Tue May 7, 2019 8:48am ESTComments Off on NASDAQ choppy but balanced overnight, here’s the Tuesday trading plan
NASDAQ futures are coming into Tuesday gap down after an overnight session featuring extreme range and volume. Price was choppy overnight, real choppy (90 point range, circumnavigated thrice) bouncing along inside of the Monday range. As we approach cash open, price is hovering just below Monday’s midpoint.
On the economic calendar today we have a 3-year note auction at 1pm followed by consumer credit at 3pm.
Yesterday we printed a double distribution trend up. The day began with a gap down that was driven by news from the ‘Trade Wars’ battlefront. A quick poke below last Thursday’s low during the opening two-way auction discovered a strong responsive bid and sparked a drive higher. The drive puttered out right at the weekly lower ATR band 7786.50 and retraced a bit before buyers became initiative (initiative relative to Monday’s open, responsive relative to Friday’s close) and put together a second drive higher, trading up beyond 7800 before ultimately settling into the century mark by end of day.
Heading into today my primary expectation is for buyers to work into the overnight inventory and trade up to 7786.50 before we tighten up and chop for the rest of the day.
Hypo 2 sellers gap-and-go lower, trading down through overnight low 7719.25 to set up a move to target 7700. Look for buyers down at 7683.75 and two way trade to ensue.
Hypo 3 stronger buyers work a full gap fill up to 7807.25 setting up a move to close the weekly gap up at 7865 before balance ensues.
Mon May 6, 2019 8:58am ESTComments Off on Longs liquidated on ‘Trade War’ update, here’s the Monday NASDAQ trading plan
NASDAQ futures are coming into Monday pro gap down after an overnight session featuring extreme range and volume. Globex gapped down into the Sunday evening open and proceeded to liquidate down to a new two-week low before coming into balance. The move is news driven, after the White House went on offense in the ongoing tariff talks with China. As we approach cash open, price is hovering inside of last Thursday’s range.
On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.
Last week was choppy early on, ultimately giving way to sellers Wednesday afternoon and continuing into Thursday morning before finding a strong responsive bid. Buyers then took the markets trend up into all of Friday, closing the week out at the highs. The Russell 200o demonstrated divergent strength throughout the week. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a trend up. The day began with a gap up to near the top of Thursday’s range. Buyers stepped in early on and we began trending higher, with the behavior extending through the entire session and us closing the week out a few points off of all-time highs.
Heading into today my primary expectation is for buyers to work into the overnight inventory and tag 7800. From here we continue higher, up through overnight high 7813.50 before two way trade ensues.
Hypo 2 stronger buyers work a full gap fill up to 7865 before two way trade ensues.
Hypo 3 sellers gap-and-go lower, trading down through overnight low 7667.50 to tag the open gap at 7648.50 before two way trade ensues.
Sun May 5, 2019 10:06am ESTComments Off on Not the kind of May to sell
But feel free to go away.
In general, we would do well to forget about our investments and let them work for us while we build more important things, like our character.
I work hard every Sunday to identify the key elements of the stock market to watch in the upcoming week. Then I define those factors as clearly as possible with pictures and words. It may seem like an odd public service of sorts, and it can be, but it’s also what has taken me to consistent profitability as a futures trader.
Last Sunday it was clear we needed to watch the Russell, and I tweeted as much:
Index Model is included in the Strategy Session every Sunday. The model attempts to predict market direction five days into the future, hence it needing to be updated every Sunday. The predictive portion of the model is useful, but it offers something much greater—context.
When the markets started moving fast mid-week, I had to reduce the number of futures contracts I follow because my analytical computer starts to lag. Since I had done my Sunday homework, I knew what was non-essential; the Dow, S&P, SOX, and TRANX.X. All I needed was the Russell and what I actually trade, the NASDAQ.
At that point, while popular traders were passing around the popular, “Sell in May, go away” mantra, I was simply watching the Russell bounce along its lower ATR band. Why else do you think I was able to add to my Tesla investment with near-perfect precision? An Elon Musk tweet? Please. I am a slave to no man’s word. Take a look at the last five days of trade on the Russell 2000, separated into 15 minute candles with volume profiles (volume at price) for each 24 hour day:
That’s all I wanted to reflect on for a moment. If you’ve ever thought about trading index futures but haven’t been able to sufficiently capitalize an account to handle the notional value of index futures contracts, you’re in luck. Beginning Monday, the CME is launching micro futures on the Dow, S&P, NASDAQ, and Russell. I think every trader should pick one of these markets and trade it exclusively for a few years. It will develop you much further than ferreting from one degenerate stock to the next.
Chop wood and carry water. We cannot just stop doing the things that brought us to where we are. Sunday research, highly concentrated tweets, compassion for others, and pulling lots of weeds.
This isn’t the kind of May to go away from trading. From fussing with your long-term investments? Yes. Do that now and thank me in four years.
I’ll still be here.
Raul Santos, May 5th, 2019
Exodus members, the 233rd edition of Strategy Session will be live by like noon eastern time. Be sure to check it out and for gods’ sake, if you have have questions ask.
Fri May 3, 2019 8:57am ESTComments Off on Trade data strong, Payroll data strong, America, STRONG, here’s the Friday NASDAQ trading plan
NASDAQ futures are coming into Friday gap up after an overnight session featuring extreme range and volume. Price worked higher overnight and trading up near Thursday’s high as we approach cash open. At 8:30am advance goods trade balance and non-farm payroll data came out stronger-than-expected.
Also on the economic calendar today we have ISM non-manufacturing at 10am.
Yesterday we printed a double distribution trend down. The day began with a slight gap up that was resolved during the opening two-way auction before we headed higher and tagged the 7800 handle. Sellers stepped in here and drove lower, pushing us RE down and continuing lower, tagging the 7700 handle before settling into balance. We ended the day chopping below the daily mid point.
Heading into today my primary expectation is for buyers to gap-and go higher, testing up through Thursday high 7805 which sparks a move up to 7830.75 before two way trade ensues.
Hypo 2 stronger buyers tag the naked VPOC at 7840 before two way trade ensues.
Hypo 3 sellers press into the overnight inventory and close the gap down to 7736.50. Sellers continue lower, down through overnight low 7724. Look for buyers down at 7711 and two way trade to ensue.
I was in a spirited mood overnight, satisfied that the stock market had validated my fresh allotment of Tesla intraday by rallying up-and-away from my buy point. Having enjoyed a glass of George Clooney’s Casamigos tequila with my chief scientist whilst watching District 9, I took to ‘the Twitter’ in my altered state and was, of course, fed tweets about Tesla because the algos know what daddy likes to interact with.
You can imagine how lively the troglodytes over at $TSLAQ were yesterday, who’ve been emboldened of late by the normal way $TSLA shares have oscillated from the top of their WELL ESTABLISHED RANGE to the bottom. These people do not understand what Tesla has achieved as a company, yet alone how an auction works.
Auctions spend most of their time in balance. Just when you think a stock is going to breakout, or break down for this matter, it most often doesn’t. Instead it reverses course, and takes another trip back through the range. That is, unless, a major new piece of information sways enough participants to abandon a generally accepted value in search of a new one.
Anyways, here’s what happened. One of these accounts called TSLA shareholders and stakeholders ‘bimbos’. I cannot pinpoint which of the following accounts, because I was forced to delete my response to start a 12 hour timer on my Twitter suspension:
Actually, now that I have typed out these handles, my memory has been jostled loose. It was DReed67. I am going to go out on a limb and assume DREED was born in 1967. Therefore it is likely he has called many a woman a bimbo in his time, and he’s probably, in general, a real misogynistic piece of shit.
Anyways, my response was mean. I’ll be the first to admit it. I replyed, “bimbo, you sound like white trash.”
Which was wrong. And if @jack is reading on a fluke, I am sorry. I am. That was not a nice thing to respond with. And if any of the above accounts, especially the one who reported me, ever wants to come to Detroit, I would be happy to show you around.
Henceforth, let it be know RAUL cannot tweet again from his Twitter handle @IndexModel until 7:50pm EDT. Please show your support for me during this hard time by sharing this post and my upcoming trading report to Twitter. There are little buttons below to assist you in doing so. You know I still love you, even if you don’t share, and LONG LIVE TELSA, LONG LIVE ELON (PRAISE!), THANK YOU @JACK FOR TWITTER.
Also a special thank you to Master Fly for creating this wonderful playground, IBANKCOIN, a bastion of free speech in the battle for financial gains. Hallelujah.
Thu May 2, 2019 1:44pm ESTComments Off on Second quarter allotment secured
I shouldn’t have to announce every time I buy more Tesla because timestamping my entries doesn’t matter—these shares I’ve been accumulating for years and years and years will either achieve a 1,000 handle or trade to zero.
When I choose to make my quarterly allotment is of no concern. If this tree grows, we shalt not know until halfway through the roaring ’20s.
Next quarter we likely won’t be having a blogger/reader experience. I’ll just buy more Tesla, hopefully for less than I paid today (about 240 bucks), and go back to working the NASDAQ.
Henceforth, as prior, let this post serve as a reminder that I am a long-term Tesla investor.
Thu May 2, 2019 8:41am ESTComments Off on Important weekly matters out of the way, here’s the 2nd of May NASDAQ trading plan
NASDAQ futures are coming into Thursday gap up after an overnight session featuring extreme volume on elevated range. Price worked higher overnight after continuing to slide lower for a bit following Wednesday’s afternoon sell-off. Price dropped to a new 7-day low before catching a bid near last Monday’s (4/22) high. As we approach cash open, price is hovering in the lower quad of Wednesday’s range. At 8:30am initial/continuing jobless claims data came out weaker than expected.
Also on the economic calendar today we have durable goods and factory orders at 8:30am followed by both 4- and 8-week T-bill auctions at 11:30am.
All of the important tech earnings are complete for the week.
Yesterday we printed a neutral extreme down. The day began with a gap up into the Monday midpoint. Sellers were unable to fill the overnight gap during the opening two-way auction. Instead price began working higher, pushing range extension up in the late morning but buyers were unable to test beyond the Monday high. Instead we came into a balance formation and awaited the FOMC rate decision. First reaction after the announcement was up, it took out the daily high by a few ticks but again could not test beyond the Monday high. Instead we had a failed auction. Reaction two and three to the FOMC rate decision were down and this triggered a liquidation that probed down near Tuesday’s low. We ended the day near low-of-session.
Neutral extreme down.
Heading into today my primary expectation is for buyers gap-and-go higher, trading up to 7800 before two way trade ensues.
Hypo 2 stronger buyers sustain trade above 7800 setting up a move to target 7831.25 before two way trade ensues.
Hypo 3 sellers press down through overnight low 7732 which resolves the 4/22 gap at 7734.75 (we tagged this level during globex but not during cash) and continues lower to 7728.50 before two way trade ensues.
Tue Apr 30, 2019 8:56am ESTComments Off on Miserable Google quarter spooks NASDAQ, Apple on deck, here’s the month-end trading plan
NASDAQ futures are coming into Tuesday gap down after an overnight session featuring elevated volume on normal range. Price worked lower overnight, trading down into the lower quadrant of Friday’s range before settling into balance.
On the economic calendar today we have consumer confidence and pending home sales at 10am.
Also Apple is set to report earnings after the bell and is almost certain to put some volatility into the NASDAQ.
Yesterday we printed a neutral extreme down. The day began flat and with a tight two-way auction. Buyers began campaigning price higher, taking us range extension up, but were unable to make a new record high before closing bell. Then earnings from Google came out during settlement and the weaker-than-expected data resulted in sellers reversing all of the day’s gains and more, closing us at session low.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7813.50. From here we continue higher, up through overnight high 7816. This sets up a move to tag 7833.75 before two way trade ensues.
Hypo 2 sellers gap-and-go lower, trading down through overnight low 7779 which sets up a test below last Friday’s low 7755.50. This triggers a liquidation down to 7728.50 before two way trade ensues.
Hypo 3 stronger buyers sustain trade above 7833.75 setting up a full reversal of the Google sell-off, trading us up to 7869.75 before two way trade ensues.
Mon Apr 29, 2019 8:50am ESTComments Off on Google earnings after the bell, here’s the Monday NASDAQ trading plan
NASDAQ futures are coming into Monday flat after an overnight session featuring normal range on elevated volume. Price worked higher overnight, probing up near Thursday highs before settling into balance. As we approach cash open, price is hovering at the Friday high.
On the economic calendar today we have the Dallas Fed manufacturing index at 10:30am followed by 3- and 6-month T-bill auctions at 11:30am.
After the bell, Google parent company Alphabet is set to report earnings. This is a NASDAQ moving report.
Last week began with a gap down then strength through Monday and into Tuesday where we saw conviction buying which pressed the NASDAQ to new record highs. The other indices haven’t made new highs yet alongside the NASDAQ, and during the second half of the week, while the NASDAQ mostly marked time, there was a bit more weakness in the other indices.
On Friday the NASDAQ printed an odd-looking normal variation up. The day began with a gap up in range that sellers pressed into. The early selling drive pressed down into the conviction buying from Tuesday, and by 10am responsive buyers (responsive relative to the Friday open, initiative relative to the Tuesday conviction day) stepped in and began working price higher. Price worked higher for the erst of the day, eventually closing the week out at session high and just a few points off of all time high.
Heading into today my primary expectation is for sellers to press down into the Friday buying, look for price to trade down to 7820 before two way trade ensues.
Hypo 2 buyers work up through overnight high 7859.75 setting up a move to target 7870 before two way trade ensues.
Hypo 3 stronger sellers trade down and tag the 7800 century mark. Look for buyers down at 7792 and two way trade to ensue.
Earnings season has been kind to the stock market thus far. The only companies that matter are big tech, and big tech is stronger than ever. Can you believe it’s the year 2019 and people are still investing in oil? Investing in a commodity is not intelligent. Especially a commodity that is losing its natural demand to cleaner alternatives.
If you must invest in a commodity or its ancillary businesses, let it be cannabis. Be aware that commodity businesses are still a patriarchal stronghold, and that the same families who’ve ridden other commodity booms are shifting their fortunes over to cannabis. They know commodity-based businesses require large capital investments, that the growth is slow but incremental, and they’re dealing in basic materials. And the only reason cannabis is even remotely interesting to invest in is because the industry was artificially stifled by policy. Had hemp and weed been legal all along, it would already be another blown out commodity industry with huge, stodgy, leaders cemented in place. Boring. We’d be back to investing in oil.
That said, I have zero interest in cannabis stocks. Go talk about investing into that degenerate industry with your Uber driver.
Have you ever played Monopoly? There’s only one winner, that’s the whole point of the game. I only invest in companies that have a chance to win the proverbial ‘Monopoly’ table of our current simulation. Names that could win Monopoly: Microsoft, Amazon, Tesla, Salesforce, Goldman Sachs, GOOGLE.
I am aware that several, smaller Monopoly matches are taking place, and some 0f these themes are worth investing in. There is a big one that will always satiate the desires of the hyper-wealthy: immortality. The philosophers stone. If a company is promising to keep humans from dying, that’s investable a space I want to invest in. Conversely, I wouldn’t touch drug makers. Drugs are fucking trash. People are finally realizing that they can medicate themselves 2-3 times per day with food. This trend is not going away. The trend in medicating problems away has matured and all that new age fluffy guff the flower generation latched onto is now mainstream, hallelujah. But using viriuses to alter DNA, or building synthetic babies, that is something I will invest in. Cyborg/regenerative stuff is investable.
AI and robotics must be invested into. Robots will liberate the human spirit from its current miserable state of factory labor and driving and being accountants. Mankind will be freed to focus on what truly matters: wisdom, self-control, justice, and courage—the art of living.
These are facts. The arrow of progress is cutting through the air and there’s not much we can do to change its trajectory. Humans don’t want to die. Robots are growing in intelligence. Capitalism is the chosen ethos and in the end of every capitalist simulation there’s only one winner.
Accepting these facts, and forming an investment approach around them requires holding positions for a very long time. These changes happen slowely, then all at once! The approach is strongly inspired by the book Sapiens and if you’re an investor that book is required reading.
Now I warmly welcome bear markets and corrections. I don’t churn my fucking portfolio to bits chasing momentum or go to cash at the lows. I just keep buying companies I think will win given the facts of life.
Listen, I know most of you want to go around flipping stocks for quick gains like some kind of nuance speculator, going back to cash as you wish. I’ve found that behavior to decay both the body and mind. Why not just make highly concentrated bets on long-term winners, with a plan to dollar-cost-average for years-and-years, and patience? That’s the formula for wealth.
That’s all I have to say on this final Sunday in April. Now I am off to chop some wood before attending an elaborate vegan dinner.
Exodus members, the 232nd edition of Strategy Session is live. Check out the notes regarding the NASDAQ transportation index.