NASDAQ Flat As Risk of Hard Sale Is Lifted

NASDAQ futures are coming into Wednesday flat after an overnight session featuring elevated volume on normal range.  Price worked higher overnight, trading well-up-into the trend down from 8/17 before two-way trade ensued.  At 8:15am ADP employment data was better than expected.  At 8:30am GDP data was better than expected.

The only other economic event today is crude oil inventory at 10:30am.

Yesterday we printed a trend up.  The day began with a sharp gap lower.  After a brief attempt lower price drove higher.  We then spent the rest of the day working back up to the highs set last Friday.

Heading into today my primary expectation is for a move up through overnight high 5899.  Look for sellers around 5900 and two way trade to ensue.

Hypo 2 stronger buyers take us up to the open gap at 5924.25 before two way trade ensues.

Hypo 3 sellers press down through overnight low 5862.50 and continue lower, down to 580 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

When shooting an ICBM over Japan cannot derail the Great Rally of 2017, you have to stop and wonder if anything can.  This may be the greatest rally in history and we do not even know it yet.  The NASDAQ has driven higher since the open, effectively returning us to the ‘crime scene’ prices that we held prior to reports of the missile launch hitting the wires.

For two Sundays, the lab work inside Exodus has resulted in bunker buster forecasts.  This is a challenging signal to trade because one must constantly be on the lookout for the proverbial turn, the moment when we form an excess low that we can leg into in anticipation of the rally lasting the rest of the week.

Today we formed a sharp low, it could be the one.  I have my doubts.  One thing is certain–the aggressive buyers seen last Monday/Tuesday showed up again this morning and defended their territory, which resides just below 5800 on /nq_f.

Should we continue to trend higher this afternoon, my doubts will be vanquished entirely.  For now, I am cautiously optimistic that we have seen the low of the week.

#developing

NASDAQ futures are coming into Tuesday gap down after an overnight session featuring extreme range and volume.  Price worked lower quickly, then slowly at times, and for the most part in an orderly manner.

There are some economic events to be aware of.  Case-shiller house price index at 9am, Consumer Confidence at 10am, 4-week T-bill auction at 11:30am, and a 7-year note auction at 1pm.

Also, the overnight move was news driven, an impulse reaction to reports of North Korea firing an intercontinental ballistic missile over Japan.  Our expectation with any news driven market reaction is a return to ‘the scene of the crime’ at some point.

Yesterday we printed a normal variation up.  The day began with a big gap up and sellers quickly worked it closed.  Then, after closing the gaps a responsive bid stepped in and we rallied a bit, keeping the action inside of Friday’s range before the ensuing two-way trade.

Heading into today my primary expectation is for a gap-and-go liquidation.  Look for a move down to 5755.50 before two way trade ensues.

Hypo 2 stronger sellers work down to the open gap at 5720.75 before two way trade ensues.

Hypo 3 buyers work into the overnight inventory and close the gap up to 5845 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Monday gap up after an overnight session featuring elevated range on normal volume.  Price was lower Sunday evening and briefly probed below the Thursday low before finding a strong responsive bid and working back up into the high-value zone established last week.  At8:30am advance goods trade balance data came out below expectations.

Also on the economic calendar today we have 4 separate Treasury auctions.  At 11:30am we have both a 6-month bill and 2-year note auction.  Then at 1pm we have a 3-month bill and 5-year note auction.

Last week began with a sharp move lower Monday that discovered a responsive bid.  Tuesday was trend up and we spent the rest of the week trading inside the Tuesday range.  All the while, the Russell quietly diverged higher.  The performance from last week of each major index is listed below:

On Friday the NASDAQ printed a normal variation down.  After sellers could not close the early gap up we had a morning rally.  It fizzled out ahead of Thursday’s high and we reversed before New York lunch and rent range extension down.  Then we spent the rest of the day flagging near the lows.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5825.50.  From here we continue lower, down through overnight low 5801.25 and close the gap don at 5795 before two way trade ensues.

Hypo 2 buyers gap and go higher, working towards the open gap at 5878.75 before two way trade ensues.

Hypo 3 stronger buyers form a rally, all the way up to the open gap at 5924.25 before two-way trade ensues.

If hypo 3 plays out, it would negate the bunker buster signal we have from Sunday’s Exodus strategy session.

Levels:

Volume profiles, gaps, and measured moves:

Greetings from the bunker lads!

Last week was curious.  The selling Monday was dynamic and quickly discovered a responsive bid.  Tuesday was trend up across the board, and the rest of the week was spent consolidating inside the range of Tuesday’s trend.  Quietly and slowly, the Russell diverged higher.  That tells us risk appetite is alive and well.  And why wouldn’t it be?  Have you seen the blockchain markets?  Wealth is pouring in on all fronts.

Housing is up.  America is winning again. We are back to normal.  The neocons have forced our authoritarian leader to bend the knee and keep the perpetual war for heroin plants alive.  Floyd Mayweather wore a very ANTIFA outfit and punched the jaw off of that Irish brawler.  The antifascist movement is spreading across the country, ripping old and offensive relics out by their foundation and leaving in their wake cleaner more pure places for decentralization and mayhem to take root.

All of this good for yours truly, the old crocodile.  It sets up the type of situation where more confused meals fall into my puddle then WHAP!  Dinner is served.

The less primal, more kind and patient scientists at iBankCoin laboratory have spent the morning fiddling with the instruments inside Exodus.  And despite all the fanfare surrounding the stock market last week, and all the drunken shit posting bulls, they continue to suggest caution.  They expect a buyable dip to surface soon, but first they expect a bit of ultra-violence and speed to the downside.

Will it take shape?  As always, to be determined.  Several of the complications beneath the surface are bullish.  Rotations, contextual indices, breadth, algorithmic mojo, etc.  But the IndexModel is signalling bunker buster for a second consecutive week.

All this information, and MOAR, is covered extensively in the Exodus Strategy Session.  Today marks the 145th edition of the report, and it makes sense to give it a read, especially if you intend to close out August like a champion.

September starts sloppy, on a Friday, and everyone is about to be real serious come September.  Are you ready?

NASDAQ futures are coming into Friday gap up after an overnight session featuring normal range and elevated volume.  Price began working higher early this morning, and ultimately we held inside of the Thursday range.  At 8:30am Durable Goods orders came out below expectations.

The only other economic event scheduled today is the keynote speech from Fed leader Janet Yellen—a decree she will issue from high atop the mountains of Jackson Hole, Wyoming.

Yesterday we printed a normal variation down.  The day began with a gap up-and-above the Wednesday range.  Sellers drove lower off the open then extended their progress ahead of New York lunch.  Then they backed off, and in their wake came a responsive bid, slow and steady, that worked price back to the daily mid-point to end the day.

Heading into today my primary expectation is for a short squeeze.  Sellers had several chances this week to make a move and did not, therefore look for price to take out overnight high 5867.75 and close the open Tuesday gap at 5878.75.  From here we continue higher, up to 5900 before two way trade ensues.

Hypo 2 stronger buyers carry us to 5925 before two way trade ensues.

Hypo 3 sellers press into the overnight inventory and close the gap down to 5841.  They continue lower, down through overnight low 5832.  Look for buyers down at 5790.75 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Thursday gap up after an overnight session featuring elevated range and volume.  Price worked both down below and up above the Wednesday range overnight, and as we head into the open price is holding onto the gains.  At 8:30am Initial/Continuing jobless claims data came out mixed.

Also on the economic agenda today we have existing home sales at 10am and a 5-year TIPS auction at 1pm.

Yesterday we printed a normal variation up.  The day began with a gap down to about the mid-point of Tuesday’s trend day.  A tight, two-way auction eventually broke to the upside but lacked much dynamic follow-through.  Overall the session was balanced.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5847.25.  From here we continue lower, down through overnight low 5829.  Look for buyers down at 5790.25 and two way trade to ensue.

Hypo 2 gap-and-go higher, close the Tuesday gap up at 5878.75 then continue higher to 5893.50 before two way trade ensues.

Hypo 3 stronger buyers sustain trade around 5900, setting up a rally up to 5924.25 and negating the bunker buster entirely.

Levels:

Volume profiles, gaps, and measured moves:

The Sunday theory of a fast down move this week has evolved a bit, but the expectation remains.  There was a curious event Wednesday on the NASDAQ which feeds into my bearish conviction.  When I say curious,  it means I have logged years of data and tested theories using the information.  For example, I label every day type more-or-less along the rules set forth by Dalton in Mind Over Markets.  These are the day types, listed from highest-to-lowest directional conviction:

1. trend
2. double distribution trend
3. neutral extreme
4. normal variation
5. normal
6. neutral

Then I test for statistically relevant events.  A high probability statistic is the edge I need to enter a trade.  There is an edge based off a trend day.  Tuesday was a trend day.  The edge is that over 70% of the time we exceed the high or low mark of the trend by at least one tick during the following session during regular trading hours.  The statistic is symmetrical, meaning it works both for trend day up and down.

We love symmetrical statistical advantages.  They are a beautiful feature of the universe.  Wednesday defied the statistic.  We did not exceed Tuesday’s high by a tick during Wednesday trade.  And when we do not conform to a statistic, it reminds me of an old Sherlock Holmes story called Silver Blaze.  The fact that buyers could not conform to a high-probability statistic is a clue that sellers are still actively engaging the market.

Unless something major changes overnight, the Bunker Buster bearish-to-bullish trading bias remains.

Trade accordingly.

NASDAQ futures are coming into Wednesday gap down after an overnight session featuring normal range and volume.  Price held Tuesday’s high mark for several hours before retracing back to about the midpoint of the cash session.  At 7am MBA mortgage applications came out lower than last week.

Also on the economic agenda today we have Markit manufacturing/service/composite PMI data at 9:45am, new home sales at 10am, crude oil inventories at 10:30am, then a 2-year floating rate auction at 11:30am.

Yesterday we printed a trend day.  This is the one of the cross-currents against our bearish bias on the week.  There is a high probability statistic that the day after a trend day up we will exceed the day’s high by at least a tick.  The day began with a decent gap up and drive higher.  Then, after stalling for a bit at some market profile levels, we continued higher into end-of-day.

Heading into today my primary expectation is for sellers to gap-and-go lower, but trade only down to about 5838.75 before two way trade ensues.

Hypo 2 buyers work into the overnight inventory and close the gap up to 5878.75.  If they manage to take out overnight high 5884 and sustain trade above it, the bunker buster short signal is negated.

Hypo 3 stronger sellers erase all of Tuesday’s gains, trading a gap fill dwn to 5795.  Look for buyers down at 5790 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range on elevated volume.  Price worked higher overnight, exceeding the high print from Monday before stalling out around last Friday’s high.  The extended hours price action built nicely into the balance we are forming after the discovery down seen late last week (see Market Profile chart below).

The economic calendar today features House Price Index at 9am and a 4-week T-bill auction at 11:30am.

Yesterday we printed a normal day, which is anything but.  They only occur about 6% of the time.  The day began flat and sellers stepped in on the open.  They pushed hard for the first hour, forming a wide initial balance, before discovering a responsive bid.  We spent the rest of the day trading inside the initial balance range, earning the normal designation.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5795.  From here we continue lower, down through overnight low 5778.75.  Look for buyers down at the 5772 low volume node and two way trade to ensue.

Hypo 2 buyers gap-and-go higher and work towards 5862.25 before two way trade ensues.

Hypo 3 stronger sellers work down to 5737.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves: