Yesterday, June 16th, at 11:30am Eastern someone mashed the ‘risk on’ button with a semi-truck full of money, sending a statistically rare shock wave through the New York Stock Exchange.

THERE IT IS: HUGE NYSE TICK…

Biggest since 5/12 at 2:18pm

We have a big responsive bidder?

— Raul (@IndexModel) June 16, 2016

Naturally, a steam whistle blew on MotherShip alerting me to the disturbance.

The method of detection was NYSE TICK, which achieved outlier levels [3rd sigma, 99.7th percentile].  Let’s not forget, any one of you, that my NYSE TICK is a bit more raw then the packaged bits most traders see.

The best I can do is share my observations of past occurrences of extreme NYSE TICKS because I have not yet coded and tested these observations over a significant sample.

OBSERVATION 1:

You can ‘go with” the NYSE TICK, intraday and catch a rotation beyond where the TICK eruption initially peaked out, putting your risk down around where Fibonacci resides, working the same side of the tape as this whale.

OBSERVATION 2:

The exuberance of the massive NYSE TICK happens near the end of a move.  A crescendo, if I may be so bold.

Herein lies the quandary.  This massive uptick happened 6 days into the hole of a NASDAQ sell-off, a regular horror show of summertime tape.  Something the models inside Exodus kept members clean out of with precision timing, to the week.

See Also – Research Reports from iBankCoin Laboratory Keep Investors One Step Ahead of June Markets

So it was a totally different animal than your normal NYSE TICK.  Now, had it been an extremely negative TICK, sure, party pooper signal, the bear raid is nearly complete.  It’s best we bears clear out, before the Brits catch wind of us with their hounds, horses, and rifles—and make way for a return to higher prices.

For these reasons, and MOAR, I stuck with my NASDAQ short into the weekend.

Trading nerds only: I Snapchat traded [username: VCali] AMZN $707.50 puts yesterday, and ended up scratching the position for a small loss.  Short-dated options on super high price tag stocks suck.  Literally, the suck you dry by the minute.  Had I a less draconian way to short Amazon, I could have seen then position through to the $700 price target.

PS the headline photo was a grab from MikeDiva’s latest video.  It is insane and brilliant:

 

 

 

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So it appears summer did in fact set out to trick the majority of participants.  It really cajoled them into aggressive weekly upside bets only to pull the proverbial rug during Globex.  Now it looks like we are in store for something a bit more direct, a bit more draconian.

Downside without the subtly of German design.  Global citizens, predominantly domiciled in the northern hemisphere, are being worked into a frenzy.  The sun is frying their brains and they are returning to their base instincts–snarling animals emotionally defending their territory and fucking for survival of the species.  Does this really surprise anyone?

We have:

• Russian and English soccer hooligans setting each other on fire
• Gordie Howe passing away [RIP]
• Mass shootings [old hat travesty]
• BREXIT
• One of the least anticipated summer Olympics in history being held in a corrupt, disease-infested 3rd world country

I am sure the Greeks are doing something stupid, as we speak.  All of this, and MOAR, will be plastered across your teevee screens this week.  Congratulations, you’re about to embark on the next negative news cycle.

Distinguished and piker members of Exodus, I have done my best research to keep us one step ahead of these summer markets.  You have, all of you have access to the same information inside Exodus.  Not one of you is a better member.  A more experienced analyst, sure, but together we stand in solidarity as opportunists.  Let’s continue to use the tools built by the benevolent ‘Fly’ aka Plutonium Peatie [rumored to go by Le Fly in France] to keep our decisions objective and consistent.

It is my belief that anyone would make the right decision if presented with the facts–as dirty as they may be.

All of this news, analysis, signalling, and posturing can be TRUMPED by our central bank overlords this Wednesday, so stay sharp!  Keep an eye on the bond auctions.  Watch for more perverted financial deals from Asia Pacific.  And for GODS sake, keep it classy.

Members of Exodus, the latest Strategy Session is out.  Give it a read, if only the Executive Summary.

 

 

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The Exodus Strategy Session has been freakishly accurate for the first two weeks of June.

Think of the Strategy Session as a weekly research report that takes into consideration all the predicitve analytics inside the software.

The report also contains my working auction theory model, which has been running live for 81 weeks straight.

Attention to detail is paramount to any model because garbage in = garbage out.  The minute factors are presented each Sunday, but they utimately help shape each week’s Thesis for The Week.  Think of it like an executive summary.  Below is last Sunday’s Executive Summary:

Raul’s bias score 3.33, Medium Bull*. Look for bulls to attempt higher prices early in the week. Janet Yellen speaks Monday and may try to talk up the likelihood of a summer interest rate hike.

Expect price to roll and head lower as early as Monday afternoon.

* Rose Colored Sunglasses Bearish Signal triggered, See Section IV

Two weeks ago the summary was still bullish, despite the market being on a pistol hot run, see below:

Raul’s bias score 3.58, Medium Bull*. Look for price to continue working higher across all major indices. Keep an eye on the lagging Dow Jones, and whether it plays catch up or attempts to lead us lower. Look for Friday morning’s Non-farm Payroll data to provide market direction into the weekend and into the month of June.

Note: U.S. markets are closed Monday in observation of Memorial Day. For a full schedule on all trading products, click here.

* Rose Colored Sunglasses triggered, but extreme reading suggests calm upward drift. See Section IV

A great deal of passion goes into this research. It is one of two things your good pal RAUL takes seriously.  The other thing is my morning trading report.

The Executive Summary is a 10 second read based on 4-5 hours of research and is one more way you can outsource your analytics to the good folks at iBankCoin Exodus.

BONUS: When I have a conviction bias, I let it be known on snapchat.  For these updates, follow me.  My user name is VCali.

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The theme heading into this week, an early option expiration and tax day (oh joy) is change.

For the first time since the mid-February rally began, we’ve had about 3 weeks of range.  Perhaps this is a time-based correction, the worst kind of correction, one that quells volatility.  But it looks like, according to the tea leaves, we will be testing the low end of our range these next five days.

It is hard to bet against the market in these conditions, but last week the rotations became more fluid for sellers.  As much as I want to take a firm bearish stance, I need to see the sellers become more aggressive, and globex volatility kick back in.

See also: A Decline Has Begun and Should Accelerate This Week

For now, I am cautiously bearish and looking for clues before becoming heavily active with shorts.

Members of Exodus, the latest Strategy Session has been published. Be sure to check it out.

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Long time reader and Exodus Strategy Session member UncleBuccs once noted that he looks for markets to change direction around holidays.  Sort of like the ‘Sell Rosh Hashanah, buy Yom Kippur’ axiom.

See Also: Buy Lent, Sell Easter

Along those lines, and given a slew of data that was parsed and analyzed for actionable bias, I am bearish heading into the upcoming week.

Exodus members and lingering free trial takers, check out the Exodus Strategy Session that was just published for more details about how to trade next week’s action.

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Third reaction Fed analysis, a sophisticated method of identifying the three major rotations after the rate decision, yielded the buy and I went to work vanquishing short sellers.  Participation is limited to the day time frame however, because this market is setting up just like I have envisioned over the last two weeks.

See also: The Dow Is Forming The Wedge

There was a clean improvement from the internals that gave confidence to the long trade this afternoon.  After FOMC, Net Tick improves substantially, blasting up to session high and holding the gains:

Then, despite 4 big sell programs running on the NASDAQ 100, the robots were trumped by two huge buy programs running over at the NYSE.  These you can go with intraday, but tell a story going forward [more on that in a moment, first observe the algo wars]

When NYSE ticks hard, and this is only an observation, it tends to mark the crescendo of a move.

See also: All The Fixings for a Rally

With my last long closed, I have initiated a short position on the NASDAQ, via the QID, a position I will add to should we close out the week strong.

 

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Too far, too fast sentiment is strong both in stocks and oil.

National angst is through the roof.   Warm weather rolled into northern city centers, agitating the populous and stoking the angry political types into riot mode.

Turning our attention to data, which is an objective judgment of the current facts, my bias model generated its highest reading ever.

Typically high reading indicate the lens of index price has been painted a lovely rose hue, skewing investor perception ahead of the proverbial rug pull, the ebb, the down move if you’re not into idioms.

But when the model scores really high [past performance is not indicative of future results] the market has continued higher the following week.

It would be selfish to hoard this data, since you all have supported me on my path to trading excellence.  The other dates logged in the model where bias score has skewed extremely high were:

• 02/22/2015
• 04/27/2015
• 10/18/2015
• 03/06/2016

Here’s every score, to date:

Finally, and the kicker that could trigger an explosive move, we have an FOMC rate decision Wednesday afternoon, WITH a Janet Yellen press conference after.  Consensus is for The Fed to keep its key borrowing rate unchanged at 0.50%.  I could see a surprise 12.5 basis point rise triggering a move higher.

All the pieces are in place for a rally.  Whether or not it materializes is, as always, TBD.

See also: The Dow Jones Is Forming The Wedge

Members of Exodus.  The latest Strategy Session has been published.  Be sure to check it out.  Feel free to ask me anything regarding it, inside Exodus or on Snapchat: VCali

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Frozen vanilla chai latte to my head, I have a short bias heading into the week, but my models are all coming in neutral.

It is worth noting I had a short bias for the last two weeks.  That didn’t work out too hot.  Being cold to this market kept me sidelined while epic squeezes took place in the energy industries.

I missed some action, fine.  The good thing about trades is another one is always coming, just like buses in the city [not Detroit].

I closed my Walmart investment out late last week.  It was sporting a failed auction and I don’t play around with failed auctions anymore.  Plus Macke has been throwing mad shade on their share buyback program.

Anyhow these days, if a swing trade makes money it makes cents [sic] to book it.  I collected a dividend along the way [old man swag].

Enough about me.  Stocks exacted a serious amount of pain on short sellers and sideliners last week.  FOMO is elevated but not radically strong.  Sentiment is tepid, the wall-o-worry is alive and well, but I don’t like it.

I would rather be tactical, speed boating into position trades and jab, jab, hooking my way through the futures market.  In short, I’m cashed up and neutral.

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Morning weakness again proved to be an opportunity as volatility continues to recede from the marketplace.  A brief probe into the conviction buying from last Tuesday yielded a strong reaction from buyers who have managed to carry their control into the closing minutes of trade.

Breadth is impressive, given the flat tape, currently logging nearly 70% up.  Meanwhile pockets of momentum are catching fire across the stock universe, including shares of Solar City which are up over 15% after rumors Elon Musk is interested in making a bid to take the company private.

This is the sort of tape where a big mover like SCTY attracts the attention of many traders, which serves to further stoke the momentum.  These are great times to use Exodus, which does a wonderful job of identifying momentum throughout the day [members, ask me how, set up a demo].

Bulls will take on a win on the week unless some insane reaction takes hold after tomorrow morning’s Non-farm payroll data.  That means my model took a loss. For a second week.

Globex has normalized, ATRs are falling, and stocks are trading on their own merit, eviscerating short sellers along the way.

I am surprised to be saying this, but it looks like we are back to normal and it could last a few months.

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Volatility does not strike when everyone is watching, it waits until bullish acquiescence takes hold.

What better way to kickoff the quiet return of violence then an entire weekend praising the shrewd investing acumen of Warren Buffet?  In case the steady bullish tenor of Uncle Warren didn’t whet your appetite, they had Mr. Wonderful on CNBC Halftime Report, talking about sizing into biotech and energy.

SMH

You all should be disgusted by this show of confidence, this act, this wool over the eyes bologna.  Especially on Leap Day!  A day when greedy men clamor over having an additional 10 hours to make dollars.

That docile morning tape and its gentle ascent were hallmark features of a Rose Colored Sunglasses [RCS] market, a manner of trade sent from the bowels of hell to trick you into adding risk assets ahead of hard downward speed.

I participated in the morning rip because it jived nicely with hypo 2 from this morning’s report, but I didn’t overstay my welcome.  As a matter of fact, never overstay your welcome.

This is not a ‘find your groove and swing for the fences’ type market.  What we experienced to start this year was extraordinary, and if you think it was just a flash in the pan, then you are being naive.

There will be aftershocks and rumors of fund liquidation.

But for now the water temperature is slowly rising, boiling the frog ever so gingerly.

Rips are to be sold until further notice.

 

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