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I turn dials and fiddle with knobs to hone in on harmonic rotations

Model calls for the up drift

First signal coming out of IndexModel for 2023 is an extreme Rose Colored Sunglasses. It’s an odd one considering the news heavy week ahead.

The Feds kick things off Wednesday with a hot announcement. The gambling halls down in Chicago are placing over 90% odds of a 25 basis point hike. Then Meta reports after the bell. Interestingly, Meta is +50% since the November lows. Mamma mia. Apple, Alphabet and Amazon (the THREE A’s of global domination) report Thursday and the non-farm Payrolls Friday morning.

So the model might not know there’s all these volatility-inducing events ahead, but the model is the model is the model and if the model says to make to for to make to for when it says to make to when it says to make to press longs daddy-o we press the longs.

Also we’re dealing with a month-end after a heckin’ strong January.

Obviously, we don’t know what the week shall bring, but all the ingredients are in place for a dang good squeeze.

Okay for now.

Raul Santos, January 29th 2023

And now the 418th Strategy Session.


Stocklabs Strategy Session: 01/30/23 – 02/03/23

I. Executive Summary

Raul’s bias score 3.75, medium bull*. Price sort of marks time through Wednesday, then look for third reaction to the FOMC minutes to provide direction into the second half of the week.

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

II. RECAP OF THE ACTION

Spike higher early Monday which consolidated for a day then was given back early Wednesday, only to reveal a stronger bid which formed a sharp lo and then we rallied into the weekend.

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

Rotational Report:

Rotations were a bit stronger than the prior week, with strength in key drivers.

bullish

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

Concentrated Money Flows:

After two weeks of heavy bullish skews, then a neutral ledger, we saw another strong bull skew.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

New Overbought signal

There was that cluster of overbought signals in recent history, but the only one we logged as relevant was the first one. Now we have a fresh 12-month hybrid overbought cycle on the docket. Ten more (trading) days of bullish stats.

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:

Price sort of marks time through Wednesday, then look for third reaction to the FOMC minutes to provide 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]:

Range break up?

Readers are encouraged to apply these techniques to all markets. 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

Transports are still pressing into the top-end of range. Perhaps FOMC announcement will give the sellers ammo to defend their turf. That is our primary expectation. But maybe we bust out and go into discovery up.

We don’t know.

See below:

Semiconductors really have coiled up, and while in short term balance, more and more the intermediate term is looking like discovery up.

Ether has weak lows. The thing is now it is building a nice consolidation channel. Building up lots of energy. It could make another     squeeze higher, even if the lows are weak.

V. INDEX MODEL

Bias model signalling extreme Rose Colored Sunglasses (e[rcs]) after several weeks of being neutral. e[rcs] signal calls for a calm drift, perhaps with a slight upward bias.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“It takes empathy, patience, and compassion to overcome anger, hatred and resentment.” – Dr. Martin Luther King, Jr.

Trade simple, be patient

Comments »

Stabilizing

Good morning lads, not much time for me today so I shall keep this communique brief — my life often reflects the state of the equity complex, for better or worse, and maybe that is not healthy. I’ve always viewed the auction taking place on the big indices as a collective consciousness of society, and expanded that into the day-to-day of the average joe and yours truly. The fact is, my generation in particular (the millenial) has, for the most part, their entire fate attached to the stock market. Every pay period, honest working folks contribute dollars to their 401-k plans, defined contributions, in good faith to the system that it will provide security in their ‘golden years’. I trust this system and assume that it will continue to trend higher, forever, despite all the noise made by the bernie bros and their cohorts. Sometimes price goes down, quite drastically, but eventually good prevails and we head back into the light.

Right now I see signs we are getting back on track.

It makes no sense to blame politicians or billionares for the woes of ones life. The outcome of your days are determined by your own actions, plain and simple.

Research suggests the equity complex, and perhaps even crypto (the greatest ponzi of all time) both are stabilizing, despite hard working agents of chaos on the right edge of nationalist fury.

I’ve personally been in a state of chaos, having helped up-end my elders and all their accumulated possessions in the name of long-term success. They are finally settling into the nice single story house we found them, and it is high time they ship out to Florida where their bones are less achy.

I’ve been setting up my office. I had to redo the walls and ceiling because they were busted to shit. This is menial work that I am plowing through and nearly completing.

It seems every day like I inch closer to getting back on my hustle, extracting NASDAQs.

The call is for stabilization. I like stocks here. Let’s see how we come out of this week after Microsoft and Tesla report.

I am off to brunch, and then go see the Van Gogh paintings once more before they ship out.

Au revoir,

Raul Santos, January 22nd, 2023

And now the 417th edition of Strategy session.


Stocklabs Strategy Session: 01/23/23 – 01/27/23

I. Executive Summary

Raul’s bias score 3.10, neutral. Watch for earnings out of Microsoft and Tesla (Tuesday and Wednesday, after-market-close, respectively) to provide direction to the overall tape.

II. RECAP OF THE ACTION

A little push higher early in the week found excess and sellers stepped in. Halfway through Thursday the auction stabilized and we worked higher into the weekend.

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

Rotational Report:

Rotations were mostly lower but that green shoot in Tech is what we like to see as bulls.

slightly bullish

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

Concentrated Money Flows:

After two weeks of heavy bullish skews the ledger went neutral.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Seasonality verse reality

January’s average return is 0.55% according to Stocklabs. So far the S&P is up 3.5% on the month. Major skew away from the historical average suggests conviction amongst bulls, especially if they can carry this return into month-end.

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:

Watch for earnings out of Microsoft and Tesla (Tuesday and Wednesday, after-market-close, respectively) to provide direction to the overall tape.

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]:

Probing upper end of range, ether makes a move

Readers are encouraged to apply these techniques to all markets. 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

Transports are pressing into the upper edge of range. Will sellers defend? This could be a potential pivot back to bullishness. For now, primary expectation is for range to hold.

See below:

Semiconductors same story — there is  a potential here for a pivot into bullishness.

Ether has weak lows. Is this a big base? I am still skeptical.

V. INDEX MODEL

Bias model is neutral heading into the final full week of January. Still neutral.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“A wise man can play the part of a clown, but a clown can’t play the part of a wise man.” – Malcom X

Trade simple, keep them on their toes

 

 

Comments »

The dreaded early January rally

Max pain is risk assets going on a strong run right after we’re subjected to a liquidity blitz from that jolly saint nick and his cadre of capitalists at Target and Costco. I dunno about yous, but I feel a bit underexposed, despite being quite irresponsibly exposed. The question is what happens next?

Obviously we dunno and anyone who says they do is a no dang good charlatan.

We can formulate an educated guess used good cold, hardt, dead data. The data suggests we could continue this probe higher next week.

Then there are the charts. Semiconductors and Transports are still in balance and have some headway to keep moving higher. Transports really look like some juan lit a fire under their toosh. That strong move these last six or seven sessions had some purpose behind it. It has been nice being big into FedEx to start the year—even though this is a long term hold—and not some gimmicky trade.

Then there are the central bankers. And they’ll be jibber jabbering all next week alongside earnings from several major banks. These despicable professionals will be swaying the outcome of next week’s price action to some extent. Not to the extent of like the honcho himself Powell talking, but perhaps little ekg bursts of volatility. We cannot trust these buggers. They do no real physical work theirs is a vocation of shaving away at the wealth of others and offering numbers on a screen in return.

Dreaded rallies tend to keep going. That is how they make to to make to for to make to when to make to inflict maximum pain on the genpop. That said, I am casting serious doubt on the rally in ethereum. That low is weak, and I don’t like it, and until it resolves color me a skeptic.

That’s all I’ve to say for now. I need to tend to some house plants, placate the other humans in my coexistence and with any luck get back to toiling on my projects.

Gyarrrrr.

Raul Santos, January 15th, 2023


Stocklabs Strategy Session: 01/16/23 – 01/20/23

I. Executive Summary

Raul’s bias score 3.70, medium bull. Buyers continue to inch price higher during the holiday-shortened week.

*U.S. markets will be closed Monday, January 17th in observation of Dr. Martin Luther King Jr. day.

II. RECAP OF THE ACTION

There was this big rally Monday that like in recent history was sharply reversed by the afternoon. However the sellers could not follow through, and by late Tuesday prices were rallying. The rally continued through early Thursday when CPI put some chop into the tape for a whole day. Friday sellers attempted an early move but were thwarted and we ended the week on a strong note.

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

Rotational Report:

Rotations flipped bullish. Solid looking rotations for the bull camp, except we’d like to see Materials a bit softer, with all the concerns around inflation.

slightly bullish

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

Concentrated Money Flows:

Second week of heavy bull skew.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Signal clusters

One of my twitter homies (@solinfluencer) noted that we are seeing a cluster of overbought signals on the main algo. This is an interesting observation, and it suggests that the indicator may be adjusting to changing market conditions.

That upper boundary may have made sense in recent history, whilst we spent 14-or-so months correcting, and perhaps now the correction phase is nearing an end. We don’t know. But the clustering suggest that the upper boundary may have drifted too low.

I see all of this as bullish.

Remember, the first signal in a set of signals is the only on tracked by the system. So those other signals are all contained within the current cycle. And past performance of the 12-month overbought signal has bullish stats.

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 continue to inch price higher during the holiday-shortened 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]:

Equity complex still holds range – ether prints a sketchy rally

Readers are encouraged to apply these techniques to all markets. 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

Transports continued a little explosive discovery move up all week long. For now it is still contained within the confines of balance.

See below:

Semiconductors are moving up and away from a recent consolidation and still appear to be in balance. TSM reported a solid quarterly earnings last week.

Ether *still* has those weak lows just below. Despite last week’s rally, I am still not feeling great about this chart set up. We could be setting up another overplay for the underlay, like we have been drawing for so many weeks back a bit left on the chart.

V. INDEX MODEL

Bias model is neutral heading into the second week of 2023. Still neutral.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“We must use time creatively, in the knowledge that the time is always right to do right.” – Dr. Martin Luther King Jr.

Trade simple, be kind

Comments »

Taking it slow

My new year’s resolution was to slow down. After spending a week moving boxes to and fro and up and down and over and around through the rain and mud I spend last week real easy like. I did some cleaning. Went to the gym a bunch. Took several naps. Made and ate goodt foodt. I still don’t feel a ton of necessity to work just yet.

Winter is here and it is mild and gross. I don’t even like looking outside right now. I’d rather be in virtual reality, watching giant mandelas swirl around and into my periphery. Draw the curtains shut and use fluorescent bulks to keep the plants happy. Sit by the fire and read old books. Mothership is a balmy 64 degrees unless you’re by the fire and the only other occupant (besides about 100 or so plants) is a wonderful echo.

These city folks are always in a real.big.hurry. As soon as I turn onto the road for my little two block drive for groceries some speed demon is on me…pressing their bumper near mine in some futile attempt to alter the rate of travel I’ve chosen. Not gonna happen. Mind you, I always do four over. Not fife. Apparently this isn’t enough.

The markets seem to be feeling a similar kind of vibe. The charts have basically marked time since I left them back on the 18th. Nothing is happening, therefore who am I to make to for to make to for to to make to foist my will upon something much greater than me? Powell might jiggle us out of range Tuesday (we don’t know) or maybe CPI Thursday. The citadel loves playing games with the CPI lately.

Probably ganna be a hot number. The freaking Targets and Costcos are packed as ever, packed with decent citizens looking for deals on textiles and groceries. They have not hiked rates enough.

That’s about it. I feel strong, but it’s that six weeks into pumping iron strong where your muscles firm up and you can very clearly see where big old deposits of fat have formed since the last time the body was jacked. So there is a shame associated with it. But I am very strong on plow at the moment.

It’s interesting how it takes a minute to reawaken certain muscle memories, but wow once you jump start those neural pathways they’re ready to freaking rage. I suspect it will be a similar experience when I finally go back to hustling the NASDAQ. Two weeks of beginners luck. Many weeks of all pain no gains, then a return to the growth trajectory.

Okay for now.

Raul Santos, January 8th 2022

And now the 416th edition of Strategy Session.


Stocklabs Strategy Session: 01/09/23 – 01/13/23

I. Executive Summary

Raul’s bias score 3.03, neutral. Markets continue to pause until Tuesday morning when comments from Fed Chairman Powell put some movement into the tape. Then look for CPI data due out Thursday morning to provide direction into the weekend.

II. RECAP OF THE ACTION

2023 kicked off with choppy action, with price chopping along the range from the last week of 2022. Buyers made a show of the action Friday morning, using nonfarm data as motivation to hold range low and put a bid into the tape.

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

Rotational Report:

Rotations not really boding well for bulls—the top performance from Materials and financials speaks to risk aversion and inflation along.

neutral

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

Concentrated Money Flows:

Under the surface, money flows skewed heavily to the buy side.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Marking time is a healthy way for markets to correct

Of all the ways for markets to correct after going on a major move, sideways, or ‘marking time’ is certainly the healthiest. It suggests participants are in agreement, for now, regarding the price of an asset. It allows time to pass, which effectively corrects imbalanced prices via time.

This time based correction comes on the heels of a multi-month leg lower. In this context, the time based correction favors the bears. Markets are accepting these lower prices and may be keen to explore lower soon.

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:

Markets continue to pause until Tuesday morning when comments from Fed Chairman Powell put some movement into the tape. Then look for CPI data due out Thursday morning to provide 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]:

Equity complex holds range – ether still looks weak

Readers are encouraged to apply these techniques to all markets. 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

Transports caught a strong bid Friday off of range low.

See below:

Semiconductors have an interesting story going on — ranges inside of ranges. Attempts to break are quickly reverting to the mean. Perhaps earnings out of $TSM Thursday before the bell (along with CPI) can put some clarity into this chart. But for now balance is the call.

Ether *still* has those weak lows just below. Cannot feel bullish about crypto until there is some resolution to this chart.

V. INDEX MODEL

Bias model is neutral heading into the second week of 2023.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“Take time to deliberate; but when the time arrives, stop thinking and go in.” – Andrew Jackson

Trade simple, think slow

Comments »

The Great Reshuffling is underway

Firstoff ho ho ho and a very merry christmas to you all. Thank you for bearing with me through 2022 whilst I soft retired to a life of extreme toil. When they said it was time to build I took that quite seriously. Being of Italian descent, my efforts went towards cement, gardens and structures. I’ve nearly rounded the bend on several of my largest projects and now I am overseeing the physical movement of nine humans into four different places.

It was time for the elders to downsize. Most of you young chaps don’t realize this, being young and full of energy, but these olds man…the longer they exist the more difficult rudimentary tasks such as laundry or leaving the bed become. Stairs are killers. Especially when the rise and run are harsh, the decking slick and the width—narrow. I’m helping momma and poppa Raul transition into a nice sprawling ranch with zero elevation changes. This ought to keep them kicking for another forty years or so.

A dear old friend of mine met his end over the summer, far too young, and his elders had a similar, far-too-many stairs set up. They too, with my help, are being transitioned into a single-story place of their own along with their daughter and her family.

I have pro movers for all the big stuff, but by golly do folks struggle with purging and organizing. That is where I come in. I am ‘THE PURGOORRR.” My decades as an accountant and deep understanding of Aristotelian organization allow me to quickly rifle through discombobulated shit piles and sort and purge. So I do this, and then I pack it up and shuffle it about.

I’ve commissioned a twenty foot U-Haul for the week. It will be my daily driver, as I shuffle these organized bins all around the metro area.

All this to say, my faithful and honest readers, that there will be no research this week. If I am not dead come next Sunday, I will put some together heading into the new year.

Once all these people are situated, I will go to work reassembling my office so I can trade. I know the flight attendents say to secure your own mask before attempting to help others, but in this instance, I am doing it the other way around. I simply cannot acheive the peace and clarity I need for high stakes futures trading knowing people I care dearly about are struggling in their day-to-day.

I am incredibly grateful for the secular bull market that ran from oh about 2015 to November 2021 and for all the wealth I amassed during it. To be in a position to take a gap year and also sort out these matters without feeling the pressure of fucking bankers and their monthly out-facing palms has been a real blessing.

A special thank you to Elon Musk. His ability to defy the masses and make Tesla a great success changed my life. Then there was the epic bitcoin run. Something that may never happen again in my lifetime.

Going forward, my moonshot play is ethereum (eventually, right now the chart looks like shit) and the Pudgy Penguins who live on that chain.

But my top stocks picks heading into 2023, stocks that are certain to be mundane but outperform this bastard market are FedEx, Walmart and Berkshire Hathaway. In that order.

Okay for now.

Happy New Year in advance.

Raul Santos, December 26th 2022

Comments »

Two more weeks

Caught the Christmas spirit last night. Went to a really swell shindig with all the bougie trimmings of upper middle class living. Ate a bit of raw meat (these persians serve giant plates of raw meat, truly disturbing I had to try it). Drank a fair bit of hooch and sang some christmas cheer into place.

Woke up with a stage five hangover. Attempted to correct it with a handful of weed gummies around 7am. These severely impacted my cognitive performance for many hours. I tried doing this research in the morning and simply could not. After an hour of struggled research I realized my dazed state could be better put to use on mundane tasks.

Picked up a xmas tree from the market for cheap prices buddy. Put a fresh cut in the trunk and placed it in the living room. Hung some stockings. Misted all ze plants. Went and helped some old lady by carrying a tredmill up some bastard stairs and changed a few of her light bulbs. Took a meeting with a client. Ate a bowl and chili and came back to the decks.

Sometimes you just have to push through in an easy sort of way. My only regret was totally missing the world cup, which turned out to be a heck of a match.

This year has been quite the test. I have a few more weeks of helping the elders situate themselves in their new digs and then I’ll ship them off to Florida for a few months.

I have been thinking about some new studies I’d like to run before going back live onto the futures. Preparing and getting back into the NASDAQ futures arena is something I’m so very looking forward to. I’ve taken an entire year off.

If it is anything like weight lifting, I have to imagine it is going to take at least seven weeks for me to rebuild decent muscle memory. Gonna have to start light and slowly add weight. Might take me a dang year to get back to where I was when I stopped.

But what is the alternative? Blow up trying to do what a younger raul once did? Or never trade again.

No freaking thank you.

Okay for now.

Ho ho ho.

Raul Santos, December 18th, 2022

And now the 415th Strategy Session.


Stocklabs Strategy Session: 12/19/22 – 12/23/22

I. Executive Summary

Raul’s bias score 2.25, medium bear. Thin markets heading into the holiday weekend. Look for exaggerated moves. No bias.

II. RECAP OF THE ACTION

Buyers worked the tap higher heading into the CPI print then price initially spiked higher on the print. The whole move was erased by lunchtime Tuesday. Then Wednesday afternoon FOMC decisions introduced strong sellers who took control of the tape and pressed lower for the remainder of the week.

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

Rotational Report:

Rotations bearish across the board for second week.

bearish

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

Concentrated Money Flows:

Money flows skewed heavily to the sell side for the second consecutive week. Following five weeks of neutral money flows.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Riding the storm out

Just been playing defense really. No strong indication to accumulate more risk. Yet.

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:

Thin markets heading into the holiday weekend. Look for exaggerated moves. No bias.

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]:

Equity complex held up decently last week – ether still looks weak

Readers are encouraged to apply these techniques to all markets. 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

Transports still appear balanced.

See below:

Semiconductors still have that balance inside balance. Perhaps earning out of MU Wednesday after the bell will kick start some discovery.

Ether has those weak lows just below. Cannot feel bullish about crypto until there is some resolution to this chart.

V.INDEX MODEL

Bias model is neutral for second consecutive time heading into next week. Neutral no bias after four e[RCS] in recent history.

There were five Bunker Busters in recent history — fifteen weeks ago, twenty-four weeks back, thirty-one weeks ago, forty-four reports back and forty-six reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“It is vain to do with more what can be done with less.” – William of Occam

Trade simple, keep it simple

Comments »

I like being early

I’ve been reflecting a bit in this calming grey winter days — and one thing about this time last year (aside from being about when my portfolios were at their high water mark) is how suddenly everyone wanted to talk to me about investing.

My ego loved it. I started doing presentations and taking all sorts of phone calls and helping people set up vpns and whatnot to circumvent the draconian restrictions placed on american investors.

The people wanted in and I was happy to help.

The thing is, I’d still be happy to help today but nobody is interested. And this is truly when I do my finest work.

I’m a lone wolf. That means doing things before they are popular. It often means eventually, folks start to catch on. Those early folks tend to be good people. Then it slowly degrades into the doofus class, and that’s when it’s time for me to fly.

Right now, in Detroit, I am early. There is nothing around my vast acrage aside from some old hippy commune, a few drug dealers and some rouge gardeners. It’s nice. But they’re already moving in on me. Right now. Good people. Young families. Long-time natives to the area buying alongside their people.

But the bros are coming. I can sense it. And there is little I can do aside from accumulate as much land mass as possible to buffer me from their foolishness.

L.A. Fitness opened a brand new space next to the Home Depot about three weeks ago. I’ve been going since it opened. It is empty and clean. The machines are new. It is nice to be there with all that good air to breathe and all those nice pieces of iron to move around.

This shall be short lived.

Right now I am early to the risk cycle reset. Have had some winners like Walmart. Soon the masses will move on me and I’ll have to push out to thinner ice.

This is the life of a lone wolf. And I like it.

Okay. Big week coming up. Models have nothing to say regarding bias. Our fate is in the hands of Ken Griffen.

Raul Santos,

December 11th, 2022

And now the 414th edition of Strategy Session


Stocklabs Strategy Session: 12/12/22 – 12/16/22

I. Executive Summary

Raul’s bias score 2.60, medium bear. Tricky days ahead. No biases generated from the models. Markets likely to have big reactions to CPI data Tuesday morning and the FOMC announcement Wednesday afternoon. Expecting those events to dictate market direction into the second half of the week.

II. RECAP OF THE ACTION

Selling pressure early on and through Wednesday morning (just like the prior week). Then choppy through Thursday. Hard sell Friday morning on the non-farm payroll data. Most of Friday spent clawing back those NFP losses before a bit more selling pressure into the close.

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

Rotational Report:

Rotations flipped bearish across the board.

bearish

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

Concentrated Money Flows:

Money flows skewed heavily to the sell side for the first time in five weeks.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Year end volatility

Never been fond of the thin and volatile markets that often occur near year-end. Yes, big gains can happen in these conditions. There are lots of participants interacting with the tape for various reasons, operating on different timeframes than traders.

Add in a couple high impact economic events, and the risk is extremely high. Just something to keep in mind heading into the week. Reduced position size is one way to stay active through this type of tape.

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:

Tricky days ahead. No biases generated from the models. Markets likely to have big reactions to CPI data Tuesday morning and the FOMC announcement Wednesday afternoon. Expecting those events to dictate market 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]:

*Still* the same conditions — weak ether, balance elsewhere

Readers are encouraged to apply these techniques to all markets. 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

Transports are off the upper edge of balance. There’s plenty of room for this index to oscillate without breaking balance.

See below:

Semiconductors show balance inside of balance. Building energy for the next big directional move.

Ether has those weak lows just below. Cannot feel bullish about crypto until there is some resolution to this chart.

V. INDEX MODEL

Bias model is neutral heading into next week. Neutral no bias after four e[RCS] in recent history.

There were five Bunker Busters in recent history — fourteen weeks ago, twenty-three weeks back, thirty weeks ago, forty-three reports back and forty-five reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“It’s the little details that are vital. Little things make big things happen.” – John Wooden

Trade simple, do the work

Comments »

Steady now

Holidays season is a lot of things for people. I often find myself questioning the meaning of life. Particularly how I intend to answer that question via my actions.

Good afternoon.

I just want to be good to my people and kind to strangers and build cool stuff whilst having some heckin’ fun.

If that is my legacy, to be carried forward for another 50 years or so after I perish. That is good enough.

I have no edge going into next week, but I like the overall context. As always, I am expecting a bull run.

Ho ho ho.

Raul Santos, December 4th, 2022

And now the 413th edition of Strategy Session.


Stocklabs Strategy Session: 12/05/22 – 12/09/22

I. Executive Summary

Raul’s bias score 3.45*, medium bull. Equity markets sort of drift higher during a week light in major economic data. Watch for some volatility Thursday after-the-bell when major retail component Costco reports earnings.

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

II. RECAP OF THE ACTION

Selling pressure early on and through Wednesday morning. Then a strong rally on the Powell comments. Choppy Thursday. Strong sell on the non-farm payroll data Friday morning. Then participants spent Friday clawing back those early morning losses to close out the week on a positive note.

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

Rotational Report:

Solid rotiations for bulls. Leadership from key sectors. Utilities lagging.

bullish

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

Concentrated Money Flows:

Money flows skewed slightly in favor of buyers for second week after being balanced three weeks ago after breaking balance to the buy side four weeks back.

slightly bullish

Here are this week’s results:

III. Stocklabs ACADEMY

3-month overbought stats — meh

We liked the 10-year stats on the 6-month overbought signal. We used them as evidence to press risk through month end last week.

The six month cycle is complete  and now we’re left with a fresh 3-month signal. But when you push that signals historical data out to a 5-year backtest (to gain enough samples to make a relevant analysis) the data is not particularly strong one way or the other.

It slightly favors the bulls, historically.

Pair that with indexmodel flashing the [RCS] bearish signal, and we have a wash.

No bias heading into next week.

All we can rely on is context. Contextually, I am bullish given seasonality. The lack of economic data due out. Light earnings calendar. Tax/estate planning. Vladimir Putin falling down and shitting himself.

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:

Equity markets sort of drift higher during a week light in major economic data. Watch for some volatility Thursday after-the-bell when major retail component Costco reports earnings.

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]:

Again, same conditions — weak ether, balance elsewhere

Readers are encouraged to apply these techniques to all markets. 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

Transports sort of lingering on the upper-end of balance.

See below:

Semiconductors have found resistance at old support levels so far, and appear to be settled into balance. During last week’s trading, a new tighter balance inside the larger balance formed. Building energy.

The swing lows on ether are looking increasingly weak. A test below 1k seems more likely with each day we linger down here.

V. INDEX MODEL

Bias model is Rose colored sunglasses bearish after being e(RCS) bullish last week after being RCS bearish three reports back after being e[RCS] bullish four reports back. All this flip-flopping follows two neutral weeks. Before the neutral weeks we had two consecutive weeks of extreme Rose Colored Sunglasses (e[RCS]) bullishness.

The count remains at four e[RCS] in recent history.

There were five Bunker Busters in recent history — thirteen weeks ago, twenty-two weeks back, twenty-nine weeks ago, forty-two reports back and forty-four reports back.

Here is the current spread:

VI. Six month hybrid overbought

On Friday, November 11th Stocklabs went technical and hybrid overbought on the six month algo. This is a bullish cycle that runs through Monday, November 28th . It runs a bit longer due to a trading holiday for Thanksgiving.

Here is the final performance of each major index over the cycle:

VII. QUOTE OF THE WEEK:

“I never struggled with injury problems, because of my preparation. In particular, my stretching.” – Edward Moses

Trade simple, prepare for action first

Comments »

KEEP PRESSING RISK

Lads I’ll be brief and hopefully that will aide your uptake of this critical message — there come a few moments in each year when conditions set up for making grotesque gains and right now is one of them.

We have those crypto fuckers on the run. Their fever, which infected the masses when they were forced into their homes for two year for no dang good reason by the manufactured hysteria of a pandemic, has been soothed by the opaque hand of the States United Federal Reserve.

In two or three foul wooshes, billions, possibly even a trillion, worth of the most asinine speculative froth was eviscerated from the numbers on the screen that say what everyone’s worth. That opened the door for a proper risk cycle reset.

The fourth estate is running out of juice on their ever-rampant campaign to stoke fear and anger in the name of clicks. And recently they’ve begun celebrating old names from the short seller’s realm like Jim Chanos.

Steady.

The genpop is distracted with events, event planning and games. They no longer are paying attention to our dear markets. And they’re letting us old crocodiles have our run of the place.

Average True Ranges, which model the daily range (when used on daily charts) have plummeted off their highs in the last few weeks. Dare I say, collective emotions are back in check? Methodical markets are back for working.

Yes, we could clutch our food reserves and stay plugged into the fear machine (cable news) waiting for ‘the next shoe to drop’ out in the geopolitical arena. China. Russia. Iran. You know, places with shit leadership fighting like idiots to remain in power.

But the truth is they lost control long ago. Somewhere in the mid 1950s, when capitalism really hit its stride here in AMERICA. Now citizens of this planet want their smart phones and internet. They want to switch their genders back and forth and bang each other and take psychedlics and frollic through shopping malls spending fiat american dollars on durable goods from those wonderful italian designers.

You have to admit, it really is great. America won, and will continue to win. And the month of December is when our western culture really shines. Places like Target and Costco fill up with shiny things and people line up to buy them. Three-out-of-four vehicles on the road has a nice blue smile on it — and has a driver who is putting out boxes for amazon.

Families gather around huge tables to eat all kinds of foods. We have real neighbors here, fuckers we’ve known forever who can be trusted with delicate secrets and help us prepare for battle in the name of extracting money from the system.

These next few weeks are critical. All hands on deck folks, let’s take that guac.

Raul Santos, November 27th, 2022

And now the 412th strategy session.


Stocklabs Strategy Session: 11/28/22 – 12/02/22

I. Executive Summary

Raul’s bias score 3.75*, medium bull. Equity markets press higher into month-end. Watch for some volatility Wednesday afternoon as Powell speaks and again Friday morning after non-farm payrolls.

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

II. RECAP OF THE ACTION

Choppy through early Tuesday then a rally. Then we marked time through the holiday sessions.

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

Rotational Report:

Rotations decidedly higher, but leadership from risk averse sectors like utilities and materials gives some caution.

slightly bullish

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

Concentrated Money Flows:

Money flows skewed slightly in favor of buyers after being balanced two weeks ago after breaking balance to the buy side three weeks back.

slightly bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Pressing our edge

We liked the 10-year stats on the 6-month overbought signal. Now they’re bolstered by indexmodel, which is bullish into month-end

Therefore we press long risk through month end. Through the Powell talk Wednesday. And brace for the Non-farm payroll data Friday morning.

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:

Equity markets press higher into month-end. Watch for some volatility Wednesday afternoon as Powell speaks and again Friday morning after non-farm payrolls.

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]:

Same conditions — weak ether, balance elsewhere

Readers are encouraged to apply these techniques to all markets. 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

Transports sort of lingering on the upper-end of balance.

See below:

Semiconductors have found resistance at old support levels so far, and appear to be settled into balance.

The swing lows on ether are looking increasingly weak. A test below 1k seems more likely with each day we linger down here.

V. INDEX MODEL

Bias model is e(RCS) bullish after being RCS bearish after being e[RCS] bullish three reports back week following two neutral weeks. Before all this we had two consecutive weeks of extreme Rose Colored Sunglasses (e[RCS]) bullishness.

So the count is at four e[RCS] in recent history.

There were five Bunker Busters in recent history — twelve weeks ago, twenty-one weeks back, twenty-eight weeks ago, forty-one reports back and forty-three reports back.

Here is the current spread:

VI. Six month hybrid overbought

On Friday, November 11th Stocklabs went technical and hybrid overbought on the six month algo. This is a bullish cycle that runs through Monday, November 28th . It runs a bit longer due to a trading holiday for Thanksgiving.

Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“I recently went to a new doctor and noticed he was located in something called the Professional Building. I felt better right away.” – George Carlin

Trade simple, mind your judgement

Comments »

Risk cycle reset

The only thing that makes me a halfway successful investor is a technique I refer to as ‘faith-based investing’. What it boils down to is investing in individual stocks of companies that I believe down to my core will exist long after I return to the ethereal plane. To me these titans of capitalism are manifestations of the gods of history. They possess omnipotence and immortality — like ze gods. Alls I do is layer on a bit of cyclical understanding and stick to my guns. The risk cycle has played out about five or six times in my short existence and in this time I have formed a basic competence. And from the competence I present to you today, the rag tag folks of iBankCoin (many of whom are some of the lowest swine on the internet), my belief that the risk cycle has indeed reset.

Early in a risk cycle investors start to ease into safe bets. Look at Walmart, for instance. Nearly trading at all-time highs, offering one of the finest dividends one can access. Selling groceries and hundreds of thousands of other consumer goods for a modest 25% profit. Walstreet is rewarding this behemoth for its size (largest employer in 39 american states) and durability. Early risk cycle winner.

Mega big tech has fared well as of recent. Tickers like GOOGL are sharply off the lows printed around Halloween.

Can I saw with certainty that the S&P 500 or the NASDAQ have bottomed? No. But I am gaining a ton of confidence that the overall risk cycle has been reset.

So we leg into these mega caps, then maybe early next year we can start to dabble in higher risk stuff like Rivian and crypto. And eventually, way down the line, we can run those cute penguin pictures again. But not yet.

Listen, the bearshitters have had their run of the joint pretty much all year long. They’re getting so loud. Almost as loud as I was this time last year, but of course for different reasons.

The perma-bull is a different kind of plauge. A perpetual optimist, who stares at reality with some kind of distorted lense that shows progress, the end of religion and state, giant glass buildings, autonomous low cost transportation for all, universal basic income that covers shelter, healthcare and foodt.

A bunch of folks simply existing — wandering around, writing stories and enjoying life.

These bearshitters…I dunno man, they’re fucked up. They want death. They become giddy over the potential of world war. They throw shade on anyone building.

If I must be diagnosed with a terminal illness, let it be permabullishness.

Raul Santos, November 20th, 2022

And now the 411th Strategy Session. Happy Thanksgiving!


Stocklabs Strategy Session: 11/21/22 – 11/25/22

I. Executive Summary

Raul’s bias score 3.00*, neutral. Markets drift through the beginning of the week. Then look for lots of economic data due out Wednesday (durable goods, jobless claims 8:30am ET, PMI 9:45am and Fed minutes 2pm) to put some direction into the tape ahead of the holiday.

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

U.S. markets will be closed Thursday, November 24th in observation of Thanksgiving and will resume trading for a half day Friday the 25th.

II. RECAP OF THE ACTION

Chopped higher through early Tuesday, lower through mid-day Thursday, then back to the middle heading into the weekend.

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

Rotational Report:

Rotations flipped back to risk aversion last week after flipping bullish two weeks back.

neutral

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

Concentrated Money Flows:

Money flows went back into balance after breaking balance to the buy side two weeks back.

slightly bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Sticking to the stats

If you look at the 10-year backtest of the 6-month overbought signal, Stocklabs returns 62 samples. After day five is when the signal becomes most bullish. These next five trading days, historically, according to Stocklabs have had a higher probability of positive returns.

Keep it simple.

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:

Markets drift through the beginning of the week. Then look for lots of economic data due out Wednesday (durable goods, jobless claims 8:30am ET, PMI 9:45am and Fed minutes 2pm) to put some direction into the tape ahead of the holiday.

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]:

Weak ether, balance elsewhere

Readers are encouraged to apply these techniques to all markets. 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

Transports sort of lingering on the upper-end of balance.

See below:

Semiconductors have found resistance at old support levels so far, and appear to be settled into balance.

The swing lows on ether are looking increasingly weak. A test below 1k seems more likely with each day we linger down here.

V. INDEX MODEL

Bias model is RCS bearish after being e[RCS] bullish last week following two neutral weeks. Before all this we had two consecutive weeks of extreme Rose Colored Sunglasses (e[RCS]) bullishness.

So the count is at three e[RCS] in recent history.

There were five Bunker Busters in recent history — eleven weeks ago, twenty weeks back, twenty-seven weeks ago, fourty reports back and forty-two reports back.

Here is the current spread:

VI. Six month hybrid overbought

On Friday, November 11th Stocklabs went technical and hybrid overbought on the six month algo. This is a bullish cycle that runs through Monday, November 28th . It runs a bit longer due to a trading holiday for Thanksgiving.

Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“I saw an angel in the block of marble and I just chiseled until I set him free.” – Michelangelo

Trade simple, extract the edge

Comments »