NASDAQ Probes Below Thursday Trend Overnight During Active Session

NASDAQ futures are coming into the week gap up after an extended trade featuring normal range on elevated volume.  Price worked lower overnight, briefly trading below the low set early last Thursday before the day became a trend up.  Responsive buyers stepped in soon after price tested below the Thursday low and the rest of the session has been spent working higher.

The economic calendar is light during the holiday shortened week.  The only items on the docket today are a 3- and 6-month T-bill auction at 11:30am.

Last week most indices essentially marked time. The traded lower, then higher, then faded.  The performance of each major index is shown below:

On Friday we printed a double distribution trend down.  The day began flat and after a two-way auction sellers stepped in late in the afternoon and slowly worked price lower—down through the midpoint of the trend day seen Thursday.

Heading into today my primary expectation is for an early push up to 6331.50.  From here sellers step in and two-way trade ensues, eventually closing the gap down to 6312.75.

Hypo 2 sellers push into overnight inventory and close the gap down to 6312.75 then we take out overnight low 6291.25.  Look for buyers down at 6280 and two way trade to ensue.

Hypo 3 buyers sustain trade above 6332.75 setting up a move to target 6351.50 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

First off, thank you to everyone who showed up on my Friday blog and showed their appreciation for my work.  It means something to me, that I might provide value to your daily work flow.

I love work.  I work so much.  I do not expect you to admire my determination.  I am just creating the type of content that I wish existed when I was 20, 21 years old.  The type of content that demonstrates what it actually takes to make money.

I studied finance in college because I wanted to make money.  Society today is incredible.  As long as you make money and take care of your responsibilities, you are free to do whatever you please with your time.  When you lay the timeline of earth out on a linear plot you realize how short your blip of existence is.

So I want to respect your time.

And when people like sacrilege show up and spew their hateful nonsense, it just makes me sad.  It is not that he has an opposing view to mine.  It is that he harbors a sickness in his mind and maybe his heart, whatever that means.

Growing up, my uncle lived with me.  The guy was clinically crazy.  They blamed it on the drunk driver that ran him over when he was a boy.  Then they blamed it on the doctors, which is fair.  They did not understand closed-head injuries in the early 80s like we do today.  When my mom arrived at the hospital, she always tells me, my uncle was propped up in a chair with his eyeball hanging out of his head.

Elder RAUL tells a different story.  He says my uncle was always a bit off.  He talks about these serious fevers the guy used to experience, well beyond 110 degrees fahrenheit, and says his temperament was always a bit off, which is why he ran in front of that car and was smashed.

Anyhow I grew up with this crazy man as a fixture of my daily life.  He yelled constantly and had the strength of an ox.  Retard strength, as they say.

His volatility fascinated me.  I constantly attempted to understand it with the goal of easing the stress it caused to my family.  At age 11 I had an interesting breakthrough.  My parents bought me a Sony discman.  It was big and bad ass.  I loved it.  For whatever reason, aside from the most savage west coast rap music, I was also into the Beach Boys back then.

My uncle was having a fit.  It was probably because we wouldn’t let him have any more pop.  The guy loved sugary pop.  He would drink it too fast and choke on it.  Anyhow I plopped headphones on him and played Good Vibrations.  He stopped shouting.  Well, he did not stop entirely.  He began singing the song loudly.  But he stopped freaking out.  It was great.  From then on we knew that he could be soothed with music.

Music truly is special.

My uncle did not say many things but he repeated everything he said over-and-over, tens of thousands of times.  What would amuse me most would be when he would yell, repeatedly, “I’M NOT YELLING.”  To see a full grown man yell that he is not yelling is an experience most of you will never know.

He was crazy.  Closed head injury crazy. It shaped me.  It made me comfortable with volatility.  I am sure of it.  The stock market can dish out 200 point ranges in the NASDAQ and it doesn’t phase me.  It actually amuses me.

The point of this long anecdote is important.  Every interaction with someone is an opportunity to learn something.  Even if that person is sick in the head, like commentor sacrilege most likely is, it is still an opportunity to expand your understanding of life, maybe, maybe humanity, maybe how to make money.

I don’t have the answers.

What I do have are battle-tested lessons in trading.  What I do have is the most logical and unbiased way to create a short-term bias and define actionable trading levels.

And that is enough for me.  Hopefully it is enough for most of you to stop in and see what your boy is up to.  Because for real, I love this shit, trading and blogging and making videos of my handsome face.

That’s all.

RE: the markets

I do not have any objective way of confidently forecasting what may transpire over the next five days.  I am not too proud to admit that.  My trading will be light during the holiday week.

Sacrilege, if you happened to read this listen, yes—I am comparing you to my developmentally disabled uncle.  It may seem offensive, but I can assure you he was the sweetest man I have ever known.  He taught me more about life than anyone else ever has.  And I respect you, and I respect your right to say whatever the hell you want.

I do not respect you anti-Jew sentiment.  It is truly fucked up.  Like seriously, stop coming to my blog entirely if you will not stop saying that shit.

kindest regards,

RAUL SANTOS, November 19th, 2017

Exodus members, the 157th edition of Strategy Session is live.  Hop inside our amazing analytics software and check it out.

Outside of the morning technical reports and Sunday prophesies, it has been difficult lately to address the reading class at iBankCoin.  Spending more than a few minutes among the cretinous commentors around here puts me in the mood to find the nearest group of camouflage-wearing numbskulls and tell them to, “send their biggest goon my way, so I may rip his throat out with my teeth.”

I work hard to maintain an even temper.  Coming from a long line of angry men, being calm takes a variety of physical and mental exercises.  Taming the burning rage inside of me has paid off better than any formal education.  There is a lack of commitment to the grind on these pages.  When I am showing a reader how to “stack his leafy green lettuce for his ‘getting money’ BLT,” all these traphouse trolls do is talk out of the side of their mouth—not respecting a real player’s time.

Then some of you have the nerve to express your squalid lack of faith for Mankind’s Last Hope, our One True Leader, a ray of hope in an abyss of darkness.  Of course I am speaking of Elon Musk (all Praise and Glory to The Leader) and his team of engineers at Tesla.  He has repeatedly proven his ability to raise cash for his ‘fantasies’ in a variety of ways.  He actually believes the science community, who is screaming from the roof that climate change is the biggest risk to our species.  And he is smashing through obstacles to alter the path we are taking.

The kind of people who believe in the ideas pitched by Musk (Praise) are also the kind of people who tend to be economically successful during their brief stay here on earth.  Let that sink in.  It is not an ancient bloodline that provides wealth today, but optimism and the courage to work.  So when Musk needs some walking around money for Tesla, he puts on a show and collects ‘reserve money’.  The move is working.  They are Kickstarters for people with millions of dollars.  When he needed a more substantial cash injection he went over to the bond market, where his debt offering was rabidly oversubscribed to.

Hunter S. Thompson insisted the mid-80s created a Generation of Swine which came into existence alongside the birth of 24-hour cable news being mainlined into our brains.  I agree, but it seems internet news has made our collective psyche even more pig-like.  Negativity spreads faster then the flu in a call center.  It is cheaper than ever to churn up some mud for everybody to roll around in.

If it bleeds, it leads.

But all I want to document during these early days of the internet is “how I get mine.”  By writing down my thoughts I cement these valuable tactics into my brain and hopefully start conversations that lead to either you or me achieving that next ‘a-ha’ moment where we elevate our game.

For those same reasons I host Stocktwits meetups here in Detroit.

Listen, I added to my Tesla investment yesterday.  I started to write a piece about why I bought more Tesla, but the words that came out read like something from 4chan.  I realized a disease state had taken hold inside my body, some kind of dark aberration.  I had to draft the piece and go sit silently on a rug for two hours.

Then I came back to my computer and added to my Twitter investment also.

I spent the rest of the day reading old philosophy books and working in the gardens.  Then I stayed up late to watch the Tesla semi event and crypto-fork.

So while it has been quiet over here on the RAUL blog, I am still out here getting mine.  Going forward, I hope you do not feel embarrassed to ask about how I come to an investment conclusion or why I trade a certain way or what types of tools I use.  Hopefully you realize I respect your time, the reader class.

Also what the hell, man?  How are so few of you believing in the crypo-currency revolution?

*r.i.p. lil peep*

– Raul Santos, November 17th, 2017

NASDAQ futures are coming into Friday gap up after an overnight session featuring elevated volume on normal range.  Price was balanced overnight, holding up along the upper quadrant of the Thursday trend day.

Any economic events to concern yourself with are already public knowledge.  At 8:30am both Housing Starts and Building Permits were solid beats.  Strong economy.

Yesterday we printed a trend day.  A pro gap up set the NASDAQ up to open along the top-edge of the Tuesday range.  Buyers immediately drove higher off the open, pressing to a new record high then continuing to slowly press all day.  A bit of profit taking came in near the end of the day.

Heading into today my primary expectation is for buyers to work higher, up through overnight high 6351.75 and poke beyond the Thursday high 6358.50.  Look for sellers up at 6364.75 and two way trade to ensue.

Hypo 2 buyers sustain prices above 6364.75 triggering a continuation of the trending higher. Open air.

It really is that simple.

Hypo 3 sellers take out overnight low 6335.75.   Look for buyers ahead of 6327 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are trading near the Tuesday cash lower after an overnight session featuring elevated range and extreme volume.  Price worked lower overnight, slowly, helping to form the current microcomposite distribution we are in. At 8:30am both CPI and Retail Sales data come out mixed.

Also on the economic docket today we have crude oil inventory at 10:30am and long-term TIC flows at 4pm.

Yesterday we printed a normal variation up.  The day began with a gap down and early push lower.  This discovered a responsive bid and we traversed the entire morning range and eventually went range extension up.  After that another hard sell came in but it could not take out the day low.  Instead we drifted higher through ramping hour and into the close.

Heading into today my primary expectation is for sellers to press lower off the open, down through overnight low 6256.25 to tag 6241.25 before two way trade ensues.

Hypo 2 buyers to work in to the overnight inventory and close the gap up to 6293.50.  From here we continue higher, up through overnight high 6296.25 and close the gap up at 6312 before two way trade ensues.

Hypo 3 stronger sellers trigger a move down to 6218 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Tuesday gap down after an overnight session featuring normal range and volume.  Price worked sideways most of the night in a balanced session before making a small push lower heading into cash open.  At 5am USA’s best Federal Reserve Chairman Janet Yellen spoke as part of a panel over at the European Central Bank.

The only other item on today’s economic docket is a 4-week T-bill auction at 11:30am.

Yesterday we printed a normal variation up.  The day began gap down inside of the Friday range.  Buyers immediately stepped in and close the overnight gap.  The market then flagged out for much of the day before making a second leg higher.  This discovered a responsive sale towards the end of the day.

Heading into today my primary expectation is for sellers to press down to 6289.75 before two way trade ensues.

Hypo 2 buyers work into the overnight inventory and close the gap up to 6312.  From here we continue higher, up through overnight high 6318.25.  Look for sellers up at 6332.50 and two way trade to ensue.

Hypo 3 stronger sellers trigger a liquidation down to 6253.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Monday gap down after an overnight session featuring elevated range and volume.  Price traversed beyond both the high and low of last Friday’s range, in that order, and as we approach cash open prices are hovering along the Friday low.

The economic calendar is light to start the week.  We have a 3- and 6-month T-bill auction at 11:30am then a Monthly Budget Statement at 2pm.

Last week we slow drift rallied through Wednesday, sold off Thursday morning, discovered a responsive bid Thursday afternoon and rallied into the weekend.  The Russell lagged.  The performance of each major index from last week is shown below:

On Friday the NASDAQ printed a neutral extreme up.  It was a mild day, but price managed to take out initial balance low and high.  The day began with a gap down, inside the Thursday range.  After a two-way auction, price briefly poked below IB low before spending the rest of the day slowly rallying and ultimately closing the overnight gap to-the-tick.

Methodical.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6309.25.  From here we continue higher, to about 6310 before two way trade ensues.

Hypo 2 sellers press down to 6253.75 before two way trade ensues.

Hypo 3 stronger sellers press down to 6241.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

Last week was exceptional.  The NASDAQ futures traded methodically, telling a simple story about the auction that was easy to follow and trade.  The playbook repeated from the prior three weeks—drift rally through Wednesday.  Weakness Thursday morning. Strong responsive bid Thursday afternoon that rallies out through the weekend.

You cannot make this stuff up.  It has been like a record on repeat.  And through it all IndexModel, the quantitative system built to predict five days into the future, kept generating the same results—we call it extreme Rose Colored Sunglasses, or e(RCS) for short.  The name comes from the fact that the markets are painting a beautiful picture on the surface.  The major indices are healthy looking charts.  Extremely healthy charts mean we expect more of the same, a drift, perhaps upward, but certainly no downward.

However, we began noting what we term ‘dispersion’ on the industrial, money-flow level.  Look:

10/29/2017:

11/05/2017:

And on the Strategy Session from today, more of the same:

The industrial weakness shown above is also what the term Rose Colored Sunglasses implies because listen, if you put on a pair of rose colored sunglasses, even a junkyard in Detroit looks like a pleasant place to spend a Saturday afternoon with your kids. Everything is better with rose colored sunglasses.

But the lenses tint our perspective of the world.

It is important to remember these sort of things when you go about life. Like that you may be seeing a false representation of the world because you are looking at it through the lenses of bias or assumption.

When we strip it all away, only then can be objectively see the world.  And even then, you occasionally have to step outside of the fish tank you inhabit to see whether the water is cloudy.  Or clear.

Philosophy aside, IndexModel just went on a record streak of e(RCS) readings, six consecutive weeks.  The model finally flipped back to neutral.  Therefore we have zero guidance going into next week.

And as humble market practitioners, we know it is best to step aside when we have no defined edge in the marketplace.  Humans are in control, and humans can be emotional.  They operate on feel, which can be helpful once you have a solid foundation of logic.  But without the foundation, all those feelings are like quicksand circling around a vortex of failure.

Last week was also special because I had the opportunity to catch up with Downtown Josh Brown.  I walked away from his presentation realizing many of his strongly held beliefs about the marketplace are congruent with mine.  It is also enjoyable to see how someone from a different part of the world views my dystopian paradise.

Soon my anarchic stomping grounds will change into something a bit more suburban and safe.  But for now, it truly is the best city in the world to cavort around like an apex wolf man.

In summary, models are neutral.  Without an edge we see little reason for our head trader, RAUL SANTOS, to engage the NASDAQ.  Life is about perspective.  Detroit has perhaps two good years of anarchy left before coastal elites make it into a clean and proper metropolis.

Distinguished members of Exodus Market Intelligence, the 156th edition of Strategy Session is live.  Go check it out!

NASDAQ futures are coming into Friday gap down after an overnight session featuring elevated range and volume.  Price worked lower overnight, tagging the Thursday midpoint before discovering a responsive bid and coming into balance.

We have two economic events to watch out for today.  At 10am the University of Michigan will deliver their primary November reading of sentiment.  Then at 2pm a monthly budget statement.

Yesterday we printed a neutral extreme up.  The day began with a significant gap down.  An early gap-and-go-lower-type push discovered an early bid and buyers made an attempt higher.  Their efforts were thwarted.  Sellers defended an attempt back up into the Wednesday range and this set the stage for a continuation move lower.  Price pressed lower through lunch, tagging the naked VPOC left behind last Friday, November 3rd before discovering a strong responsive bid.  We then worked higher for the rest of the day, eventually taking out the initial balance high and closing above it, earning the day a neutral extreme designation.

Heading into today my primary expectation is  for a move higher to close the overnight gap up at 6314.25.  From here we continue higher, up through overnight high 6321.  Look for sellers up at 6333 and two way trade to ensue.

Hypo 2 stronger buyers press up and close the Wednesday open gap at 6341.50 before two way trade ensues.

Hypo 3 sellers work down through overnight low 6286.25 and we find a bid around 6272 and two way trade ensues.\

Levels:

Volume profiles, gaps, and measured moves:

Futures of the NASDAQ are coming into Thursday gap down after an overnight session featuring extreme range and volume.  Price pushed a touch beyond record highs during extended trade before a strong responsive bid stepped in and knocked the market more than 60 points off its high.  As we approach cash open buyers are attempting to make a move back into the Wednesday range.  At 8:30am Initial/Continuing jobless claims data were mixed.

Also on the economic docket today we have a 30-year bond auction at 1pm.

Yesterday we printed a trend up.  The day began flat and after a two-way auction we began discovering higher prices, slowly, tagging the weekly ATR band above and stalling at the end of the day.

Heading into today my primary expectation is for sellers to reject a move back into Wednesday’s low 6307.75 setting up a move to take out overnight low 6286.25.  From here we poke down to 6283 before two way trade ensues.

Hypo 2 stronger sellers press down to 6263.50.

Hypo 3 buyers reclaim the Wednesday low 6286.25 setting up a gap fill up to 6341.50.  Look for sellers right around here and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves: