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Raul3

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

Sticking to my guns

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

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

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

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

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

And kind.

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

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

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

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

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

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

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

And who might that be?

Okay for now,

Raul Santos, May 1st, 2022

And now the 385th edition of Strategy Session


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

I. Executive Summary

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

II. RECAP OF THE ACTION

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

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

Rotational Report:

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

bearish

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

Concentrated Money Flows:

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

But then four weeks ago sellers negated that control.

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

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

The calendar, the moon, the cycles and the seasons

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

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

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

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

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

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

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

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

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

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

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

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

Bias Book:

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

Here are last week’s bias trade results:

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

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

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

Market are most often in balance.

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

Transports still appear to be in balance.

See below:

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

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

V. INDEX MODEL

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

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

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

Here is the current spread:

VI. 12-month Technical Oversold

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

VII. QUOTE OF THE WEEK:

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

Trade simple

Comments »

Third times the charm?

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

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

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

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

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

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

Whatever and moving on.

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

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

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

I shall plan my buys accordingly.

Okay for now mfs. Godspeed and trade them well.

Raul Santos, April 24th, 2022

And now the 383rd edition of Strategy Session.


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

I. Executive Summary

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

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

*Bunker Buster triggered, see Section V.

II. RECAP OF THE ACTION

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

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

Rotational Report:

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

bearish

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

Concentrated Money Flows:

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

But then three weeks ago sellers negated that control.

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

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Signals sort of lined up for a low to form

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

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

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

And I just haven’t been there mentally.

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

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

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

Nope.

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

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

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

No sense in changing things now.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

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

Bias Book:

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

Here are last week’s bias trade results:

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

Still on the edge

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

Market are most often in balance.

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

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

See below:

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

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

V. INDEX MODEL

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

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

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

Third time is the charm?

Here is the current spread:

VI. 12-month Technical Oversold

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

VII. QUOTE OF THE WEEK:

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

Trade simple, don’t be selfish

Comments »

Model pinned bearish // how low can we go?

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

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

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

Things are starting to stabilize.

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

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

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

Crypto charts look somewhat more bullish.

Stocklabs is bullish.

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

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

Happy Easter.

Raul Santos, April 17th 2022

And now the 382nd edition of Strategy Session.


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

I. Executive Summary

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

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

II. RECAP OF THE ACTION

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

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

Rotational Report:

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

bearish

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

Concentrated Money Flows:

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

But then two weeks ago sellers negated that control.

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

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Signals once again crossed

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

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

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

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

Bias Book:

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

Here are last week’s bias trade results:

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

Right on the edge

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

Market are most often in balance.

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

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

See below:

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

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

V. INDEX MODEL

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

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

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

Here is the current spread:

VI. 12-month Technical Oversold

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

VII. QUOTE OF THE WEEK:

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

Trade simple, reign in your impulses

Comments »

Model still wants lower

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

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

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

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

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

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

It looks like we might just make it.

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

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

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

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

GOOGLE. TESLA. TWITTER. And so on.

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

Okay for now,

Raul Santos, April 10th 2022

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


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

I. Executive Summary

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

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

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

II. RECAP OF THE ACTION

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

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

Rotational Report:

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

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

slightly bearish

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

Concentrated Money Flows:

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

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

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Pressing any bets in this market is risky

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

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

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

Bias Book:

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

Here are last week’s bias trade results:

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

Transports on the verge of breakdown

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

Market are most often in balance.

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

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

See below:

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

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

V. INDEX MODEL

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

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

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

Here is the current spread:

VI. QUOTE OF THE WEEK:

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

Trade simple, enjoy the process

Comments »

Cautiously bearish

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

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

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

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

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

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

I’m the fixer. The wolf.

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

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

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

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

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

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

Wow, what an aside.

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

Raul Santos, April 3rd 2022

And now for the 381st strategy session, enjoy.


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

I. Executive Summary

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

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

II. RECAP OF THE ACTION

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

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

Rotational Report:

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

slightly bearish

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

Concentrated Money Flows:

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

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

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

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

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

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

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

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

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

Bias Book:

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

Here are last week’s bias trade results:

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

Big battle for control of Transports

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

Market are most often in balance.

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

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

See below:

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

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

V. INDEX MODEL

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

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

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

Here is the current spread:

VI. 6-month Technical Overbought

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

VII. QUOTE OF THE WEEK:

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

Trade simple, manage yourself or else

Comments »

Keep swinging fam

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

What else, what else.

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

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

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

Fading these fools at every chance.

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

What else.

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

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

What else…

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

What else?

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

That’s all I’ve got for now.

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

I’ll leave it at that for now.

Raul Santos, March 27th, 2022

And now the 379th edition of Strategy Session.


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

I. Executive Summary

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

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

II. RECAP OF THE ACTION

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

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

Rotational Report:

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

neutral

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

Concentrated Money Flows:

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

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

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

April is statistically the most bullish month of the year

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

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

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

We don’t know.

But stats are looking bullish.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

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

Bias Book:

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

Here are last week’s bias trade results:

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

Pivoting the range in semiconductors

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

Market are most often in balance.

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

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

See below:

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

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

V. INDEX MODEL

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

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

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

Here is the current spread:

VI. 3-month Hybrid Oversold

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

VII. 6-month Technical Overbought

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

VIII. QUOTE OF THE WEEK:

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

 

Comments »

Swing away

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

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

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

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

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

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

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

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

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

Swing away lads.

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

Okay for now.

Raul Santos, March 20th, 2022

And now for the 379th edition of Strategy Session.


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

I. Executive Summary

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

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

II. RECAP OF THE ACTION

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

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

Rotational Report:

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

bullish

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

Concentrated Money Flows:

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

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

That Monday Fake-out Was One for the books

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

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

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

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

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

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

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

Bias Book:

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

Here are last week’s bias trade results:

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

Pressing range highs

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

Market are most often in balance.

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

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

See below:

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

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

V. INDEX MODEL

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

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

Here is the current spread:

VI. 3-month Hybrid Oversold

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

VII. 6-month Technical Overbought

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

VIII. QUOTE OF THE WEEK:

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

Trade simple, WORK

Comments »

Pressing through all sorts of little losses

Sometimes one gets the feeling they’re like honest Job. Constantly being put to the test by higher powers who are having an ego contest.

I’ve made no claim of being a gentle human. I work hardt and that means I tear through machines. I broke a hoe last summer. Broke a hoe the summer before that too.

In the last 12-or-so months I’ve lost the use of many pieces of equipment I hold dear. Then they cut my data feed on January 1st and I’ve essentially taken the entire first quarter off from trading.

Maybe it was for a reason. Maybe I’d of blown my accounts to Timbuktu had I been working the opening bell all these winter mornings. We don’t know.

But I do know I’ve nearly rounded the bend on Raul’s cabin-in-the-woods floor project and I bought a new mattress. I bought a new mattress and will be done doing bastard flooring soon and when I’m done doing stupid flooring I may never do another floor again. I plan to ease off the hootch a bit. Get back into hot yoga and naps and maybe swim some laps and certainly get back to work trading futures.

I think all this tension will sort of melt away. At least here in America. As festival/carnival season picks up. Folks will forget about the stupid pandemic, they’ll grow tired of war reporting, and the stock market could start to mellow out into the conditions where I thrive.

Listen I get it. There are a few, extremely vocal accounts out here who would love nothing more than to see total war and chaos and death on a horrific scale. They seem like they are the majority sometimes, but I can assure you they are not. They just make more noise than the silent majority of humans.

Folks just want to be happy and healthy and make money and have good sex.

That’s it.

Soon we’ll remember these feelings and *poof* we’ll be back to stellar vibes and steady gains.

Okay for now,

Raul Santos, March 13th 2022

And now the 378th edition of strategy session.


Stocklabs Strategy Session: 03/14/22 – 03/18/22

I. Executive Summary

Raul’s bias score 2.58, medium bear. Buyers show up early on and begin working price higher. Then look for third reaction to the Wednesday afternoon FOMC announcement to dictate direction into the second half of the week.

II. RECAP OF THE ACTION

Hard selling through Monday. Relief rally Tuesday through Wednesday nearly erased Monday’s losses. Sellers stepped back in Thursday and pressured the tape lower into the weekend but did not take out the lows set earlier in the week. There was a bit of relative strength from the Russell 2000.

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

Rotational Report:

Rotations still looking bearish. Having been clearly bearish for three consecutive weeks, one begins to wonder if a strong bullish set of rotations is coming soon.

For now, bearish.

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

Concentrated Money Flows:

Money flows have been dominated by sellers for the last sixteen weeks.  There have been a few slightly positive skews in recent weeks but nothing strong enough to negate the selling.

Last week’s money flows were again dominated by sellers.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Quad-witching, watch for fake outs

With volatility already high I am heading into the March option expiration skeptical of any big directional moves. There is a tendency for these expiration weeks to make a lot of noise, moving hard one direction only to undo the action later in the week.

We also have the FOMC meeting Wednesday which is a “hot” meeting. We are likely to see a 25 basis point rate hike. However investors will be listening for clues as to the pace of additional rate hikes this years.

Overall it could be a tricky week. There is nothing wrong with stepping aside until more favorable trading conditions arise.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Buyers show up early on and begin working price higher. Then look for third reaction to the Wednesday afternoon FOMC announcement to dictate direction into the second half of the week.

Bias Book:

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

Here are last week’s bias trade results:

N/A (did not update model)

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

Pressing into range lows

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

Market are most often in balance.

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

Transports lost the balance zone slightly above current prices but is still somewhat in balance.

See below:

Semiconductors are really pressing into range low, and in doing so they erased a failed auction buyers had going for them. This thing could go into discovery down next week and take the whole market with it. Or, range will hold. We’re coming into the week right on the edge of a breakdown.

Ether is still compressing into value. This chart could make an explosive move soon. There is certainly lots of energy building.

V. INDEX MODEL

Bias model is neutral after being Rose Colored Sunglasses bearish last week. The model was neutral for three weeks prior to that bearish signal. We were Bunker Buster seven reports back. This is the second Bunker Buster in recent history, with the previous one being fifteen reports back. The Bunker Buster before these recent two was fifty three weeks ago.

Model is neutral heading into next week. No bias.

Here is the current spread:

VI. 12 month Hybrid Oversold

On Wednesday, February 23rd Stocklabs went hybrid oversold on the 6- and 12-month algo. This is a ten day bullish cycle that runs through Wednesday, March 9th, end-of-day. Here is the performance of each major index so far:

VII. 3-month Hybrid Oversold

On Friday, March 11th Stocklabs went hybrid oversold on the 3-month algo. This is a ten day bullish cycle that runs through Friday, March 25th, end-of-day.

VIII. QUOTE OF THE WEEK:

“If the world were a logical place, men would ride sidesaddle.” – Rita Mae Brown

Trade simple, expect chaos

Comments »

Indexmodel flips bearish into first full week of March // here’s how I am playing it

I was thinking back to December today. I went down to Miami beach, to art basel, and I was actually pretty low on cash at the time what with the holidays and just the timing of life, etc, etc.

But I wanted the dang Pudgy Penguins t-shirt they were giving out, and I wanted to drink my fair share of the free gin. NFTs are not all the same. Some do their best to offer utility. I would hardly say Pudgy Penguins “did their best” but I will say that having a free party with hootch is a value to me, because I can drink like a sailor.

Meeting internet people in real life is always weird. This one dude was so hopeful for the penguins and his wife was with him and I told him with cold indifference that we were entering a bear market and it was going to last four years. I saw the fear in his eyes, and his wifes. Who was this pony tailed pretty mother lover? Talking greasy and drinking gin?

A few weeks later I hosted a meetup at the request of Stocktwits. I don’t particularly enjoy hosting these events so I do my best to make it worth while for myself. I put together a presentation called Terrific Bubbles. They give me a mic, and I spent an hour talking about how we were in a raging speculative bubble, and that’s fine, and investing at these levels is FINE. If, and only if you stick to quality. Basically pointing out how buying Microsoft or Apple at the pico-top of the dot com bubble was still a huge win as long as you didn’t fumble the bag.

The same is true in NFT. So so many of them are worthless. Yes. But there are a select few that are absolutely not worthless and are the biggest opportunity for a normal joe to make life-changing money.

Everyone wants to invest in the next Uber or whatever. But actually doing that. In america. In 2022 is not possible. The fucking SEC puts up walls that only allow the already rich to take on these type of investments. Accredited Investors. Series A. B. C. D. Fuck you poor mother fucker you buy UBER or RIVN only when the rich fuckers are ready to cash out onto the public markets.

Serious bullshit. I’d rather spend six hundred fiat to mint a picture of a deer smoking a blunt and shooting rednecks then buying some silicon valley VCs bags on IPO day.

So a few of these NFT projects are the next Meta or Microsoft or something. And anyone can participate. And they potential payoff is massive.

The rest are going to drift very close to about 0.02eth.

My plan for the week is to press longs through Wednesday then take a defensive posture.

If we sell hard Monday-Wednesday, then I’ll likely do nothing. Just sort of sit and take the beating. But if we have some strength early in the week I will look to lighten up on a few things and initiate an SQQQ position. Very slowly. I am not in a hurry to do this. There is a massive rally lurking in the shadows here. We are quite overdue. And there is nothing worse than being on the wrong side of one of those. Both for your financial well being and for emotional health.

Okay for now I have to boogie.

Raul Santos, March 06th, 2022

And now the 377th edition of Strategy Session.


Stocklabs Strategy Session: 03/07/22 – 03/11/22

I. Executive Summary

Raul’s bias score 2.85, neutral*. Bulls put together a rally through Wednesday. Then look for sellers to step back in and pressure the tape back down to recent lows. Watch for CPI data due out Thursday morning to introduce sellers to the tape.

*Rose Colored Sunglasses bearish bias triggered, see Section V

II. RECAP OF THE ACTION

Choppy with a slight upward bias through Wednesday, then sellers pressured the tape through Thursday. Price stabilized Friday and chopped along the weekly lows.

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

Rotational Report:

Another bearish set of weekly rotations. Energy is all over the place. Utilities are strong. Tech and discretionary are weak.

bearish

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

Concentrated Money Flows:

Money flows have been dominated by sellers for the last fifteen weeks.  There have been a few slightly positive skews in recent weeks but nothing strong enough to negate the selling.

Last week’s money flows were again dominated by sellers.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Combining two signals into one cohesive strategy

Rose Colored Sunglasses calls for five days of selling. However, we have three days left in the Stocklabs oversold cycle that began February 23rd. These two factors are what drove me to write an executive summary calling for some strength/rally through Wednesday, then selling pressure into the weekend.

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:

Bulls put together a rally through Wednesday. Then look for sellers to step back in and pressure the tape back down to recent lows. Watch for CPI data due out Thursday morning to introduce sellers to the 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]:

Semiconductors looking murky

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

Market are most often in balance.

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

Transports have a fairly clear balance inside another balance.

See below:

Semiconductors might have balance also, but the Thursday Friday action was seller dominated and that gives the chart a discovery down look. Hard to call it either way. Ranges tend to hold, but the current picture looks right for setting up a lower low.

Ether is also a bit murky. Nice compression/balance. Let’s stick with that until we see a major change.

V. INDEX MODEL

Bias model is signaling Rose Colored Sunglasses bearish. The model was neutral for the three weeks prior. We were Bunker Buster six reports back. This is the second Bunker Buster in recent history, with the previous one being fourteen reports back. The Bunker Buster before these recent two was fifty-two weeks ago.

Interesting…

Model is bearish heading into next week. Calls for selling pressure throughout the week.

Here is the current spread:

VI. 12 month Hybrid Oversold

On Wednesday, February 23rd Stocklabs went hybrid oversold on the 6- and 12-month algo. This is a ten day bullish cycle that runs through Wednesday, March 9th, end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“One cannot discover new lands without consenting to lose sight, for a very long time, of the shore” – Andre Gide

Trade simple, explore new techniques

Comments »

Lines held // potential for wealth creation looking okay heading into March

We’re all enamored with Ukrainian President Volodymyr Zelensky this weekend. Fawning over pictures of his bravery in the face of a battle we don’t understand. He’s not really French beautiful like Justin Trudeau, more of like Slavic gritty handsome. Stalky—perhaps strong on the grapple but not necessarily as powerful in a court of charged up women as a slim and tall type like gentle Joe Biden is. But nevertheless, the fight for the hearts and minds is being won by the Ukrainian propaganda machine and whomever interest it is to win these Goebbel-esqe campaigns has to be feeling pretty good about that.

On the ground, in the markets, the only place (besides masculine beauty) where I am an expert and should offer my opinion, things are looking decent.

Semiconductors and Transports held their respective range lows and that sets up the potential for a run up through range. Pair that with earnings due out of big daddy Buffett’s Berkshire Monday, and the turning of the calendar to March, what with American celebrations of gluttony before giving up their vices for Lent (one of the few christian marketing campaigns I can get behind, thinning those fat fuckers out). And all these events bode well for bulls to win the week.

Of course we also have the Fed doing their semiannual testimony to lawmakers Wednesday and Thursday, but I trust that patriotism may take precedent over inflation concerns and that’s the type of conversation that could put off these heckin’rate hikes Goldman Sachs and the other shithead bankers are pining for.

Our dear Costco is also set to report earnings and we have a non-farm payroll wildcard Friday. All-in-all, this week is likely to offer the trigger happy volatility trader lots of opportunity.

Me, I’ll be taking it easy. I have to put some work into elder raul’s cabin in the woods and perhaps find some time to head over to the local bath house to drink vodka and gain a sense of the spirit of the local Russian community. Then I’ll join the Polish in eating their grotesque paczki donuts. Then maybe do some yogas or move some weights around because good lord I am getting soft. And with farm season nearly upon us, I cannot affordt to be soft.

That’s it. That’s my thoughts heading into March.

It is wise to mute/block anyone who is amplifying chaos. They’re is an elevated risk they will cause errors in your execution. Mute and block those jokers. Throw up the blinders and do your job like a strong horse.

Raul Santos, February 27th, 2022

And now the 376th edition of strategy session.


Stocklabs Strategy Session: 02/28/22 – 03/04/22

I. Executive Summary

Raul’s bias score 3.33, medium bull. Rally into new month. Then watch for reaction to Monetary Policy to put direction into the tape by Thursday afternoon. Non-farm payroll data Friday morning may serve to accelerate or reverse price action into the weekend.

Keep an eye on Berkshire and Costco earnings, due out Monday and Thursday respectively.

II. RECAP OF THE ACTION

Selling pressure through Wednesday then a sharp rally into the weekend.

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

Rotational Report:

Rotations are not ideal, with Discretionary lagging and Utilities somewhat strong. But perhaps a bit of risk aversion is prudent at this time.

neutral

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

Concentrated Money Flows:

The selling skews over the last fourteen weeks was dominated by sellers. Last week we saw the ledger skew slightly positive.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Seasonality

Always a good idea to pop into the Seasonality data heading into a new month. March has historically been a positive month for equities. And with prices having been beaten down since December, the stage may be set for those historically strong April stats to pull forward into March.

Past performance is not indicative of future returns.

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:

Rally into new month. Then watch for reaction to Monetary Policy to put direction into the tape by Thursday afternoon. Non-farm payroll data Friday morning may serve to accelerate or reverse price action 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]:

Ranges in tact (for now)

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

Market are most often in balance.

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

Transports made a sharp reversal after sellers attempted a move down out of the range we’ve been observing. Now the stage could be set for a traverse up through the range.

See below:

Semiconductors same story. Range held. Now we may be set up to explore the other side of range.

Ether had what now can be clearly observed as a discovery down phase. We cannot as clearly identify a range on this chart. There is an old support level, however, that may be converted into resistance. If this happens we could see a whole new set of discovery down rotations.

Worth keeping on the radar that there is greater potential downside risk for this chart than the other two.

However, if we see a strong thrust lower, it could set up a whole new discovery down phase.

V. INDEX MODEL

Bias model is neutral for a third week. We were Bunker Buster five reports back. This is the second Bunker Buster in recent history, with the previous one being thirteen reports back. The Bunker Buster before these recent two was fifty-one weeks ago.

Neutral heading into next week. No bias.

Here is the current spread:

VI. 6- 12-month Hybrid Oversold

On Wednesday, February 23rd Stocklabs went hybrid oversold on the 6- and 12-month algo. This is a ten day bullish cycle that runs through Wednesday, March 9th, end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“The coming of the wireless era will make war impossible, because it will also make war ridiculous.” – Guglielmo Marconi

Trade simple, stay connected

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