Trump Stock Market Rally Continues; Day After Trend Day Context Applies

NASDAQ futures are coming into Thursday flat after an overnight session featuring normal range and volume.  Price made new all-time highs before settling into two-way trade along the unchanged line.  At 8:30am Housing Starts data were below expectations, Building Permits above expectations, Initial/Continuing jobless claims data worse than expected, and Philadelphia Fed data was much better than expected.

The only other economic event on the docket today is a 30-year TIPS auction at 1pm.

Yesterday we printed a trend up.  Steady buying all day from open-to-close.

Heading into today my primary expectation is for buyers to take out overnight high 5313.50 and continue exploring higher prices—open air.

Hypo 2 sellers press down through overnight low 5304.50.  Look for buyers down at 5295.50 and two way trade to ensue.

Hypo 3 stronger sellers press a move down to 5279 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

How much does it suck to be Volkswagen right now?  They got the short end of the stick after an incident on the autobahn became sweet media opportunity for their younger and sexier competitor Tesla.

Some not awesome but hopefully okay person suffered a stroke inside their VW sedan, foot to the floor, blasting down the autobahn like it was a bumper bowling lane.  Then, some astute, no doubt Christoph Waltz like Tesla drive swiftly passed the car and used his cunning skills to bring both cars to a stop.  Jalopnik has the full scoop.

Tesla CEO and all around good guy Elon Musk (all Praise and Glory to The Leader) was so moved by the bravery demonstrated by the Tesla driving man that he decided to provide, “all repair costs free of charge and expedited.”

In appreciation, Tesla is providing all repair costs free of charge and expedited. https://t.co/D68HNJcCoQ

— Elon Musk (@elonmusk) February 15, 2017

You are witnessing greatness right now—-precise German driving and inspirational leadership.  This is of course very bullish for $TSLA.

No word on whether Volkswagen intends to repair the Passat.

The heroic driver will be back on the road, free of charge, and fast, because he purchased a vehicle from the best company in the world.  Good times.

Perhaps the left has grounds to boycott Aetna insurance now that CEO Mark Bertolini (a nice Italian name) said Obama’s Affordable Care Act is, “in a death spiral.”  The comments came during a video interview with the Wall Street Journal.  However, investors were delighted by the forthright nature of Bertolini and set shares of $AET higher.

The last three years have been particularly good for Aetna.  The company saw revenue growth go into hockey stick mode a few years into Obamacare’s enactment:

Earnings growth is not too shabby either.  Perhaps it was all the money government spent running ads to target the young and healthy to fork what’s left of their meager incomes to pay into the insurance machine.

Elizabeth Warren seems to think so.  Perhaps the senator thinks taxpayers should have foot the bill to run a super bowl ad showing how cool health insurance is:

When you shut down ads, fewer people sign up. Now Humana is pulling out of the exchanges. They don’t have enough healthy young ppl enrolled.

— Elizabeth Warren (@SenWarren) February 15, 2017

You really get a sense of what a sham this whole industry is when you realize it’s all about maximizing the amount of people paying for intangible piece of mind and never using it.  Most “healthy young people” need catastrophic at most.  The gamblers can wing it insurance free and keep their wits about them—while paying a fee for their insolence, of course.

Does this look like a company that has suffered from Obamacare?

Now they are ensuring they stay on the correct side of history.  Their CEO is therefore a boss, and it looks like he’ll be leading his bastard company to another eight years of gratuitous profits on the backs of healthy young people.

BULLISH

NASDAQ futures are coming into Wednesday gap down after an overnight session featuring normal range and volume.  Price worked to new all-time highs overnight before retracing much of the gains.  Then a second wave of selling came into the market just after 8am.  At 8:30am Consumer Price Index data came out in-line with expectations and Advance Retail Sales data was better than expected.

Beware Janet Yellen’s Semi-annual Testimony to the House of Representatives, which begins at 10am.  We also have crude oil inventories at 10:30am and Long-term TIC flows at 4pm.

Yesterday we printed a neutral extreme up.  After opening gap down sellers made a move to take out the Monday low but stalled out.  Then, as Yellen was taking questions from the Senate Banking Committee, prices began to rise, pressing up through the entire daily range.  The rally accelerated into the close.

Heading into today my primary expectation is for buyers to push into the overnight inventory and close the gap up to 5276.  Look for sellers up at 5278.50 and two way trade to ensue.

Hypo 2 strong buyers close overnight gap 5276 then sustain trade above 5279 setting up a move through overnight high 5285.  Continue exploring open air above.

Hypo 3 sellers press down through overnight low 5265.25 and find buyers just below at 5264 before two way trade ensues.

Hypo 4 selling liquidation triggered by sustaining trade below 5263.25, sending price down to close the gap at 5227.  Stretch target is 5251.

Levels:

Volume profiles, gaps, and measured moves:

The reflation trade continues to thrive Tuesday despite hawkish commentary from Fed Chair Yellen during her visit to the Senate banking panel.  Yellen spent much of her time making sure investors knew the March 15th meeting is live.  Despite her hawkish tone, traders at the CME are only pricing in a 17% chance of a rate hike when the Fed next convenes:

Her testimony hit the bond market and sent stocks higher after US markets got off to a weak start Tuesday morning.  Inside Exodus, courtesy of the Risk Appetite index, we can see the wide-reaching effect of her statements—investors are shifting away from debt:

Meanwhile banks are celebrating the prospects of higher rates as well as the discussions surrounding Dodd Frank.  While Yellen deflected several Senatorial attempts to digress into a political discussion, she demonstrated an open mind revising the legislation.

Turning your attention to the complications of the market, it’s inner workings, there was a capitulation sell algo strike on the NASDAQ at 11:06am that coincided nicely with the turn:

Overall, the tape is bullish, and continues to be bullish despite Yellen striking a hawkish tone today at the Senate.  What does that tell you?  It tells me investors expect the new administrations tax and trade reforms to have a more significant impact on the business climate than the rate hikes by the Fed.

BULLISH

NASDAQ futures are coming into Tuesday flat after an overnight session featuring normal range and volume.  Price held above the Monday midpoint and inside Monday’s range overnight on balanced trade.

On the economic calendar, beware Janet Yellen speaking to the Senate Banking Committee at 10am.  We also have a 4-week T-bill auction at 11:30am.

Yesterday we printed a double distribution trend up.  The week began with a gap up and buyers were eager to drive price higher off of it.  Price worked higher, up through open air, tagging the Exodus Strategy Session measured move target before finding some responsive selling and settling into two-way trade.

Heading into today my primary expectation is for buyers to work up through overnight high 5261 and continue to probe higher, up through Monday high 5261.50.  No upside targets exist.

Hypo 2 sellers push down through overnight low 5252.25 and work lower to 5234.50 before two way trade ensues.

Hypo 3 stronger sellers close the weekly gap down to 5227 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

Last week a short-term trade opportunity arose in Nvidia Corp after earnings prompted a sharp sell.  Large rotations are rarely a one-off experience, and with the help of our good friend Leonardo Fibonacci we can establish and shoot for a target in a simple manner.

Nvidia has had an incredible run over the last few years, and while a bit of selling pressure is coming into the name, the long term chart has a long way to go before it merits reason for concern.

NASDAQ futures are coming into the week gap up after an overnight session featuring normal range and volume.  Price worked higher overnight, mostly after 6:30am.  Before then it was balanced.

The economic calendar is light to start the week–only a 3- and 6-month T-bill auction on the docket, both at 11:30am.

US markets worked higher last week, across the board.  Here is the performance of each major index last week:

Last Friday the NASDAQ printed a normal variation up.  Price opened gap up, just above the Thursday high.  Sellers worked down into the the gap, closed it, revealed buyers and we spent the rest of the day auctioning higher.

Heading into today my primary expectation is for buyers to probe higher into open air.  Look for sellers up at 5261.50 if we tag it.

Hypo 2 sellers press into the overnight inventory and close the gap down to 5227.  This sets up a move to take out overnight low 5226.75.  Look for buyers just below at 5224.75.

Hypo 3 strong selling moves in, sustains trade below 5223.25 setting up a move to target 5210.

Levels:

Volume profiles, gaps, and measured moves:

Greetings and hello from the battery room inside Exodus.  All systems are calibrated, the furnaces are filled with coal, and the cogs greased.  Upon incorporating the data generated last week by billions of dollars’ worth of trades into the working auction theory model, a bullish signaling was generated.

If you recall, the model ran bullish for four consecutive weeks, then flipped neutral last week.  Now it is firmly entrenched in the bull camp, prepared to saunter higher at an aloof rate while underlying stocks occasionally explode higher.

Interestingly, as Fly noted yesterday, Exodus is dialed into the market well right now—spotting its opportunity in a flawless manner.  Had you simply adhered to the signalling inside Exodus, you wouldn’t have grown skeptical of the market last week, like me.

However, and in part thanks to the hybrid scoring system inside Exodus, my foray into shorting the market last week came to a sudden end Thursday when the bull snorted and heaved higher.

The only problem is I raised come cash on Monday.  Said funds will need to be reallocated.  This will not be easy at these elevations.

Slowly.

iBC Labs is back to bullish heading into OPEX week.  Look for a shakeout early on, but by Wednesday bulls assert their dominance.

Quick look at the chart for $NVDA.  Sellers dominated the resistance levels they were supposed to and the likely rotation from here is lower.  A softening of the tape early next week could help, but either way this ticker looks weak short term.

BEARISH