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Payroll data paints ugly picture of american economy, markets non-reactive, here is Friday NASDAQ trading plan

NASDAQ futures are coming into Friday with a slight gap down after an overnight session featuring extreme range on elevated volume. Price was balanced overnight, chopping along the upper half of Thursday’s range. Several times price came close to taking out the Thursday high but didn’t exceed it. This formed a weak high heading into nonfarm payroll data. At 8:30am NFP data came out well below expectations:

USA Nonfarm Payrolls for Mar (701K) vs (100K) Est; Prior 273K

USA Unemployment Rate for Mar 4.4% vs 3.8 Est; Prior 3.5%

Since then price has been stable, despite the soft data. As we approach cash open, price is hovering above Thursday’s midpoint.

Also on the economic calendar today we have ISM non-manufacturing data at 10am.

Yesterday we printed a normal variation up. The day began with a flat but only because futures were moving fast ahead of the bell. A few minutes prior to the open we were gap up by about 50 handles. Sellers worked this gap fill before the open and once opening bell hit we saw a buying drive higher. Sellers stepped in ahead of Wednesday’s midpoitn and reversed the open drive up but said sellers could not take out overnight low. Instead price ripped higher again, making new higher of day and then holding a tight flag through New York lunch. Sellers were active again in the afternoon but their efforts were again thwarted. Another rip took price near the overnight high by end of day, and we closed near the highs, but never actually fulfilled the overnight stat.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7629.50. From here we continue higher, up through overnight high 7651.50 on our way to tagging the composite VPOC at 7700 before two way trade ensues.

Hypo 2 stronger buyers rally price up through 7700 and tag 7743 before two way trade ensues.

Hypo 3 sellers press down through overnight low 7509.50 setting up a move down to 7359 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Sellers whack NASDAQ on weak jobs data, here is Thursday trading plan

NASDAQ futures are coming into Thursday gap up a quick +100 after an overnight session featuring extreme range and volume. Price slowly pressed higher overnight, working back to the Wednesday midpoint and then exceeding it as we came into balance. At 8:30am Initial/Continuing jobless claims data came out twice as bad as expected. As we approach cash open, price is churning along the Wednesday midpoint.

Also on the economic calendar today we have durable goods orders at 10am followed by 4- and 8-week T-bill auctions at 11:30am.

Yesterday we printed a double distribution trend down. The day began with a gap down near a new weekly low. Buyers were first to act after the open, nearly working back up to the composite VPOC at 7700 before sellers stepped in and reversed the auction. The rest of the day was spent working lower. Maybe the day type could be classified as neutral extreme down, but given the range covered and overall structure of the profile, it more resembles a double distribution down. The day ended down near last Wednesday’s low.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7437.50. From here we continue lower, down through overnight low 7433.75. Look for buyers down at 7357.50 and two way trade to ensue.

Hypo 2 stronger sellers trade down to 7216.75 before two way trade ensues.

Hypo 3 buyers work up through overnight high 7596.50 and tag 7612.75 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ heading into April down a quick -200 // here is Wednesday trading plan

NASDAQ futures are coming into Wednesday pro gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, taking out the Tuesday low early on and sustained a tight balance until about midnight when a fresh wave of selling worked price down to a new low on the week. Since them we have been in balance, and as we approach cash open price is hovering right along last Thursday’s low.

On the economic calendar today we have ISM employment/manufacturing along with construction spending at 10am then crude oil inventories at 10:30am.

Yesterday we printed a neutral extreme down, barely. The day began with a gap down in range and after an open two-way auction buyers stepped in and drove price higher. I say barely neutral extreme because just after the initial balance was set (just after 10:30am New York) price went a few handles higher, pushing range extension up and exceeding the prior swing high set on Friday the 13th by a bit. Then sellers stepped in, failed auction style. Sellers slashed down through the daily midpoint by late in the lunch hour and then defended a check back to the mid, eventually setting up a second leg lower, to a new low of day, neutral. We ended the day on the lows.

Neutral extreme down.

Heading into today my primary expectation is for buyers work into the overnight inventory and trade up to the 7700 composite VPOC. We chop here for a while before continuing higher, up through overnight high 7790.25. Look for sellers at 7813 and two way trade to ensue.

Hypo 2 sellers to gap-and-go lower, trading down through overnight low 7524. Look for buyers just below at 7512.50 (down as low as 7500) and two way trade to ensue.

Hypo 3 stronger sellers close the gap down at 7463.25 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Slow tape into month-end, here is Tuesday NASDAQ trading plan

NASDAQ futures are coming into Tuesday gap down after an overnight session featuring extreme range and volume. Price was balanced for most of the overnight session, balancing along the high print set Monday. Price nearly took out the Friday the 13th high print before falling back down into balance, and as we approach cash open, price is hovering just above the Tuesday midpoint.

On the economic calendar today we have Chicago purchasing manager at 9:45am followed by consumer confidence at 10am.

Yesterday we printed a double distribution trend up. The day began with a gap up in range, with price opening just above last Friday’s VPOC. After a tight two-way auction price began working higher, trading up beyond the Friday high before lunchtime. The better part of the afternoon was spent chopping up above last Friday’s high, with buyers actively rejecting several attempts back down into the Friday range. This eventually resolved as a grind higher into closing bell, taking us up near last week’s high (but not exceeding it).

Heading into today my primary expectation is for us to balance out. Look for sellers to press into the opening bell, trading down through overnight low 7764.25. Look for buyers down in the 7700 range, down to 7669.25 and two way trade to ensue, chopping between 7700 and 7900.

Hypo 2 buyers work into the overnight inventory and close the gap up to 7856. Buyers then continue higher, up through overnight high 7957 setting up a run to 8000 before two way trade ensues.

Hypo 3 stronger sellers close the gap left behind last Friday down at 7572.25. Look for buyers down at 7512.50 and two way trade to ensue.

Levels:

Volume profiles, gaps and measured moves:

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Open gap in range ;-) NASDAQ up a quick +80 into the week

NASDAQ futures are coming into the week gap up after an overnight session featuring extreme range and volume. Price began the Globex session gap down by about -150 handles. Since then price worked higher, trading up to the Friday midpoint before coming into balance. As we approach cash open, price is hovering just below the Friday midpoint.

On the economic calendar today we have pending home sales at 10am followed by 13- and 26-week T-bill auctions at 11:30am.

Last week the broad market bounced after nearly a month of discovering lower prices. Monday began with choppy weakness. Tuesday was gap up and buyers were in control through Thursday. Friday was choppy and two way before a sharp move lower took us into the weekend. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a neutral extreme down. The day began with a gap down into the lower quad of Thursday’s range. After a tight chop for most of the day buyers stepped in and worked higher but were unable to close the overnight gap before that selling spike hit late in the day. We ended at low of day, in a neutral print.

Neutral extreme down. Inside day.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7572.25. Buyers show up ahead of 7500 and two way trade ensues.

Hypo 2 stronger sellers trade down through overnight low 7365. Buyers show up just below, around 7360 and two way trade ensues.

Hypo 3 buyers gap-and-go higher, trading up through overnight high 7690, tagging 7700 on the way to 7738.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Mixed signals into month-end

Spring vibes are in full effect up here in the murder mitten today, with birds chirping and an electric green hue taking hold on the ground and trees. Otherwise the local scene is rather grimy.

We have a governor mandated shelter-in-place, which quite honestly has only modestly changed my professional and personal routines. The hustle has always been a remote endeavor for humble Raul. Last week I traded well up until Friday afternoon, when I stuck around later than I normally do and gave back my morning gains. Normally, on a nice Friday in spring, I’d take my morning gains and head down into the city to cavort with the day drinkers, saving me money and allowing me to spread my brand of propaganda locally.

These skype chat happy hours and zoom meetings might need to replace my old routines.

This virus changes everything. I doubt I’ll ever go to a rave or unsanctioned after hours event again without wearing safety glasses and a mask. The human condition is worsening, pestilent and viral.

After preparing the Sunday research and publishing the Exodus Strategy Session, I have mixed signals. There is plenty of reason we could see continuation to the upside, but then Utilities led the charge last week and IndexModel is flagging Rose Colored Sunglasses.  Therefore I am only allowed to short sell the NASDAQ all week. I will be doing so on a limited basis. Ideally an up gap inside the prior day’s range for me to fade. I will not be pressing trades late into the day unless we really accelerate to the downside again.

That’s about it. I am looking to buy more Microsoft and Google and swap out my Goldman position for Square. Ideally I buy into big down days, when things appear their worst. But who knows, I may have to chase the great ones.

My oil positions don’t feel good, WES and PTR, but I never expected them to. I shall stick with them for quite a while.

On Wednesday morning my quant strategy rebalances, hopefully I have time to share my latest thoughts on that project here.

That’s all for now. Trade’em well.

Raul Santos, March 29th, 2020

Exodus members, the 279th edition of Strategy Session is live, go check it out.

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Open gap in range ;-) here is Friday trading plan

NASDAQ futures are coming into Friday gap down after an overnight session featuring extreme range and volume. Price was balanced overnight, ticking up near the Thursday high but not exceeding it, forming a weak high before falling out of balance around 8:30pm New York. From then on, the Globex session was spent drifting lower. The first tag of the Thursday midpoint saw responsive buyers actively engaged, but they were eventually over run via a slow grind lower.  As we approach cash open, price is hovering below the Thursday midpoint at 7700.

On the economic calendar today we have University of Michigan’s final reading of sentiment at 10am.

There will likely be continued attention on capitol hill today, as we await the approval of the $2+T relief package to clear the house.

Yesterday we printed a normal variation up that was accented with a late-day ramp higher. The day began with a gap up and drive higher, leaving the open gap behind as buyers worked up to the 7700 composite VPOC. We marked time along this level, chopping up above the mid all day before a strong surge higher into the closing bell. This late-day action took prices up into the upper quadrant of the Friday the 13th range. We ended the day near the highs.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7846.50, setting up a move up through overnight high 7893.25. Look for sellers up at 8000 and two way trade to ensue.

Hypo 2 stronger buyers sustain trade above 8000 setting up a second leg higher to 8100. Look for sellers up at 8179.50.

Hypo 3 sellers press down through overnight low 7618.75 setting up a move down to 7526.25 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Open gap in range ;-) here is Thursday NASDAQ trading plan

NASDAQ futures are coming into Tuesday with a slight gap down after an overnight session featuring extreme range and volume. Price was balanced overnight, slowly fading lower in a balanced way until taking out Wednesday low. At 8:30am initial/continuing jobless claims data came out worse than expected. As we approach cash open, price is hovering in the lower quadrant of Wednesday’s range.

Also on the economic calendar today we have 4- and 8-week T-bill auction at 11:30am followed by a 7-year note auction at 1pm.

Yesterday we printed a normal variation up. The day began with a gap up that sellers quickly resolved shut before buyers spiked price. Before 10am sellers were fading this buy spike and sending price to a quick new low of day. This all happened in the first 45 minutes of trade, and would mark session low for the rest of the day. WE slowly rotated back up to the midpoint, then buyers accelerated as they crossed through it, setting up a move to new high of day and pushing us range extension up. We eventually tagged the 7700 composite VPOC and held it for about 1.5 hours. Sellers drove price back down through the mid during settlement.

Heading into today my primary expectation is for buyers to fill the overnight gap up to 7463.25 then continue higher, up through overnight high 7549.5. This sets up a run to 7600 before two way trade ensues.

Hypo 2 stronger buyers trade up to 7700 before two way trade ensues.

Hypo 3 sellers press down through overnight low 7310.25 setting up a move to tag 7300. Look for buyers down at 7216.75 and two way trade to ensue.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ hold gains for a third day, here is Wednesday trading plan

NASDAQ futures are coming into Wednesday with a slight gap down after an overnight session featuring extreme range and volume. The overnight was balanced until about 4am New York, balancing in the upper half of Tuesday’s range before spiking higher. The spike saw price trade to levels unseen since Friday the 13th before sellers stepped in and returned us back into balance. At 8:30am durable goods orders came out stronger than expected. At 9am house price index came out a touch below expectations. As we approach cash pen, price is hovering in the upper quad of Tuesday’s range.

Also on the economic calendar today we have crude oil inventories at 10:30am, 2-year note auction at 11:30am and a 5-year note auction at 1pm.

Yesterday we printed a neutral extreme up. The day began with a gap up into the top quad of Monday’s range. After a two way open auction buyers stepped in and worked up through the Monday high, tagging the upper weekly atr band before sellers stepped in and reversed the entire daily range, putting us neutral. Sellers stalled out just a few ticks below low of day and we ramped higher for the rest of the session, closing at high of day.

Neutral extreme.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up to 7700 before two way trade ensues.

Hypo 2 stronger buyers close the Friday the 13th gap up at 7901 before two way trade ensues.

Hypo 3 sellers press down through overnight low 7377 setting up a move down to 7216.75 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

 

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NASDAQ circuit breaker up overnight, off the highs, here is Tuesday trading plan

NASDAQ futures are coming into Tuesday up a quick +270 after an overnight session featuring extreme range and volume. Price worked higher overnight, rotating upward throughout the globex session before triggering a circuit breaker around 5:40am New York. Since then we are about -100 off the overnight high. As we approach cash open, price is trading in the upper quadrant of last Friday’s range.

On the economic calendar today we have Markit composite/manufacturing/service PMI at 9:45am, new home sales at 10am, a 52-week T-bill auction at 11:30am and a 2-year note auction at 1pm.

Yesterday we printed neutral day. The day began with a gap down after futures were limit down Sunday evening. A strong bid entered the market around 8:10am and erased the large gap before opening bell. From there sellers pressed into the opening tape, trading down near last week’s low before buyers stepped in and a two way auction formed. Around noon sellers took the market range extension down and to new swing lows before discovering a strong responsive bid. Said bidders worked to a new high of day putting us into a neutral print. From there we fell back to the midpoint and chopped along it, eventually closing above it but settled near the middle of the day’s range.

Neutral.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up to 7480.25 before two way trade ensues.

Hypo 2 stronger buyers sustain trade above 7495 setting up a run to 7600. Stretch target 7700 composite VPOC then 7901 open gap.

Hypo 3 sellers work into the overnight inventory and close the gap down to 7002.25. Sellers continue lower, down through overnight low 6953.50. Look for buyers down at 6900 and two way trade to ensue.

Levels:

Volume profiles, gaps and measured moves:

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