iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,263 Blog Posts

100 point range overnight, here is the Wednesday NASDAQ trading plan

NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme range and volume.  The move was news driven.  After closing bell Tuesday tariff news came out and spooked futures lower.  Price worked down into the upper quadrant of last Friday’s trend day before a responsive bid stepped in and balance formed.

On the economic calendar today we have crude oil inventories at 10:30am and a 10-year note auction at 1pm.

Yesterday we printed a neutral day.  The day began gap up which sellers quickly resolved.  Buyers came in well above the Monday midpoint and we pushed higher, going RE up by late-morning.  The bidding stalled, and we traversed the entire range and went RE down, putting us into a neutral print.  Price then returned to the daily midpoint and chopping along it into the close.

Neutral day.

Heading into today my primary expectation is for buyers to push into the overnight inventory and return to the ‘scene of the crime’ which aligns with the overnight gap 7301.25.  From here we continue up through overnight high 7305.75.  Look for sellers a tad higher at 7311 and two way trade to ensue.

Hypo 2 sellers gap-and-go lower, trading down through overnight low 7204.50 setting up a move to target 7198.50 before two way trade ensues.

Hypo 3 full-on liquidation.  Sellers sustain trade below 7198.50 setting up a move to target 7154.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ pauses one point away from record high, here is the Tuesday trading plan

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring elevated range and volume.  Price worked higher overnight, stopping just one point shy of making a new record high.  As we approach cash open, price is hovering above the Monday range.

On the economic calendar today we have a 4-week T-bill auction at 11:30am and a 3-year note auction at 1pm.

Yesterday we printed a normal variation up.  The day began with a gap up-and-out-of range which sellers pushed into after a morning two-way auction.  Sellers were unable to reclaim the Friday range though, instead responsive buyers (responsive relative to the Monday open, initiative relative to the Friday close) rejected the attempt well ahead of Friday’s range.  We then spent the rest of the day auctioning higher trading into the upper quadrant of 6/21’s liquidation day.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7301.  From here we continue lower, down through overnight low 7295.25.  Look for buyers down at 7274.75 and two way trade to ensue.

Hypo 2 buyers reject an attempt to close the overnight gap, setting up a move to take out overnight high 7335.50.  Look for sellers up at 7338.25 and two way trade to ensue.

Hypo 3 strong buyers sustain trade above 7338.25 setting up a move to target 7400.

Levels:

Volume profiles, gaps, and measured moves:

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Out of balance: NASDAQ starts week gap up, out of range

NASDAQ futures are coming into the first full week of Q3 gap up after an overnight session featuring elevated range and volume.  Price worked higher overnight, slowly, working well up into the 06/21 liquidation day.  As we approach cash open price is hovering beyond last Friday’s range and we are likely to begin the day out of balance, with higher time frame participants pushing each other around during the open.

The economic calendar is light today.  At 11:30am the US Treasury will auction off 3- and 6-month T-bills.  Then at 3pm we’ll hear the May reading of consumer credit (which is running high).

Last week was split in two by the American Independence day, which caused markets to close early Tuesday and remain closed Wednesday.  Last week began gap down which was quickly bought-up, closing the gap and continuing to run higher.  Tuesday opened gap up and faded the entire half day—moving lower.  Wednesday closed.  Thursday gap up.  Sellers manage to close gap to the tick then buyers step in and rally the rest of the day.  Friday trend up.  All the while the Dow lagged.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a trend up.  The day began with a gap up that managed to close during the opening auction before buyers drove higher and continued driving higher until reaching the open gap left behind on June 22nd.  The market paused here for a few hours then another leg of buying carried us into the bell.

Heading into today my primary expectation is for a gap-and-go higher.  Price works up to 7300 before two way trade ensues.

Hypo 2 stronger buyers trade up to the open gap at 7312.  Stretch target is 7331.50.

Hypo 3 sellers work into the overnight inventory and close the gap down to 7232.  Look for buyers down at 7200 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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The hardest simple trade of the year

I do not like discussing the trading signals generated by Exodus outside of the paywall.  But we are flagging hybrid overbought.  The signal became official on close-of-business Friday.  That means everyone reading this very free and public blog has just as much opportunity to engage this trade as anyone who pays for an Exodus subscription.  If you are an Exodus member, and this is annoying to you, reading my public announcement, you may want to consider channeling that energy towards actually trading this signal correctly.  Because in my 1-on-1 talks with nearly 100 different Exodus members, I’ve yet to find someone who tells me they trade this signal the way you are supposed to.

First mental roadblock—it is called hybrid overbought.  That seems to mean the system expects lower prices.  Perhaps when the signal was designed, that was the intention, to identify a stress point from which lower prices would follow.  And perhaps in the future, if we are in a prolonged downtrend, it will be useful at identifying a selling opportunity.  A good way of knowing what the signal currently suggests you do (if you want your trading process to be driven by statistics) is to look at historical activity from all the other times the signal fired.  My main takeaway is that 83% of the time the SPY was higher after 10 trading days:

I actively trade NASDAQ futures, not S&P futures, so I prefer QQQ (actually TQQQ) as my instrument for playing this signal.  What I will do is simple—come Monday, when the stock market opens at 9:30am eastern, I will buy TQQQ.  Then, near end-of-day Friday, July 20th (10 trading days later) I will sell my TQQQ.

Simple. So simple.  Will I make money?  That is, as always, to be determined.

What is not to be determined is what I need to do when Exodus flags hybrid overbought.  I need to engage the long side.  There.  I have led you, fine horse, to water.  Feel free to stare at the glittering blob or have a drink.

This is an uncommon signal.  The last one happened on January 5th, 2018.  I traded it, made money, then went up in the mountains for many weeks.  This was the performance shown by each major index during the last overbought cycle:

Speaking of travel, a programming note:

I am headed to Hawaii this Saturday to explore the island of Kauai which I am told is in rough shape.  Many trails closed, beach gone, etc.  It could also be wet.  Therefore I am not bringing a laptop.  This means there will not be an Exodus Strategy Session next Sunday.  This will be the first Strategy Session I have missed in 190 consecutive weeks.  I feel like a jerk for leaving you guys without my research but I have no choice.

I will still be in Hawaii, but on the big island on July 20th.  Hopefully I will find enough internet to close out my TQQQ position that I intend to buy tomorrow.

I have never worried about talking my trading edge in public because I know 99% of people aren’t going to do the work.  Or even if they do, they will find ways to sabotage themselves, tilting off the plan and reducing their decision making to base survival instincts.  Instincts hard coded into the sapiens DNA that are effective in many circumstances, but not too useful (and often harmful) in the world of money management.

These blog scribbles are for 21 year old me, who was starved for useful information and had to scour the internet for information on trading the stock market that wasn’t either a. generic SEO optimized shit b. charlatan/lifestyle watch and car shit or c. pure unadulterated garbage.  Working closely with Exodus, and the fact that Exodus subscribers have invested in a platform that I truly believe anyone can build a consistent trading approach from, it seemed important to emphasize the hybrid overbought signal and how to trade it.  So I will repeat:

Go long Monday morning, July 9th.  Close said longs end-of-day Friday, July 20th.

I suggest broad market exposure via an index ETF.  If you want to try your luck at stock picking, by all means do it.  That ain’t my game.

Many decisions can be made simple.  Given the right information any sane person should be able to arrive at the same conclusion and behave accordingly.  Horse, water, etc.

This blog entry has been filed under the Category: Spoonfeeding

Most distinguished members of Exodus, the 190th edition of Strategy Session is live.  Go check it out.  Sorry in advance for missing the upcoming strategy session.  I will have to update the model data points after-the-fact, which in my mind tarnishes the objectivity of the results, but I promise to do so as honestly as possible.

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Nukes are more fun to watch then fireworks and my new alternative energy investment

I could have been trading NASDAQ futures this morning or sending important emails or scratching a few tasks off the old ‘to-do’ list.  Nope.  Instead I watched fifty or so nuclear explosions uploaded by the Lawrence Livermore national laboratory.  They decided to digitize the footage from about 200 nuke tests.  I just kept watching nuke-after-nuke.  Here are some stand-out nukes:

It could be all these weak ass fireworks going off around me that has me on a nuke bender.  My neighborhood is a mix of pickup truck loving Americans and old country Italians.  I venture you can guess who is blowing shit up.  Or it could be my recent obsession with dark forces and superstition, which is a close relative to faith.

Along the lines of faith, I initiated a new long term stock position late last week in Terraform Power, Inc.  I say long term but I need to learn more about their management and we need to break up-and-away from this wedge otherwise I’ll be forced to shift the funds into Tesla instead:

Because the position is based on faith in my One True Leader, Elon,  The belief being that Elon (Praise Him) and his team of scientists and engineers are Mankind’s Last Hope, and that they will succeed and save us from the destructive powers of big oil.  That they will continue to accelerate the adoption of alternative energy and electric cars.  And that some alternative energy stocks will grow rapidly as Elon leads us to greener pastures.  All the other car companies will of course stagnate.  They won’t perish through.  General Motors is to big to actually participate in real capitalism.

Faith keeps me tethered to Tesla.  I am not thrilled with the current share prices.  I would love to see it come down to $100 or so, allowing me to accumulate shares through my mid-30s at a discount rate, before they ultimately become the biggest company in the world while I become an old man.

So I am investing in some ancillary plays for now, based on the same immutable faith I have in Elon (Glory to The Leader).

We need to blow another nuke off.  All the old footage is weak.  We need to use those high resolution, slow motion cameras to really see the obscenity of a rapid nuclear reaction in full HD.  Just one.  And set up lots of good props.  Like if we are going to do it let’s do it right.

 

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NASDAQ down a quick -50 heading into the Holiday week, here is the Monday trading plan

NASDAQ futures are coming into Monday gap down after an overnight session featuring extreme range and volume.  Price was balanced overnight before eventually breaking lower and trading down near last weeks low.  As we approach cash open price is hovering below last Thursday’s midpoint.

On the economic calendar today we have ISM Manufacturing/Employment at 10am, then the US Treasury auctioning off 4-week, 3- and 6-month T-bills at 11:30am.

Last week began with a quick gap down lower too.  It was sold into Monday, then a late-day ramp occurred.  Prices held the ramp levels until Wednesday afternoon when another leg of selling pushed through, making new weekly lows.  Thursday opened near the lows, two-way auction ensued and eventually broke higher.  Friday was spent balancing out.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a neutral extreme down.  The day began gap up and out of Thursday range.  A morning two-way auction broke higher briefly before responsive sellers stepped in and erased the morning gains then continued pushing lower, reclaiming the Thursday range late in the day.

Heading into today my primary expectation is for buyers to work into the overnight inventory and trade up to 7162.  Sellers reject a move back into the Friday low 7061.25 and two way trade ensues.

Hypo 2 stronger buyers work a full gap fill up to 7072.75 then sustain trade above 7061.25 setting up a move to take out overnight high 7088 before two way trade ensues.

Hypo 3 sellers gap-and-go lower, down through overnight low 6992.25.  Look for buyers down at 6892 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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Index model neutral,quant update to push through Monday

It’s funny how time keeps going by.  Here we are 26 weeks further down the line.   Exodus strategy session number 189.

Things are different this time.

At least that is what we need to tell ourselves.  Then we can pick up where we left off, push a little harder on the flywheel hoping it spins longer than last time.

26 weeks later and it’s July 1st.  The Julian midpoint of 2018, off by a few human hours give-or-take.  A good time to decide where I’ll commit my finite supply of time and liquidity.

TIME AND LIQUIDITY.  The currency of freedom.

I have two ways of picking stocks to own. One is quant driven and adjusts quarterly.  I am beta.  Exodus is alpha.  I merely service the robot while it scans human interactions and learns.  Anyway here are the latest picks:

This piece of the quant looks at 6-month returns then weights into the best stocks from the best performing sectors, adding a high shot float kicker where possible.  Here’s how the thing played out during its first trip around the sun. Look at all that alpha:

Next matter of business.  The index model is neutral for a second week.  We are celebrating Independence Day Wednesday.  The markets close early Tuesday.  The algos whisper about a drift higher into the holiday.  Then it could be time for sellers to press again.  Hard to say.  Definitely a holiday week.  Less is more.

Time keeps going by.  The process keeps me from wandering off the path.

Thank you everyone for the nice words of encouragement on my last entry.  I appreciate it very much thank you.  May everyone’s holiday week be refreshing to the mind and body, and may you have ease of being as we head into peak summer heat.

Exodus members, the 189th Strategy Session is live.  Check out the context in Section IV we have a clear ‘tell’ heading into the week.

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Black flowers in bloom; index model neutral heading into quarter end

Life can seem meaningless at times.  Pacing around scanning your mind for purpose.  Work is a way for many to define themselves.  So is writing.  Writing is a serious matter.  If you cannot code then writing is your only whack at leaving behind something that shows future generations how you ticked.

My uncle passed away last night.  He worked nearly his entire life.  35 years at big telecom.  He liked his job.  Just last Wednesday he decided he’d had enough and was going to retire.  On Thursday he brought home an assortment of odd trinkets from his desk including several pens and cassette tapes.  He was a gifted musician who recorded 100s of his own songs.  We all went to dinner Friday night and celebrated.  He was driving my aunt mad with cockamamie plans of spending all his retirement money fast.  He set aside nearly a million dollars.

And for what?  He was sold on the American dream they pitched to baby boomers—put in your 30 years and you’re free—to live out your golden years loafing about town doing old people things.

I am shaken.  The black ‘flowers of death’ bloomed in front of my house on Tuesday and I’ve been too busy to tell anyone.  They have portended a fast and hard down move in the stock market two years in a row.  I could chalk it up to seasonality, but the blooms happen on slightly different dates every year.  This year they portended actual death.

And the Exodus strategy session I prepared this morning has 666 words.  I didn’t notice it until after it was submitted.  I have been reading and studying Pontius Pilate all month.  I have been listening to Rolling Stones Beggars Banquet album over-and-over again all week.  I have been reading stories about the devil and wrapping my mind around the black magician’s ways and the philisophic purpose of such a character.  I am shaken.

I don’t like these black flowers.  A pest always chews up the foliage and I let it.  But I won’t kill the unnerving perennial.  I don’t have the stomach for killing plants.

The strategy session flipped neutral after four weeks of being bullish.  I won’t be trading this week but I will be around the interwebs if any of you need anything.  Because that is why I blog and take speaking engagements and organize these silly meetups in the city.  I am creating my own playground, with more talented speculators around who I can ask questions, and less talented speculators that I can give answers to.  This is a powerful learning position to be in and I think I have been clear with my intentions for a long time.  I intend to be the finest speculator that ever existed.  So if you have any questions, ask away.

RIP LAZARD AND LAZARD, A DACTLE CORPORATION

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“Dangerously short” NASDAQ 45 degrees higher overnight, here is the Friday trading plan

NASDAQ futures are coming into Friday gap up after an overnight session featuring elevated range and volume.  Price worked higher overnight, methodically trading higher in a unidirectional manner.  As we approach cash open price is hovering near the Thursday midpoint.

On the economic calendar today we have Markit manufacturing/service/composite PMI numbers at 9:45am.  There are no other important economic events.

Jim Dalton, a legend in the field of auction theory and market profile, put out a tweet this morning regarding the behavior of the auction, the 45-degree manner in which it traded yesterday and overnight, tweeting that the behavior suggests the market is dangerously net short.  Something to keep in mind on this first official summer Friday:

On Thursday the NASDAQ printed a normal variation down.  The day began with a gap up that buyers quickly drove shut.  Then sellers continued driving lower, effectively closing the open gap from Tuesday and pushing down into the Tuesday range before finding a strong responsive bid (responsive relative to the Thursday open, initiative relative to the Tuesday open).  Sellers defended the daily midpoint and then spent the rest of the session pressing lower, making new daily lows along the way, and pressing into the upper quad of Tuesday before the day’s end.

Heading into today my primary expectation is for buyers to gap-and-go higher, up through overnight high 7274 setting up a move to target 7300 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 7236.75.  Sellers continue initiating trades, down through overnight low 7222.  Look for buyers down at 7211.50 and two way trade to ensue.

Hypo 3 stronger buyers trade us up to 7328 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves

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NASDAQ behavior back to normal, here is the summer Wednesday trading plan

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight during a balanced session, pushing back up near weekly highs, a place we have gone gap down-and-away from twice this week.  As we approach cash open price is hovering near Monday’s closing price.

On the economic calendar today we have existing home sales at 10am and crude oil inventories at 10:30am.

Yesterday we printed a neutral extreme up.  The day began gap down and with a choppy open.  By mid-morning sellers stepped in and pushed lower, into the 06/08 range from two Friday’s back.  The market briefly went range extension down before a strong bid stepped in and effectively reversed the selling with one hard rotation up.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7252.50.  Buyers step in here and work higher, up through overnight high 7274.75 to close the open gap at 7275.50.  Look for sellers up at 7279.75 and two way trade to ensue.

Hypo 2 buyers gap-and-go higher, trade up through 7279.75 and sustain trade above it setting up a move to target 7300.  Extended target is the open gap at 7312 then open air above 7321.

Hypo 3 stronger sellers close overnight gap 7252.50, trade us down through overnight low 7226.75.  Look for buyers down at 7216 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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