I have been keeping an eye on you clamheads from over 10,000 feet and all of you have completely lost your minds.  

Christmas cultivates greed and jealousy.  Like when your friend mails you a professionally made card from his new house, with the hot wife and strong chinned baby.  On Instagram you find out your douche ex-roommate Chad bought the white Range Rover like some hipster cocaine dealer.  Meanwhile you are finally set free from 50 hours of corporate drudgery. With your newfound free time you try trading stocks, not good.  ATRs are blown out and momentum is hyper concentrated into solar.  Defeated, you take to your computer and turn into one of those crazy internet people.

The internet is your haven. Online you shovel feces on strangers without repercussion.  In real life you run into gnarly gents like me–dangerously handsome fellows who can dismember you with words and muscle and brawn.  Fine you want to pop off, but do you see what we are doing here, 6-7 days a week?  iBankCoin is a beacon of hope in an ocean of nonsense.  One does not wander these halls in gym sneakers, stinking up the joint.  Take your angst to Facebook instead.  You can assault your friends and family with our delicious and powerful content.

Twitter is an excellent place to go on a brazen rant.  Just because the company is complete garbage shouldn’t stop you. Why not tell everyone how you really feel about that lipstick wearing cock gobbler Ted Cruz?  Someone might actually join you–misery loves company.

Do not underestimate shopping centers.  Sometimes thrashing people on the internet won’t silence that voice in your head, that voice that you are inferior.  An overworked seasonal employee at Banana Republic makes a great mark.  They will take your abuse, the manager will kindly attempt to remedy your ill mind with apologies and discounts, and you can get another pair of khakis.

Listen up, the Santa rally is coming.  Everyone always thinks Santa will come early.  He never does.  The market makers pinned your degenerate gambols for zeros, effectively severing your attempt to manufacture a little holiday bonus.  Chagrined, you cannot chase solar and it’s the only thing running.  And it will keep running without you.  But cheer up.  Step back, observe the crazy people.  It might just give you insight into your own twisted psyche.  Better yet, live a fringe lifestyle like me, living in the woods and such.

Exodus Members: Did you catch the Strategy Session?  It was produced from high in the atmosphere at hours early enough to encourage clairvoyance.

Loyal Readers: I know you’ve missed me.  I love being missed.  It’s like being licked by puppies.  Fret not, come Wednesday I will be back at the Mothership.  Stay cool out there and keep it sexy.  We have to be upstanding people and really really extremely good looking, especially during the holidays.

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The market is trying to undo the rate hike rally and I couldn’t care less.  Do not forget, through all the FOMC fanfare, that this is a big option and future expiration week.  So all sorts of head fakes and pinning can take hold, much to the chagrin and frustration of anyone micromanaging their book.  So when I heard El Nino was delivering thick blankets of snow I decided to make the trek out west.

Thanks to the Exodus analytical engines I managed to secure risk from much lower prices.  Therefore, it is my goal and aspiration to make my money work while I send myself barreling down the steeps.  Could my gains be erased?  In a year like this, sure.  Again, I’m not caring so much.

The seasonality winds are at my back, the snow is thick, and I worked hard all year.  Therefore, being sendy is a 24-7 gig for the next 5 days.  If I come across any wisdom whilst in the mountains, I will impart it upon everyone via Twitter.  So bruhs, if you want updates from the peaks, follow me on twitter @IndexModel.  And if I am feeling frisky some pics and vids will show up on Instagram at ‘Ind3xModel’.

While shredding the most gnarly ways I can imagine, I am wishing you all the best into week-end and OPEX.  Be aware of the famous forces this time of year that are out to get you.  And keep it sexy.

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You want to keep the mind game simple when trading.  I have concentrated my technique down to bias, hypothesis, level, then trade.  I have done my best to codify bias with Switchboard.  Below I highlighted the two major cross currents which are in conflict and make me question my overall short bias:

Having the wrong bias means you are only looking for small scalps on the side that is running while trying to press position trades in the side that is being run over.  This makes trading NASDAQ futures suck, but it usually does not end up a losing endeavor.  However it carries more significant implications for the 10-12 day horizon.

Back on Friday I was buying longs by the afternoon for the 10 day hold via the Exodus Hybrid oversold.  Then, seeing us trend down into the close I relied on market profile theory to ensure me the high probability I could re-initiate my longs at least one tick below the Friday low.  The logic played out, but all the sudden I was not interested because Oh shit short caution was activated on Sunday AND all things considered the Switchboard bias was short.

So I missed my swing entry.  Therefore I ask two questions of you, if you are willing to help me.  I know most of you root for my demise. but a few on the same journey as mine are allies.

QUESTION ONE: How do I handle mixed signals?
A. Completely separate behavior – use Exodus for swing and my model for working NASDAQs
B. Do not trade – too mixed a message, just do nothing
C. Shit can the model
D.Rely on the Context Synopsis (final call of Switchboard) and fiddle with the amount of weight each item earns (i.e. Exodus 5 instead of 4)

QUESTION TWO: Does anyone have a better name for the Oh shit signal?  I am so sick of calling it that.  Offer a new name in the comments below.

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The drone strikes shall continue. The ISIS ideology will be destroyed one 400 pound payload at a time.

On the home front, citizens of modern civilization need to ratchet up procreation 4-fold. We need to fight these bastards.  We need numbers.  Get busy.

Refugees are a huge problem.  I have no idea how they should be handled. My old man made it to USA because Italy was shit post WWII. I imagine normal people in ISIS-ruled lands want to get out. But I also feel like USA is the last great nation—it makes me selfish, and I want to lock her down.

Stock markets—yes, we have to talk about it. This is going to introduce volatility.   We need to remain objective and watch for extreme sentiment.  As traders it is our job to survive and, yes, profit. Be aware of your own emotions and if they are affecting your ability to execute.  You can always go to cash and regain your balance.

I am looking forward to another Investor Conference. I think Jeff’s presentations on Understand Market Dynamics and Trading Through Different Market Conditions are crucial during an international crisis.

My thoughts are with the people of France. Terrorists shot up and bombed an Eagles of Death Metal concert. I have been to several of their shows and they attract people like me—weird, fun-loving rockers.

The terrorists want to break the modern world and bring us back 500 years by restoring the Islamic Caliphate. They will lose. In 100 years ISIS won’t even occupy a half page in the history books.

“Ideals are peaceful. History is violent.” – Fury

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Over the weekend I discussed some of the biggest hurdles in trading with a few of the conference attendees, and I paid particularly close attention to emotional (irrational) decision making.

Having a trading plan is great but sticking to it will make the difference between making the turn to consistent profitability verses conceding your fate to the latest indicator or guru.

It is extremely unlikely you have the resources to influence the market you are trading. There is no way you can control the collective behavior of other participants. That is why it makes no sense to worry about the why behind market behavior. Your energy can be better expended cultivating your own mind.

They are learning so much about the brain these days and tons of research and books are written on the topic. Here are a few books I have found valuable so far. These are links to Amazon and if you buy a book directly from these blue hyperlinks I will make like fifty cents:

Mindfulness: An Eight Week Plan for Finding Peace in a Frantic World – Intro to meditation.  It gets a little hippy dippy at times but overall solid.

As A Man Thinketh – This book is old.  You can read it in a single morning.  Can be slightly off putting at times with Jesus talk, but it is limited.

Mans Search for Meaning – This is about surviving inside Auschwitz.  It will put all your first world problems into perspective.

Switch: How to change when change is hard – Lots of good case studies and research.  It was a hard read for my ADD.  I recommend the audio book for this one.

Ubiquity: Why Catastrophes Happen – More about the omnipotent presence of extreme outlying events.  Great for preventing being stubborn, especially when an indicator or signal keeps being wrong.

bird by bird – I bought this one to improve my writing but along the way my mind was expanded.  Check it out.

Meditations – Random applications of stoic and Aristotelian philosophy by Marcus Aurelius aka the last great emperor or Rome.  This translation is considered the cleanest and most actionable.  These ancient writings are older than the Bible.

The Art of Learning – This is written by the boy genius chess player who went on to become a world champion in fucking jujitsu.  Really solid stuff.

The Chimp Paradox – Get to know your inner cave man; the idiot who wants to smash computers with his fist, and how he may not be very useful in modern society.  In Switch (above) they call it the elephant.  Great pair of books to read together.

Bhagavad Gita – Another set of writings predating the holy Bible.  This one pairs well with a small dose of LSD (I do not advocate breaking laws).

The Legend of Bagger Vance – I linked to the movie.  Save time, just watch the movie it does a pretty good job as long as you can stomach a Matt Damon performance.

Gita on The Green – This is something.  After you realize Bhagavad Gita is super confusing and you have watched Bagger Vance, this book ties to the two together in an epic way.  Great for you golfing types.

The Psychedelic Explorers Guide – If you even remotely took my LSD recommendation serious, read this book first (and do not break any laws).

The Nature of Things – More ancient philosophy.

Sophies World – If philosophy is not your thing, read this lovely fiction instead.  This is one of the best selling books ever and translated into 100s of languages.

The Power of Habit – Another book with lots of great case studies and research.  Definitely top 3 in usefulness and application to trading.  I love the part about scripting critical moments.

The Obstacle Is The Way – Ryan Holiday is probably younger then you and has accomplished incredible things.  He is also a modern day stoic.  This one is tough loving and more effective then coffee for waking you ass up.

Those are all the books I have worked through so far.  Some  I read halfway then shelved for now.  Others (like Meditations) I read over-and-over.  Has a book improved your trading or outlook on life?  Please, share it below.  I need more!

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One of the core reasons to build a market model is having objective data to analyze when it generates similar readings.

Coming into this week the score was extremely high into the territory where I call for the short bias. Until a few hours ago that bias treated me well. But there was another hint in the data—at extreme readings the market tends to drift sideways.

Therefore I came into the week expecting very little price discovery. Think about how useful that is. It tells me the good trades are on the outside of the market, to fade extremes back to the mean. That is valuable information for a NASDAQ trader lads.

The conclusion I drew from the objective evidence was as follows:

Market model has short bias, but an extremely high reading. The prior two instances of extreme numbers lead to range compression and upward drift.

My model is not the best, but it is the best for me and my trading style. I encourage you to build one that suits your approach. The reward is well worth the effort. A word of caution—garbage in, garbage out is true. That’s why I only feed my model a lean diet of Exodus Market Intelligence and raw (organic) IQ Feed.

I look forward to watching my model grow and mature. Next Sunday will be its 49^th sample. My baby was born just after last year’s iBC Investor Conference, remember?

Join us Saturday. It’s not too late. #iBCNYC will put you in a position to win.  This is not a silly festival. It is a rare gathering of incredible minds. Don’t be shy. Behind closed doors more Wall Street elites are quietly joining our ranks. You should too.

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Many of you made the intelligent choice to take us up on free trials of Exodus yesterday.  I worked late into the night, granting access to plebeian, populars, and optimates alike.  You’re all equal to me, all cut from the same cloth, all citizens.

You were treated to a spectacle that is somewhat commonplace around these parts—seeing our algorithms nail an inflection point to-the-day.

Hopefully you knew enough about what you were seeing to form an objective bias heading into today and used that objective bias to procure some risk.  If not, don’t fret, I can be a friend to you.  You see, “The Fly” keeps me around not just because I am on track to be the best futures trader ever, but also because I educate people on how Exodus works.

Schedule a live demo with me, dude.

Finally, if you want in on the trial you have a few days left.  We’ll let you in through Sunday, you just have to send your interest to our request hotline [email protected].  Go do it now, and when I return from the local torture purveyor (dentist) I will hook you up.

Ciao mates, I am without hedge, gas peddle firmly wrenched into the floor.

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The fast and corrective markets of late are a welcomed climate.  I open my arms wide and high, advancing to embrace the cold corpse of volatility.  I was forged in these conditions coming into the game fresh faced back in 2008.  The markets feel more normal and accurate now than the last two years.

What was that even?  A slow drift higher guided by a gentle summer breeze price action?  That was no place for me, a disheveled secret agent of sorts, affixed on extracting the knowledge of unaware old men before they perish.  NOTE: the strictest adherence to the 47.5 and up policy applies.  If I suspect one meets this threshold, then I begin my process of stealing their lifeblood.

Odd, I agree, but how else does one become wise to industry?

Let’s change gears and talk about how I am an ignorant buffoon who moves far too slowly.  My autonomous trading algorithms are still in testing as I wrap up the ‘odds and ends’ of robo trading.  Algorithms I have spent months building, years thinking of, and weeks testing for THESE VERY CONDITIONS, are still in the laboratory.  Have a look at what Elroi was doing today:

 

 

There is a very simple plan for deploying elroi into the market-early range extension.  Anyone who wants to inch closer to my classified potion now has another piece.  Early range extension and I fire up the algo and go eat iced cream whilst driving a go cart and listening to 47.5 and up rock musics.

On the flipside, this is what I was doing today:

 

Chasing waterfalls with by groin brain…

I front ran both of my secondary entries because a bounce felt suddenly imminent about 4 times today.  We closed below both.  This isn’t to say I no longer desire to hold these positions because quite the opposite is true.

I have convinced myself (and others) that what we are seeing, RHRN, is a dirty trick.  With April options running rich, it was time to secure some premium, just as we must every month before option expiration.  In the hood they call it the overplay for the underlay.  I do too.

So I fret not, really, even while the world around me degrades into a disheveled mess.  If I want to see real death and decay then I can just drive down to Mound and Caniff to see the most destitute shitholes this nation has to offer.  Crumble around me bro market seriously, I shine in the rough.

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Yes, it felt like the NASDAQ buyers were eviscerated today and yes my concoction of a long book gyrated almost 6% peak-to-trough—but I don’t feel surprised.  We opened for trade in the middle of a volume cave way the hell out of balance.  Price gapped higher, filled lower, found buyers at the base of the cave, quickly auctioned in the opposite direction (we’ve discussed the nature of this type of move) back through the cave and higher.

This is where the surprise hits…

Overhead supply begins selling into the up move, we slash through the opening swing like butter, down through the cave and over the hill to grandmother’s home.  The action was so dynamic it set a lower high and a lower low.

I was the fighting the tape for a bit, but not as egregious as when the market corrected me in January.  However, I was all over the place today, I had 14 orders.  My broker banked today, without question.

While I did all of this tail chasing to raise some cash and rotate into other names simultaneously, Elroi was robot trading the crap out of /NQ_F going 4-for-5 with all intraday shorts.  Elroi never thought once about going long today.  Eventually he got my attention considering he now talks and blinks like a proper robit!

He’s still in the shop until I completely understand his quirks.

Above I have described my natural auction mind and mechanical robot mind.  Now my brain:

 

Like in the real world, the complete degenerates win.  My pot stocks are winning and LEDs ripping.  I am hunting more deals in every corner of the world.  At my pinnacle, I post my TOP THREE HOLDINGS at literally the moment Twitter, ehm…BREAKS, and I have put a solid jinx on the market.  Meanwhile,  Citron kills fuel cells and every other green tech with the delicious and powerful lemonade.

The game is rigged and I killed Twitter.

Anyhow, I must move on to more pressing matters.  Good day to you.

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Yesterday’s work has been paying dividends this week as it seems keeping my nose to the grindstone has yielded some positive results.  I have five positions up over 10 percent today.  I had six, but I booted the rest of my KNDI shares this afternoon.

My book is concentrating down very lovely.  I currently have 18 positions, but in reality I have only a few.  Let me explain:

LED Stocks – RVLT, CREE, LEDS, and OESX

Weed stocks – HEMP, PHOT, and GRNH

Everything else stocks – TSLA, LO, ONVO, VJET, TWTR, CUDA, and EXK

Call options – BBRY, ANGI, VJET, Z, and newly minted SINA

Yep, I went out and bought one of the lousiest losers on the day, SINA, when I SHOULD have simply waited.  This SINA daily chart is ugly.  I had to accept that.  The weekly chart is a beauty fit for a king.  I went ahead and bought in near the end of day, tossing caution to the wind—something I may regret if this stock doesn’t turn on a dime.

I think there is tilt from losing, and tilt from winning.  The latter is overconfidence, and it took some overconfidence to buy that SINA chart.  Maybe Dougie Fresh Kass will exact some vengeance upon my person for poking him all afternoon. He could go ravage SINA for a few days with short sales. I don’t know he’s on tilt too, you see?

Fortunately, I have lots of cash on hand after a few days of opportunity, 25% cash.  That is a ton of cash.

I sold FSLR to avoid another earning gash.  It looks like it was the right move.  It helped that the stock has a 17% win rate over the last 18 calls.  It will be interesting to see if this guy comes back tomorrow.  If it does, then it could rip all quarter.

What can I say?  I was bitter when I missed the TSLA run from $40 to $160 because I loved the concept back then.  I was not about to make the same mistake twice when the market gifted me with $120.00 entry points.  Haven’t you figured investing out yet?  It’s a god damn popularity contest, just like you hated in high school.  Remember when the dorks weren’t cool?  Then they invented social media companies and the cheerleaders flooded your halls with ticker tape and suddenly said dorks were heading the pep rally?  LoL, welcome back to high school, now who is going to take one for the team and bring ANGI to the dance?

Seriously, investing, like politics, is a popularity contest.  You can hate it all you want, or you can seek out the popular and leech onto them for their scraps.  Raul, being shameless, chooses the latter.

Don’t go goth on me and start shorting TSLA.  If you do, have some couth and be clever, else be ousted by the masses.

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