iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,086 Blog Posts

Juggernauts Microsoft and Alphabet set to report after bell, Tesla lower in pre, here is Tuesday NASDAQ trading plan

NASDAQ futures are coming into the last Tuesday of April with a slight gap up after an overnight session featuring **normal** range and volume. Price worked sideways overnight, balancing along the Monday high. As we approach cash open, price is hovering along the Monday high and about 40 points below record highs.

Shares of AI and robotics company Tesla are -2% in premarket trade after reporting earnings Monday afternoon.

On the economic calendar today we have consumer confidence at 10am followed by a 2-year note auction at 11:30am then a 7-year note auction at 1pm.

Major NASDAQ components Microsoft and Alphabet (Google) are set to report earnings after the bell.

Yesterday we printed a normal variation up. The structure of the price action nearly resembles a double distribution trend up, but a closer look at the volume profile reveals only a single Gaussian structure. The day began with a slight gap up in range and after an open two-way auction in range buyer stepped in and began campaigning price higher. Price exceeded last Friday’s high early on, around 11am New York before flagging along these highs through lunch. After lunch buyers continued their campaign higher, eventually tagging 14,000 and going on to close the 04/16 open gap. The day ended chopping along the highs.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 14,050 on the way to probing beyond record high 14,059.75.

Hypo 2 stronger buyers trade up to 14,100 before two way trade ensues.

Hypo 3 sellers press down through overnight low 13,999 before two way trade ensues.

Basically, a pause as the market awaits new information.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ flat into final week of April // here is Monday trading plan

NASDAQ futures are floating around the unchanged line heading into Monday after an overnight session featuring extreme range on elevated volume. Price worked lower overnight, trading down near last Friday’s midpoint before discovering a responsive bid around 8am New York.  At 8:30am durable goods orders came out in-line ex-transportation but well below expectations if we include transports. Since then price has worked about 50 handles up, and as we approach cash open price is hovering in the upper quadrant of last Friday’s range.

Also on the economic calendar today we have a 6-month bill and 2-year note auctions at 11:30am followed by 3-month bill and 5-year note auctions at 1pm.

Last week had some big choppy price action. There was weakness early in the week and eventually strength into the weekend. Russell was bullish divergent throughout the week, suggesting risk tolerance remains elevated.

The last week performance of each major index is shown below:

On Friday the NASDAQ printed a double distribution trend up. The day began with a gap up in range and then an open drive higher. Early buyers steadily campaigned price higher, effectively making short work of returning price “to the scene of the crime” where the initial reaction to new of a capital gains tax increase hit the wires. Price shot clean through beyond that level and eventually took out Thursday high before flagging along the highs for a few hours. Price then dropped a bit during settlement period.

Heading into today my primary expectation is for sellers to press into the overnight inventory and trade down to 13,845 before two way trade ensues.

Hypo 2 buyers press up through overnight high 13,944.25 setting up a move up through last Friday high 13,981 on the way to tagging 14,000.

Hypo 3 stronger sellers trade down through 13,845 early on and sustain trade below it seeting up a move to 13,800.

Levels:

Volume profiles, gaps and measured moves:

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My job

Next week is big. Possibly one of the top three-or-four most important weeks of the year. Everything is happening all at once. All the Big Tech outlets report earnings next week, starting with Tesla after the bell Monday and ending with Amazon Thursday. Wednesday afternoon there is an FOMC announcement and press conference. Friday is month-end. Geopolitical risk is elevated also—less from pandemic headlines, more from tax headlines.

What is my job heading into a big week like this?

It is not to be a tax expert, whipping up some hot takes to tweet out.

It is not to hold hands with strangers on the internet as they wager their fortunes of their own.

My job, quite simply, is to extract as much fiat american dollar as possible from the global financial complex. That’s it. My job is to focus on the auction. My job is to make a plan and then execute that plan. My job is to obey the risk protocols I put in place before the action heats up. My job is to nurture my mind and body and make time to look inward, to maintain unbiased thoughts. To only allow the lens of the auction to tint my perspective.

Said fiat is eventually to be converted into real assets—concrete and steel and energy generation. Stuff to augment my mortal existence as my ability and willingness toil whither away. Robots. Absurdly German kitchens. Giant shrubs to keep the noise of reality away from my person.

Why though? Why build a giant playground? To benefit as many people as possible. To create places where people feel safe taking drugs and exploring their psyche. To heal the soil and feed as many people as I can nutritious organic, safe, sustainable food. To love thyself. Pleasure.

That’s it. Let’s set aside the fun tokens and crypto toys for now. The big guns are set to report. Let the shitcoins simmer. Certainly don’t sell anything. But focus on our True Leaders. Big Tech.

Maybe give the Fed, that archaic institution that loses its relevance daily, a bit of attention also.

Raul Santos, April 25th, 2021

Here is the 335th edition of Strategy Session. Enjoy:

Stocklabs Strategy Session: 04/26/21 – 04/30/21

I. Executive Summary

Raul’s bias score 3.53, medium bull*.  Expect higher prices but allow earnings out of Big Tech to dictate direction as the week progresses.

Tesla reports Monday after-market-close (AMC). Microsoft and Alphabet (Google) Tuesday AMC. Apple and Facebook Wednesday AMC, Amazon Thursday AMC.

FOMC announcement and press conference Wednesday afternoon.

*IndexModel flagged extreme Rose Colored Sunglasses bullish bias, see Section IV.

II. RECAP OF THE ACTION

Big chop. Weakness early in the week, strength into the weekend. Russell bullish divergent.

The last week performance of each major index is shown below:

Rotational Report:

Sort of a mishmash of negative returns.

neutral.

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Money flows just barely skewed positive. Fairly subdued.

I am beginning to question the volume delta data because it is pinned down around -40% these last few weeks. Median return was about +40 basis points.

Money flows are neutral.

Here are this week’s results:

III. Stocklabs ACADEMY

Huge week ahead

Month-end. All Big Tech outlets reporting. Geopolitical risk remains elevated with the pandemic and tax talk out of the White House. Plus the FOMC announcement Wednesday.

There is nothing wrong with standing aside and letting all this information price out. That said, if we can stay in the rhythm of the action, the upcoming week presents elevated opportunity.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Expect higher prices but allow earnings out of Big Tech to dictate direction as the week progresses.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Semiconductors holdings highs, Transports continue to rally

Markets fluctuate between two states—balance and discovery.  Discovery is an explosive directional move and can last for months.  In theory, the longer the compression leading up to a break, the more order flow energy to push the discovery phase.

We are monitoring two instruments, the Nasdaq Transportation Index and the PHLX Semiconductor Index.

Transports are nearly making a new high. Discovery up continues. Bullish.

See below:

Semiconductors can fall a bit more and still have a discovery up set-up. For now, this looks like discovery up.

See below:

V. Stocklabs Hybrid Oversold

On Tuesday, April 20th Stocklabs flagged oversold on the 6 month algorithim. This bullish cycle runs through end-of-day May 4th. Here is the performance of each major index so far:

VI. INDEX MODEL

Bias model is flagging extreme rose colored sunglasses for a third consecutive week after being neutral three weeks back and having flagged extreme Rose Colored Sunglasses four weeks back after being neutral four weeks before that after signaling Bunker Buster eight weeks ago after being neutral for the thirteen weeks prior to that.

Extreme Rose Colored Sunglasses calls for a calm sideways drift, perhaps with a slight upward bias. With a bias spread over +1 we expect buyers to pressure the tape higher late into the week.

Here is the current spread:

VII. QUOTE OF THE WEEK:

“I succeed because I have a long attention span.” Charlie Munger

Trade simple, step back if you lose focus

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Here is Friday NASDAQ trading plan

NASDAQ futures are coming into Friday with a slight gap up after an overnight session featuring elevated range on normal volume. Price was balanced overnight, balancing along the lower quadrant of Thursday’s range. As we approach cash open, price is hovering in the lower quad of Thursday range.

On the economic calendar today we have PMI composite flash at 9:45am followed by new home sales at 10am.

Yesterday we printed a neutral extreme down. The day began basically flat and then a open drive down. Buyers defended the Wednesday VPOC and worked price higher, making an early range extension up while taking out Wednesday high. A check back to the midpoint was defended by buyers but before a new high could be made the tax news hit the tape and sent price lower. We quickly entered a neutral print and eventually probed below the Wednesday low before coming into a choppy balance along the low for the remainder of the session.

Heading into today my primary expectation is for sellers to press down through overnight low 13,737 on their way to taking out the Thursday low 13701.75. Look for buyers just below at 13,687 and for two way trade to ensue.

Hypo 2 buyers drive higher on the open, reclaiming 13,800 early on and sustaining trade above it, setting up a “return to the scene of the crime” up at the Thursday VPOC 13,925.50.

Hypo 3 stronger buyers trade up to 14,000 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Day after trend day ;-) here is NASDAQ trading plan

NASDAQ futures are coming into Thursday with a slight gap down after an overnight session featuring normal range and volume. Price was balanced overnight balancing along (and occasionally exceeding) the Wednesday high. At 8:30am jobless claims data came out in-line with expectations, and as we approach cash open price is hovering along the Wednesday high.

Also on the economic calendar today we have existing home sales at 10am, 4- and 8-week T-bill auctions at 11:30am and a 5-year TIPS auction at 1pm.

Yesterday we printed a trend up. The day began with a slight gap up and then an open test drive. We opened, tested below Tuesday low, then drove higher for the rest of the session. Price didn’t quite take out the 4/20 high before ending the session near the daily high.

Heading into today my primary expectation is for buyers to trade up through overnight high 13,938 on their way to tagging 14,000.

Hypo 2 stronger buyers trade up to close the gap at 14,019 before two way trade ensues.

Hypo 3 sellers press down through overnight low 13,878. Look for buyers down at 13,867.50 and for two way trade to ensue.

Levels:

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Balance overnight in the NASDAQ // here is Wednesday trading plan

NASDAQ futures are coming into Wednesday with a gap down after an overnight session featuring elevated range and volume. Price was balanced overnight, balancing along the lower quadrant of Tuesday’s range after briefly probing below it around 1am New York. As we approach cash open price is slightly above the Tuesday close.

On the economic calendar today we have crude oil inventories at 10:30am followed by a 20-year bond auction at 1pm.

Yesterday we printed a double distribution trend down. The day began with a slight gap down in range that buyers quickly resolved shortly after ht open. Said early buyers managed to probe a bit beyond the Monday midpoint before the auction stalled out and reversed. Sellers pushed an early range extension down and swiftly pressed down through Monday low. The sellers managed to work price down to levels unseen since two Fridays back before noon, and then we spent the rest of the session chopping along the lower half of the day’s range.

Heading into today my primary expectation is for the sell discovery continues, tagging 13,687 before two way trade ensues.

Hypo 2 buyers to press higher, trading up through overnight high 13,788.50 on the way to tagging 13,800.

Hypo 3 stronger buyers tag 13,836.75 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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4/20 NASDAQ trading plan

NASDAQ futures are coming into Tuesday with a gap down after an overnight session featuring extreme range and volume. Price was balanced overnight until about 5:30am New York when sellers stepped in and probed down below Monday low. Since then price has reclaimed Monday range and as we approach cash open price is hovering in the lower quadrant of Monday range.

On the economic calendar today we have a 52-week T-bill auction at 11:30am.

Yesterday we printed a double distribution trend down. The day began with a gap down in range that buyers drove into off the open. Said buyers could not close the overnight gap before being met by strong responsive sellers who drove down below last Thursday/Friday low. After a bit of congestion along last Wednesday’s naked VPOC sellers held the mid and pressed a new daily low, effectively closing the Wednesday gap before discovering a responsive bid. The rest of the day was spent chopping before a late day ramp saw price nearing the bottom-side of the mid.

Heading into today my primary expectation is for sellers to press down through overnight low 13814 setting up a tag of 18,000. Look for buyers down at 13,788 and for two way trade to ensue.

Hypo 2 buyers work into overnight inventory and close the gap up to 13,896.75 then tag 13,900 before two way trade ensues.

Hypo 3 stronger buyers trade up to 14,000 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Gap down in range ;-) here is Monday trading plan

NASDAQ futures are coming into the week with a slight gap down after an overnight session featuring elevated range and volume. price was balanced overnight, first poking up above the Friday high then descending down through most of the Friday range. As we approach cash open price is hovering in the lower quadrant of last Friday’s range.

On the economic calendar today we ahve 3- and 6-month T-bill auctions at 11:30am.

Last week we saw a choppy Monday. Then a rally Tuesday. Afternoon sellers Wedneday. And then a strong rally into the weekend. NASDAQ price action lagged a bit, despite out performing on a percentage basis. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a normal variation up. The day began with a gap up just a bit beyond Thursday range. Sellers quickly drove into the open and resolved the gap and continued lower, briefly probing below the Thursday midpoint before popping back above it and chopping along the mid for a few hours. After lunch buyers worked up and away from the mid but stalled before going range extension up. Instead we threw back to the mid once more, buyers defended, and the late-day ramp ended up putting us into an range extension up. We ended near the highs.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 14,019. From here buyers continue higher, taking out overnight high 14,052.25 before two way trade ensues.

Hypo 2 sellers probe below Friday low 13,953.75 setting up a run down to 13,900. Look for buyers just below at 13,875 and for two way trade to ensue.

Hypo 3 stronger sellers tag 13,831 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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An attempt to anchor the old ego back to reality

Last week and the weekend were really something. Around Tuesday I kept saying that I, “struck the blarney stone,” which makes no sense. One kisses the blarney stone, and upon kissing it is mystically endowed with eloquence and persuasiveness.

In my brain I think I was making a Moses reference, when he was supposed to talk the rock into giving his people water but he bashed it with a stick instead and it gave water righty-o but then he had to roam the desert for like idk 20 years. But I was instilling it with some Irish luck, because I pushed my agenda on some fine folks and they responded kindly and my projects finally caught some traction. Around Tuesday.

Anyhow, then doge went bananas and sort of sent me for a spin after making quite the impression on my net worth. Suddenly, the doge I hold is catching up to the fiat american value of my dear TSLA position.

But in reality nothing has changed. I still wear 18 dollar Unionbay joggers every day with beat up vibram barefoot shoes that look like rags but make my old hips feel okay, and at night I either eat giant plates of sauteed vegetable or Del Taco drive thru all whist drinking cheap hooch.

I am reading The White Album by Joan Didion right now and it is the finest non-fiction I’ve read since the pandemic began. I want to share an exerpt from the chapter titled In Hollywood because it resonated with my speculative work and odd mentality of late:

“The place makes everyone a gambler. Its spirit is speedy, obsessive, immaterial. The action itself is the art form, and is described in aesthetic terms: “A very imaginative deal,” they say, or, “He write the most creative deals in business.” There is in Hollywood, as in all cultures in which gambling is the central activity, a lowered sexual energy, an inability to devote more than token attention to the preoccupations of the society outside. The action is everything, more consuming than sex, more immediate than politics; more important always than the acquisition of money, which is never, for the gambler, the true point of the exercise.”

I talk on the telephone to an agent, who tells me that he has on his desk a check made out to a client for $1,275,000, the client’s share of first profits on a picture now in release. Last week, in someone’s office, I was shown another such check, this one made out for $4,850,000. Every year there are a few such checks around town. An agent will speak of such a check as being, “on my desk,” or “on Guy McElwaine’s desk,” as if the exact physical location lent the piece of paper its credibility. One year they might be the Midnight Cowboy and Butch Cassidy checks, another year the Love Story and Godfather checks.

In a curious way these checks are not “real,” not real money in the sense that a check for a thousand dollars can be real money; no one “needs” $4,850,000, nor is it really disposable income. It is instead the unexpected payoff on a dice rolled a year or two before, and its reality is altered not only by the time lapse but by the fact that no one ever counted on the payoff. A four-million-dollar windfall has the aspect only of Monopoly money, but the actual pieces of paper which bear such figures have, in the community, a totemic significance. They are totems of the action…”

I think I need to get outside more man. I need to regain a pure sense of why I take to the speculative markets, day-and-day, methodically extracting fiat american dollars from the global financial complex. I know I’ve reiterated my purpose here a hundred times (land, cement, greenhouses, solar, etc) but I need to feel it viscerally, down in my plumbs for real. All this mouse click money has me a bit out of touch. I deserve to be successful and consistent. I work hard. I just want to make sure I remember the purpose.

Raul Santos, April 18th 2021

And now the 334th edition of Strategy Session. Enjoy:


Stocklabs Strategy Session: 04/19/21 – 04/23/21

I. Executive Summary

Raul’s bias score 3.80, medium bull*.  Sideways drift, perhaps with slight upward bias. Then look for Intel earnings Thursday after-market-close to put direction into the tape heading into the weekend.

*IndexModel flagged extreme Rose Colored Sunglasses bullish bias, see Sections III and IV.

II. RECAP OF THE ACTION

Choppy Monday. Rally Tuesday. Afternoon sellers Wedneday. Strong rally into the weekend. NASDAQ lagged a bit.

The last week performance of each major index is shown below:

Rotational Report:

After two solid weeks of sector rotations, with quality tech and discretionary leadership, the lowest quality sectors (utilities, staples, healthcare) were out front last week. Discretionary did manage to flank them.

neutral.

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Six weeks back we had major buy flows. Three weeks back we saw follow through on them. Then we had two big money flow pushes to the buy side. Two weeks back was balanced.

Last week skewed slightly negative.

Median return last week was over +75 basis points and volume delta over the last 30 days remains quite negative (-41%).

No word yet on having 1-week volume delta added to the screener.

Money flows are neutral.

Here are this week’s results:

III. Stocklabs ACADEMY

Extreme Rose Colored Sunglasses

When IndexModel logs a bias spread greater than +1 that tends to be a bullish signal. The beginning of the week has 50/50 odds directionally, but the later we go into the week the more the bullish statistics kick in.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Sideways drift, perhaps with slight upward bias. Then look for Intel earnings Thursday after-market-close to put direction into the tape heading into the weekend.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Semiconductors still flag along the highs, likelihood of more discovery up increases

Markets fluctuate between two states—balance and discovery.  Discovery is an explosive directional move and can last for months.  In theory, the longer the compression leading up to a break, the more order flow energy to push the discovery phase.

We are monitoring two instruments, the Nasdaq Transportation Index and the PHLX Semiconductor Index.

Transports are maybe coming into balance. Long term discovery up remains in tact.

See below:

Semiconductors still flagging along the highs. The longer they can hold these highs the more bullish it becomes. This industry group is becoming the highlight of policy lately, and is therefore subject to elevated geopolitical risk going forward.

See below:

V. INDEX MODEL

Bias model is flagging extreme rose colored sunglasses for a second consecutive week after being neutral Two weeks back and having flagged extreme Rose Colored Sunglasses three weeks back after being neutral four weeks before that after signaling Bunker Buster seven weeks ago after being neutral for the thirteen weeks prior to that.

Extreme Rose Colored Sunglasses calls for a calm sideways drift, perhaps with a slight upward bias. With a bias spread over +1 we expect buyers to pressure the tape higher late into the week.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“If you quit once it becomes a habit. Never quit.” Michael Jordan

Trade simple, dedication

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Curious Sunday observation

I’ll have my usual philosophical Sunday entry, along with the full Strategy Session up in a bit. But I wanted to drop a quick note about an interesting observation I just made. Since switching my research over from Exodus to cocklabs back in October, the bias scores generated by IndexModel have been moving nearly in lock-step with the hybrid/technical algo scores inside Stocklabs. Until these last three weeks. These last three weeks have seen the line diverge. Check it out, starting on April 4th Indexmodel has grown more-and-more bullish while algo score remain slightly bearish:

What does it mean? We don’t know.

It will be interesting to see how this abnormality in recent data resolves, and whether occurrences of this nature continue to happen, and if we can derive an objective means of action based off of it in the future.

Okay for now, back to work on the Strategy Session. Stay tuned.

Raul Santos, April 18th 2021 9:40am New York

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