The NASDAQ printed its second consecutive trend down Thursday as the final month of 2016 gets underway.

A broad swath of tech names were lower including Facebook which was down nearly -3% after Citi desk commentary highlighted 3 items potentially impacting the stock:

1. Crowded Tech/Internet favorites and high beta names continue to unwind today
2. Boutique research firm was out w/ negative data points yesterday (forecasting a deceleration in North American and European revenue growth, but estimates are in-line with the Street.
3. Hearing mgmt has been out marketing last couple of days, but no takeaways yet.

Starbucks was doing fine all day but is being pillaged after hours on news that CEO Howard Schulz will step down (again).  Since he came back once and save the company, and since they made the fatal error of doubling down on their growth scheme in China, investors are dumping shares like tea party hooligans.  BEARISH EXTREMELY BEARISH for Starbucks.

The entire healthcare sector is in shambles as investors begin to accept and digest the outcome of American President.  The sector is down nearly -2% to start December with the biggest losses coming in DRUGS…the industry riddled with schemers gaming Obamacare for big time bucks.

All of this mayhem, and more, started surfacing yesterday, we talked about the hows and whys (NASDAQ/RUSSELL leading lower, methodical nature of order flow, etc.) in this post and how it was likely to continue into today and Friday.

My conviction is even stronger, for weakness that is exasperated by Nonfarm Payroll to resolve in a rather horror show Friday for all you post-holiday gluttons to chew on.

 In summary, and with a modicum of joy for the return of volatility, NASDAQ and its components tell a tale of worse before better.

Bearish through the weekend then DEVELOPING…

 

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Well hello, you there, with the electronic device staring you in the face, come have a look inside my laboratory:

These lines are an extension of my brain laced with Fly’s computer brain inside the Exodus time machine.  The two form a symbiotic bond that does an okay job of forecasting 1-week’s worth of stock market behavior.

You see, my brain doesn’t work like a normal humans.  It compartmentalizes things to make sense of it all.  Order from chaos, if you will.  Sometime a big pool of chaos is compartmentalized, even if only temporarily.  Like my tool shelf which, for the last three or so years has simply been the zone where tools are placed.  Many others are commissioned to use my tools and over time it became a royal mess.  But in my brain, tools went there.

I spend the better part of Saturday tearing open that royal cluster fuck of a shelving mess, disposing of the useless and further compartmentalizing the tool zone.   It now has several distinct and logical zones for specific tools.

Now, when I need to work on one of my robots, I can quickly access my drivers, for example.  They’re all in one bin.  Over time the shelves will become deschevled again, but a strong baseline has been established which will ensure future tidying jobs will be exponentially faster.

Logic, cold and dead, tends to be my cranial path to nirvana.

What can be done with the tangible (tools and screws and such) can be done with the intangible, like market information.  The key is to dispose of the information which is garbage (most opinions and news) and to compartmentalize the enormous pool of quality data (ticks and orders and bits).

Data, assigning numerical values to the very human interactions that take place on the exchange, is our best attempt to understand the markets which infallibly carry the ubiquitous risk of pandemonium.

And that’s why you need to consistently exercise your ability to steel your nerves and rely on the cold and dead, objective judgement.  Then, when you need it most, your mental muscles are fit and prepared.

Ryan Holiday (one of the greatest thinkers of our time) says learning from your own mistakes is the easy part; learning from the mistakes of others is the real challenge.  He also did this write up on John D. Rockefeller, which is an example of poise amid mayhem.

As year-end approaches, the groundwork needed for success becomes paramount.  The behind-the-scenes hustle that makes the up front game look simple, even perhaps easy.

Friendly reminder: Tuesday is December 1st.  Feel free to yell out your window.

The Exodus Strategy Session is signalling calm market conditions for the upcoming week, barring any major disruption.  That means you ought to have plenty of capacity to tackle that project you’ve been meaning to do.  I’m giving you permission to shut down the machines and get it done.

Godspeed lads.

Exodus members, the 107th Edition of Exodus Strategy Session is published.  Go check it out!

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Since a few of you are starting up your alcoholism already, ensuring your place at Thanksgiving dinner as the insufferable racist Uncle who smells like mutt shit, let’s take a look inside the Exodus Strategy session (ESS), shall we?

BEHOLD, An Executive Summary tailored for the clear and sharp:

Somewhere around June 2016 an adjustment was made to the index model inside ESS so that an extremely high reading (triggered when ‘bias score’ > Exodus Fundamental Score) becomes a bullish signal.

Also, as of tomorrow, close-of-market the Exodus 36-month Hybrid Overbought cycle, WHICH IS BULLISH, will complete.  How sublime, when my model, Exodus, and The Turkey Gods all converge into a bullish signal?

Quite sublime really, the feeling of equanimity as all the distracting noise melts away.

I hope one day some of you can simplify your approach to trading, allowing only that which is raw and market generated to shape your bias.  To attain this clarity in all of life’s decisions, really.

“Willing acceptance, now at this very moment, of all external events,”

In Summary, with Love and Grace from the turkey gods, Exodus wins again.

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Our fearless Leader is at it again, revealing delicious and powerful products that will free us from the tyrannical Big Oil regime.  And while Big Oil and their goons in blue teargas and fire hose protesters of the nonsensical Dakota Access oil pipe, Elon (all Praise and Glory to The Leader) is on the fast-track to creating an energy independence option for freedom seekers around the world.

On Thursday, November 17th after shareholders cast an 80% vote in favor of the $2 billion merger of Tesla and Solar City, Musk (all Praise and Glory to The Leader) said the solar roof was likely to cost less than a normal roof.

“It’s looking quite promising that a solar roof will actually cost less than a normal roof before you even take the value of electricity into account,” our Leader said.  “So the basic proposition would be, ‘Would you like a roof that looks better than a normal roof, lasts twice as long, costs less, and by the way generates electricity?’ It’s like, why would you get anything else?”

Indeed, why would you consider installing any other roof?  Soon the suburban landscape will be transformed into a grid of energy generating glass roofs.  The future is looking bright, thanks to the fast-paced disruption being speared into the hearts of earth-hating oil elitists by our Leader.

Tesla is offering a logical way for every home to generate its own power.  Said roofing material will be built in Buffalo, thus aligning America’s Most Innovative Technology Company with Premier Trump’s call to Make America Great Again.

While the company is hesitant to reveal the actual cost of the roof, we can all rest assured knowing Elon (all Praise and Glory to The Leader) says they will cost less than the installation of a conventional roof.

Writer’s note: I am long Tesla shares and continue to buy Tesla shares regularly.  I may initiate a position in Solar City as well.  Finally, I believe Elon Musk (all Praise and Glory to The Leader) is a mortal deity who will save planet earth from the oil patriarchs before he achieves immortality and roams outer space.

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Good day fellow iBankCoin readers.  It is with a draconian approach to investing and trading that I report to you from the confines of iBC laboratories.

I’ve sentenced any chaff analysis to death, simplifying my review of the stocked market to the point of equanimity.  For you see, without a calm mind, abject distractions like fake news can sully your decision process.

Business decisions must confront the brutal facts, turning over life’s stones and examining the creepy crawlers beneath.  It is my belief that any rational person can make the right decision if presented with the facts.  The key is sourcing objective information, which is why the Exodus Strategy Session focuses entirely on cold/dead/raw market-generated data.

Bear in mind, these are not rational people and their tainted minds will make it exceedingly difficult for them to make one quality business decision, let alone form the pile of good decisions necessary to become great.

Also bear in mind, that while Hamilton may not be your idea of quality theater, if you actually listen to the words the theater man said–they were quite positive.  The crowd, on the other hand, did what they do best–boo and sneer and lose elections.

iBankCoin labs will press onward.  The 106th Edition of Strategy Session triggered a signal on the index model.  It’s calling for a calm drift, with a slight upward bias.  Said objective reading comes ahead of Thanksgiving, the special day where Americans celebrate the most successful refugee takeover of a nation ever.  Europeans moved on USA and filled it with their ideals, eliminating the original people and crisscrossing their pens with nonsensical oil pipelines.  A fucking sham, to celebrate our migrant hoards while demonizing the Muslim hoards.  Blind hypocrisy.

Nevertheless the Turkey Gods and our mortal Lords of capitalism, the Black Friday retailers often come with tidings for investors in the USA stock markets.  So a bullish index model signal paired with Thanksgiving’s bullish proclivities sets the table for a feast of grande proportions.

EAT UP YOU SAVAGES.

and GOD BLESS AMERICA

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We’ve discussed these before.

“Go with” intra-day, be cautious of inflection point high over next few days.

Carry on

 

 

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Next week sets up November, which sets up Thanksgiving, Black Friday, the “Santa Claus” rally, Christmas and year-end.

And while the outcome of the election is likely to impact the market, the auction theory model, a working model built inside Exodus using cold logic and dead numbers, is providing trading insight for next week.

Writers note – I always take my signals, even through major world events.  The huge gap down post BREXIT, for example, turned out to be the best performing Exodus buy trade so far in 2016.

Since we have Free Exodus Trials going on this weekend, here is this week’s Executive Summary, a STOCK MARKET PREDICTION based on probabilities and past observation:

ELECTION PREDICTIONS:

Hillary wins.  Perhaps my microcosm skews my expectations but easily 8 out of 10 people I know will vote HRC.  Also, even WikiLeaks founder Assange admits “they” won’t let Trump win.

Following the election she will be indicted and removed from office.  The jig is up for the Clintons.  Kaine will be president.

POST ELECTION PREDICTIONS:

There will be no revolution from the rad-right.  Winter will suffocate their fires.  They will return to their manufactured homes and opiate addictions.

Big Pharma will continue to thrive and surpass Big Oil to become the largest lobbying group in Washington DC.

Venture capitalists will continue to front run public investor interests, greedily hoarding the best investment opportunities in the world (like Uber, DJI, or Snapchat) until they are ready to cash out onto the fucked-five-ways-to-Sunday general population (see GPRO or TWTR).

Medical costs will continue to rise, but so will subsidies so fret not unless you believe imagined realities like national debt matter (see central banks).

ISIS will continue to grow with support from the shepherd princes of Qatar.

In short, life will go on.  Modus operandi.

I hope you enjoyed the show.  I realize most of my readers did and also that my real life friends and family unanimously stuck their heads in the sand.

SIDE NOTE ON ALL THE WIKILEAKS:

The food emails from Podesta and team being code for child trafficking nonsense?  Stop, you all look like demented crazy folk.

The “Spirit Cooking” paranoia of devil worshiping?  Come to Detroit sometime and I’ll show you some bizarre events—it’s hedonistic entertainment.

Podesta’s brother does sound like a sick fuck, with his dick out Jesus painting and room full of nubile portraits.  His preferred wall decor isn’t just a conversation piece for cultured socialites; he’s a creep.   Whether John is also a pervert is hard to say, but I’d imagine there is some defect in their lineage.

The only revelation that came from WikiLeaks is the $1,000,000 gift to the Clintons in 2011 when Hillary was in the State Department.  Liberals will condemn Trump for having “white supremacist” people retweeting him, but have zero qualms with an oppressive country that publicly lashes/stones gays, a country that mutilates female organs to eliminate pleasure regions, supporting Hillary Clinton.

Who has the bigger obligation to bad people?  The one with the retweets, or the one with a million dollars?

Use your brain.

HISTORICAL MODEL SCORES:

RECAP OF EVERY BUNKER BUSTER ON RECORD:

9/11/16

All major indices came into last week gap down and rallied higher all Monday.  This marked the weekly low.  Then, for the rest of the week the NASDAQ worked higher while the other indices went sideways.

6/19/16

We came into last week gap up, well above the weekly ATR band on every major U.S. equity index after polls and other data came out suggesting the United Kingdom was likely to vote against leaving the European Union.  An early Monday rally was faded and we ultimately closed on the session low—but the gap into the week remained.  This low held through Thursday the markets rallied hard into Thursday afternoon.

Friday, overnight, we learned the UK voted themselves out of the EU, and the market fell nearly 250 NASDAQ points off the high.  The open on Friday featured a strong reflex rally right up to the gap we left behind two Friday’s back.  From there the market rolled over, traversed the entire reflex rally, and closed out on session low.

5/15/16

Major indices basically tested higher early in the week, tested lower later in the week, and balanced out by Friday.  Most indices worked slightly higher through the balance with the Dow Jones Industrial Average lagging behind.

1/10/16

Last week started with a gap up that was faded. The selling pressure Monday was mild and the market ultimately discovered a strong responsive bid by the end of the day. Tuesday opened gap up, tagged the upper ATR band, then slowly rotated lower to close the gap down. Again, a strong responsive bid was discovered and the day closed strong.

Wednesday, after opening with a small gap up, price reversed lower and had a slow grind lower through the morning and lunch hour. The selling accelerated into the afternoon and we ultimately printed a trend day down.

Thursday the selling continued through the early morning before again discovering a strong responsive bid. We spent the rest of Thursday trending higher before sellers stepped in at the end of the session.

Friday saw a pro gap down to a new weekly low. The action on the session was balanced and ultimately formed a decent-looking excess low before reversing and closing above session mid.

12/20/15

Equity indices started the week gap up and after an early fade lower price spent the rest of the holiday shortened week trading higher. Equity products closed for trade at 1:15pm on Thursday, Christmas eve and remained closed Friday in observation of Christmas day.

12/13/15

Markets started the week gap down and sold fast. By the afternoon responsive buyers stepped in. Tuesday the market opened pro gap up and traded in balance. The balance continued up to the FOMC rate decision Wednesday afternoon, after which we rallied.

Thursday we gave back all of the rally from the FOMC event and Friday sold hard, taking price back to about where the week started.

11/15/15

Equity indices started the week with a small gap down and trended higher all day Monday. After a balanced session Tuesday, price spent the rest of the week trending higher.

Friday price appeared pinned into a tight range but overall carried a slight upward drift.

8/22/15

Arguably the most eventful week of the year, stock markets started the week with a major gap down. The NYSE invoked rule 48 before opening bell [it was also invoked Tuesday and Wednesday] in an attempt the quell volatility.

Price drove lower off the open as several stocks and ETFs became dramatically mis-priced. Price sharply snapped higher and by Monday afternoon the Nasdaq was about 275 points off the low. By the close Monday most of those gains were given back. Tuesday opened gap up, buyers made an early push, but ultimately price rolled over, closed the overnight gap, and closed near session low.

Wednesday price opened gap up, sellers pushed into the overnight inventory but struggled to fill the gap before buyers came in and closed price near session high. Thursday price opened gap up and churned with a slight upward drift and Friday price drifted sideways, marking time.

There were four neutral days in a row this week on the Nasdaq. Quite the rare event.

8/9/15

Price came into the week with a big gap up. Buyers kept the pressure on most of Monday before finding responsive sellers late in the session. Tuesday price opened gap down and after some aggressive posturing from buyers and sellers we liquidated lower. The selling continued overnight and Wednesday we opened to a 3^rd big gap, lower, and sellers pressed for most of the morning.

Before lunchtime Wednesday buyers responded and began buying. The indices threw down a classic smoke screen with the Nasdaq going range extension down while the rest diverged. After bouncing off the lows, strong reversal and trend higher pressed for the rest of the day. Thursday and Friday were quiet, summer grind-type sessions.

06/14/15

Stocks came into the week with a big gap down and spent the first half hour liquidating lower. Price managed to exceed the prior week’s low before responsive buyers stepped in. At that point the auction reversed and price began working higher. Price continued higher into Wednesday morning before sellers worked in ahead of the Wednesday afternoon FOMC rate decision.

The third price reaction was a buy after the decision which led into a trend day up Thursday. Friday price faded lower but we ultimately closed higher on the week.

3/8/2015

Equities started the week with a small gap up and drifted higher for much of the session before finding responsive sellers (responsive relative to Monday’s open, initiative relative to the prior week’s breakdown) who knocked stocks off the highs. Then Tuesday price opened to a large gap down and trended lower for most of the session. The selling carried into Wednesday and Thursday price went gap up and traded higher. Friday bulls tried to build from their bounce but were overwhelmed by selling which took out Thursday’s swing low before finding a sharp responsive buy near the end of the day

2/1/2015

Stocks opened for trade Monday with a slight gap up and promptly sold off during the first 45 minutes of trade. Price exceeded the swing low from the prior week before finding a strong responsive buyer. The reversal continued into the afternoon and throughout most of the week. This action carried us to the high end of our intermediate term range.

Early Friday morning the markets continued higher after a stronger-than-expected Non-Farm Payroll report and revisions to the prior month. The move stalled out by lunch time and we saw sellers enter and push the market lower slightly to end the week.

1/11/2015

Prices worked lower across the index markets for most of the week after coming into Monday with a small gap up. Volatility was already elevated but truly increased on Tuesday when an early rally was rejected sending the market careening lower. Many large banks reported earnings throughout the week and one after another traded lower [see: WFC, JPM, BAC, C, GS, PNC].

Then, early Thursday morning [premarket] the Swiss National Bank announced it would remove the cap it had in place to prevent the Swiss franc from rising too high against the Euro [Source: Bloomberg Businessweek, click here]. The Central banking move drove one of the biggest shakeups in foreign-exchange history. However, US stock indices showed signs of short term stability and held value.

12/14/2014

After closing the prior week (12/12) on a weak note, going out at the lows, equity markets were gap up Monday morning. The globex buyers were quickly tested Monday when markets sold off and continued lower through Tuesday. By Wednesday morning we started seeing signs of buyers as we went into the afternoon FOMC rate decision and Yellen press conference. The news received a positive reaction and enticed more buyers into the market. Thursday prices opened to a big up gap and we continued grinding higher for the remainder of the week. Also, the Russell 2000 began showing relative strength Wednesday.

---

 

FINAL RECAP:

Look for a tradable low this week.  Look for Clinton to win.  Look for her to be indicted and removed from office.  Look for life to go on.

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This morning we discussed Tuesday’s failed auction, which is just a name given to an event that sometimes occurs when a market trades.

When one of this chart pattern shows up, I make a big deal about it because on October 2nd, 2014 I made an oath to the good readers of iBankCoin.

And for damn good reason–these failed auctions have been a popular feature at many an inflection point during my young career as a trader.

The last time we had a significant failed auction was back in December of 2015.  We discussed it ad nauseam:

December 2nd, 2015 – Failed Auction May Signal Trouble Ahead

December 3rd – Failed Auction Validated: Hide Your Wives, Kids

December 11th – It All Started With A Failed Auction

Perhaps your short-term memory does not recall what happened later that month and into January…

With regards to our current failed auction, it validated this afternoon.  Consider my bias short as long as price stays below /NQ_F 4816.

 

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NASDAQ futures are coming into Wednesday with a slight gap up after an overnight session featuring normal range and volume.  Price worked lower until about 3am, right down to the MCVPOC at 4805 before printing a v-shaped bounce back to Tuesday’s close.  At 7am MBA Mortgage Applications came in lower than last week’s reading.

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

Yesterday we printed a normal variation down after taking out swing high.  The nature of this move, taking out swing high then swiftly reversing, elevates the possibility of a failed auction, a price pattern that has marked inflection points in recent history.

Here’s a look at the potential failed auction on the NASDAQ:

Note: the same event happened on the S&P 500 yesterday.

Heading into today my primary expectation is for sellers to push into the overnight inventory and take out overnight low 4805.25.  We’re going to test down through our balance and probe the other side of it, most likely, now that the topside has failed.  Look for a move down to 4796.50 before two-way trade ensues.

Hypo 2 buyers show up in the VPOC zone from 4805 – 4795 and we chop about in this region all day.

Hypo 3 buyers show up around 4812.50 and the push up through overnight high 4823.50.  They continue higher, up through Tuesday’s high 4836.75, effectively negating the failed auction.  Look for sellers up at 4839 and two way trade to ensue.

Levels:

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Sitting up here, a touch below all-time highs, it seems foolish to expect a bears to claw the eyes of out of bulls, triggering a disorderly rout. Yet the model I build by hand, each-and-every week inside Exodus [Want to read it? free trials till noon Monday: exodus.iBankCoin.com/free-trial] is suggesting exactly that, a high panic rout—complete with shrinking exits and investors returning to basic flight instinct.

But, not.just.yet.

Do not consider this a bold call, but rather a vision of how the next 10 trading days will transpire.

The Next Five Trading Days

Look for a hard move lower, a shakeout, perhaps a big gap down Monday.  This encourages a strong responsive buy and a reflex rally that lasts through the week and into the weekend.

The Following Week

Everything unravels like we saw at the beginning of the year.

I have no idea if this indeed will happen.  Overall I take it one week at a time.  This week, I intend to cover my SQQQ short into any weakness I see early in the week and also perhaps add long exposure via a Utility or Staple.  These sectors are likely to resist overall market downturns, and if I am wrong about the big down move I see on the horizon, these will prove decent entries.

Then, as early as Friday and perhaps as late as next Tuesday I will re-initiate shorts, perhaps in the NASDAQ or the Russell, and ideally from higher prices.

That is all.

Exodus Members, the 83rd Edition of Exodus Strategy Session is out.  Go check out the Executive Summary at the least, the entire report if you want to gritty details, and let me know what you think in the comments below.

HAPPY FATHERS DAY LADS.  I am proud of you for making adult decisions, wishing you good tidings and gender-neutral bathrooms for your kin.

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