Onward and Upward: NASDAQ Continues To Stroll Higher

NASDAQ futures are coming into Friday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight, achieving new highs before settling into two-way trade.

The economic calendar is light as we wrap up the week.  At 10am we have U of Michigan Confidence, at 1pm the Baker Hughes rig count, and at 2pm a Monthly Budget Statement.

Yesterday we printed another double distribution trend up.  After opening flat a strong buyer drove the market higher in the morning and buyers continued bidding the market, turning initiative in the afternoon and pressing value higher before two way trade ensued.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5212.  From here we take out overnight low 5209.25.  Look for buyers down at 5194 and two way trade to ensue.

Hypo 2 buyers press up through overnight high 5227.25 and continue exploring higher prices.

Hypo 3 strong sellers press down through 5194 and sustain trade below it setting up a move to target the open gap at 5191.25 then 5189.25.  Stretch target is 5175.75.

Levels:

Volume profiles, gaps, and measured moves:

Ben Kallo is a smart feller and loyal disciple to the venerable Elon Musk (all Praise and Glory to The Leader) and the man had some good things to say about Tesla heading into earnings this morning, see below:

Baird analyst Ben Kallo said he is a buyer of Tesla shares ahead of Q4 results, which he believes will be another de-risking event for the company. Although he said there could be short-term noise as expectations are calibrated, he recommends owning the shares. He expects an update on the Model 3 and Gigafactory production ramps, which he believes will drive the shares higher. Kallo reiterated his Outperform rating and $338 price target on Tesla shares.

And just like that, with a stroke of his analyst pen, the stock surged higher Thursday.  $TSLA is set to report earnings February 22nd after market close.

Kallo suggests you make plans now for the post-earnings champagne uncorking and sanctimonious celebration that’s sure to follow.

BULLISH

NASDAQ futures are coming into Thursday flat after an overnight session featuring normal range and volume.  Price worked to new highs briefly, around 6am, before flattening back out.  At 8:30am Initial/Continuing jobless claims data came out mixed.

Also on the economic docket today we have Wholesale Inventories at 10am and a 30-year bond auction at 1pm.

Yesterday we printed a double distribution trend up.  A gap down was sold early on but quickly formed an excess low suggesting the presence of strong responsive buying.  We then rallied up through the Tuesday high and sustained above it.  A late-day ramp higher was faded.

Heading into today my primary expectation is for sellers to press into the overnight inventory and close the small gap down to 5191.25 then continue lower through overnight low 5186.25.  Look for buyers down around 5175 and two way trade to ensue.

Hypo 2 buyers continue exploring higher prices, take out overnight high 5201.75 and probe higher.  Open air.

Hypo 3 stronger sellers trigger a liquidation down to 5157.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

Not many spend time to understand the complications of the stock market—all the small mechanics behind price and time.

Today they tell a story of health and virility.

But that small slip lower we experienced last week followed by an overexertion from the bull, el toro, created context, or a story, that merited exploring a short bias.

Leaning short was effective several times this week, intra-day.  Yet we pressed higher.  When we came into my favorite Fibonacci extension, which is a fun place for algos to run stops, the level became a last stand for short sellers.

Sellers either defend the level or lose the first full week in the second full month under our new Authoritarian Regime.

It made sense to also go swing short, so I put some QID on the books.

The market confirmed it was a decent entry.  We sold off on Tuesday from those levels.

But alas, here we are, lingering above my Fibs.  And the longer we do, the more likely this leg of the rally is the real deal and not just a petty stop run.

So my bias intra-day keeps pivoting.  This afternoon it was long.

The complications, the context, the story—whatever you want to call it, can form an objective set of observations for making market decisions.  Presented with the right facts, any one of you could make the right decision.

Just for fun I ran through all my afternoon observations over on the old snapchat.  Check it out if you want, username vCali.

Disclaimer: lots of random stuff on my snap story too

I’m keeping the QID to stay swing short the NAS for now, but it’s on its heels.

NASDAQ futures are coming into Wednesday flat after an overnight session featuring normal range and volume.  Price held high balance overnight in slow, two-way trade.  At 7am MBA mortgage applications data came out better than last week.

Also on the economic docket today we have crude oil inventories at 10:30am and the US Treasury is auctioning off $24 billion worth of 10-year Notes.

Yesterday we printed a normal variation up.  After starting the day gap up to new all-time highs, price drove higher until nearly lunchtime.  Then, we formed excess high right around where one would expect to see algorithims hunting stop orders.  Sellers pressured the tape for the rest of the afternoon but gained little traction.

Heading into today my primary expectation is for sellers to press down through overnight low 5171.25 and work a gap fill down to 5158.  Buyers show up here and two way trade ensues.

Hypo 2 take out overnight high 5187.75 and continue working new highs.  Take out Tuesday high 5192 and tag the 5200 century mark before two way trade ensues.

Hypo 3 strong sellers press down to 5138.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures set to gap higher into Tuesday after an overnight session featuring normal range and volume.  Price worked higher overnight, trading up to and sustaining new highs as we approach cash open.  At 8:30am Trade Balance data was slightly worse than expected.

Also on the economic docket today we have JOLTS Job Openings at 10am, a 4-week and 34-day T-bill auction at 11:30am, $24 billions dollar’s worth of 3-year Notes being auctioned at 1pm, and Consumer Credit at 3pm.

Yesterday we printed a normal variation up.  After starting the week gap down, buyers quickly showed up and bid the market higher.  They continued their campaign late in the afternoon to close near session high.

Heading into today my primary expectation is for a squeeze higher early on, up to 5182.  Look for sellers up here and two way trade to ensue.

Hypo 2 stronger squeeze up to 5191.25, then seller show up and begin reversing the move.

Hypo 3 strong buyers sustain trade above 5191.25 setting the stage for a real rally.

Hypo 4 sellers work into the overnight inventory and close the gap down to 5158 then set their sights on overnight low 5154.25.  Look for buyers down at 5150.50 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

Some nice lady living in Riyadh, Saudi Arabia sent out a tweet about this time last year which included a picture of a sign taped to the entry door of a Starbucks in the city.  The sign reads, “PLEASE NO ENTRY FOR LADIES ONLY SEND YOUR DRIVER TO ORDER.”

For real, check it out:

#Starbucks store in Riyadh refused 2 serve me just because I'm a WOMAN & asked me 2 send a man instead@Starbucks pic.twitter.com/6Nj6DkOtFJ

— Manar N (@manarn8) February 1, 2016

Saudi Arabia has all sorts of jacked up laws to keep women, which are property like dog or goat, from living a normal life.  Like voting and opening a bank account.  You know, stuff that needs to be properly vetted to a woman via a mansplanation.

Anyhow her image went viral, and the good people of Starbucks were forced to deny any wrong doing.

@Jenn_Abrams That was a temporary sign during a store renovation. This store now accommodates all customers in accordance with local law.

— Starbucks Coffee (@Starbucks) February 6, 2017

While there’s no sign of renovation taking place in the picture, one still has to wonder, “Why would some contractors at work merit keeping woman out?  Would they trip on an air line and take a nail to their ovaries, making them less valuable property?”

Of course, we must point out the irony that Starbucks recently vowed to hire 10,000 refugees instead of veterans, poor students, or you know…normal non-displaced people who can’t find work.

Regardless, when Starbucks started saying their growth plan was focused on China, where the water is metallic and counterfeit is rampant, it became less than an ideal investment.

Now they’re caught in the center of a political hot topic in a whole bunch of ways.  A viral picture of a sign on their door banning woman from entry does not help their situation.

BEARISH

Mothership detected a rare anomaly on the New York Stock Exchange Friday morning that may mark the climax of our rally for now.

It’s a shame to just now be seeing this, but I was distracted Friday, shooting aerial footage of a nearby Macy’s slated for decommissioning.

Nevertheless, good reader, it behooves you to be cautious this week.  An extreme, 3rd sigma NYSE tick pressed through the market Friday morning, see below:

Note: my NYSE tick is a bit different than most people’s NYSE ticks.  It is powered by IQ Feed, and pipes in raw tick data from the entire NYSE, unlike the more basic NYSE most people use and blindly take action from +/- 1000 ticks.

The behavior Friday was somewhat uncommon for an extreme up-tick.  Usually you can ride those bad boys all day long and look for the exits a few days later.  Friday sputtered out just after buyers clawed back the gap left behind last Monday.

All around, this is grounds for caution.

NEUTRAL-TO-BEARISH

NASDAQ futures are coming into the first Monday of February gap down after an overnight session featuring normal range and volume.  Price chopped around inside last Friday’s range in balanced trade, however as we approach cash open there is some selling pressure hitting the tape.

The economic docket is light all week, and today we only have two T-bill auctions to monitor, both at 11:30 am, the 3- and 6-month duration, $34B and $28B respectively.

Last week began with a hard sell that was bought.  Then a gap down Tuesday that traded the same way, lower in the morning than higher in the afternoon.  Wednesday was gap up and range bound, and the rest of the week marked time.  The performance of each major US index can be seen below:

On Friday we printed a normal variation down on the NASDAQ.  After opening gap up closing the gap left behind when we came into last week, price stalled, and excess high formed and we poked below initial balance low for a second.  Then we slowly traded higher through the rest of the session.

Heading into today my primary expectation is for sellers to push off the open and trade down to the open gap down at 5130.75.  Sellers continue lower, closing the gap down at 5119.25 as well.  Look for responsive buyers down at 5118.25 and two way trade to ensue.

Hypo 2 buyers work into the overnight inventory and close the gap up to 5154.75.  Buyers continue higher, up through overnight high 5160 and test above all time high.  Look for sellers up at 5182 and two way trade to ensue.

Hypo 3 range trade, from 5156.50 to 5123.50.

Levels:

Volume profiles, gaps, and measured moves:

It takes a certain humility to admit when you have no edge in a competition.  Like Super Bowl squares, no edge, I’m not buying.  Or predicting how Tesla will behave after their Wednesday earnings announcement.

I can’t call it.

After 4 weeks of bullish predictions from the IndexModel, it has flipped to neutral.  Like a bird on a wire, it would rather observe and chat than venture onto the busy street for snacks.

Heading into the second week of the second month of the first year under our new American authoritarian regime, which is cool, we love our leader ::quivers:: there is no call from iBankCoin labs.

Enjoy your American football match.