This is the second Bunker Buster in recent history, with the previous one being sixteen reports back. The Bunker Buster before these recent two was fifty four weeks ago.

Model calls for a  calm drift, perhaps with a slight upward bias next week.

Here is the current spread:

VI. 3-month Hybrid Oversold

On Friday, March 11th Stocklabs went hybrid oversold on the 3-month algo. This is a ten day bullish cycle that runs through Friday, March 25th, end-of-day. Here is the performance of each major index so far:

VII. 6-month Technical Overbought

On Thursday, March 17th Stocklabs went technical overbought on the 3- and 6-month algo. This is a ten day bullish cycle that runs through Thursday, March 31st. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“The best plan is only good intentions unless it degenerates into work.” – Peter Drucker

Trade simple, WORK

Comments »