iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
2,993 Blog Posts

Robots Ignored: RAUL Overrides The System

Salutations from the trading floors at iBankCoin laboratory!

Despite the latest readings inside Exodus Strategy Session indicating bearish conditions for the current week, the work horse of our operation, RAUL, improvised early Monday morning.  He determined that, given the strong gap and drive higher, the best course of action was to delay any short selling, selling of current holdings, or hedging.

Until sellers present themselves no selling of any kind will occur.

*  *  *

Sometimes a quantitative formula cannot see what the human can.  Think about your GPS, for example.  It may think the best route home is the highway.  The GPS may know a ho chi minh trail exists that offers a similar ETA, but it defers to the major roadways.  What it has not accounted for is the pop-up thunderstorm that came through 20 minutes before rush hour, and how soon its maps will be filled with volume delays.  Google maps cannot see these nuances.

Nuances are how humans continue to confidently lord over the robots.

In trading it’s called context.  And context is the difference between a competent trader and someone who thrives.

When more experienced market practitioners used to talk about context back when I was a fucking n00b it used to irritate me very much.  They sucked at describing it to me.  They could not present context in a way where I could mimic them.  In hindsight, and slowly, it is starting to make sense to me why they struggled to make context into a consumable lesson.

I did my best to codify context into something actionable.  It is called switchboard.  It is nothing more than an excel spreadsheet that has several switches for the various ‘contexts’ I’ve come to value over the years.  It looks like this:

It would be a lie if I told you all key context is contained in switchboard.  Context also comes in the form of news flow, geopolitics, seasonality, sentiment, and other intangibles.

*  *  *

The kind scientists at iBC labs are not thrilled to see our trading element ignore our weekly findings, but RAUL has presented us enough information to enact a manual override.  It is our duty to ensure he maintains protocol during his improvisational performance.  Should the mother algo inside Exodus generate a Hybrid Chg % reading of greater absolute value than Monday, a short bias must be reengaged by any means necessary.  Historically, we have been forced to use draconian measures to contain the spirit animal inside RAUL.

Until further notice, the bearish bias issued Sunday afternoon is not live.  We repeat, not live.  We are in a no-go-short zone.

carry on

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NASDAQ Flush With Gains; Here’s Your Mid-morning Trading Plan

NASDAQ futures are coming into the week gap pro gap up after an overnight session featuring elevated volume and range.  Price worked higher during all of extended trade, trading up into last Wednesday’s range.

The economic calendar is extremely light this week and today is no exception.  The only scheduled events today are T-bill auctions, 3- and 6-month auctions at 11:30am.

Last week we traded sideways, more-or-less.  The week began with a hard sell then we drifted.  During this time the Dow Jones diverged higher.  Below is the performance of each major index last week:

On Friday, the NASDAQ printed a normal variation down. Price opened nearly flat, just a slight gap down which buyers were unable to close.  Instead we drove lower early on.  Sellers ultimately could not take out the Thursday low and we instead settled into two-way trade.

At the open the /NQU7 (September ’17 contract, current front-month) printed an open-test-drive up. Price traded up the the Exodus Strategy Session’s weekly ATR band before churning sideways for a bit.

Heading into today my primary expectation is for sellers to defend the measured move level at 5725.75 sending us lower to test last Friday’s high 5707.50.  Buyers defend ahead of 5700 and two way trade ensues.

Hypo 2 buyers sustain above 5752.75 setting up a move to target 5775.25 before two way trade ensues.

Hypo 3 pole climb. Price sustains above 5777 setting up a trend up to 5876 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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The Sun Is Going Down: iBankCoin Laboratories Issues Second Bearish Bias of June

Greetings from the boiling hot surface of planet earth!

The kind scientists at iBankCoin labs have been toiling away inside the machine that is Exodus, checking and re-checking the learning computer’s readings, ensuring the readings are in fact accurate.  They are.  And all signs point to bearish action in the upcoming week.

If you recall, a short bias was issued heading into the first week in June.  This was a bad call.  However, and let it be known across the fin-dork interwebs, that we take our signals.  All of them.

Americans are barrelling towards solstice drunk on sun exposure, exhausted from one-too-many graduation ceremonies, and wholly unprepared for the furious impeachment measures being enacted by the deep state to unseat our authoritarian leader.

Enjoy your celebrations today, dads.  For next week we will do battle with the most evil force in nature: sellers.

Distinguished Exodus members, the 136th Edition of Strategy Session is live.  Go see all the other reasons why we are bearish heading into summer solstice.

 

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NASDAQ Flat: The June Contract Is Nearly Expired

NASDAQ futures are coming into Friday flat after an overnight session featuring normal range and volume.  Price worked up through the Thursday high, briefly overnight before settling into balanced trade.  At 8:30am Housing Starts and Building Permits data were below expectations.

Also on the agenda today we have the June preliminary reading of Confidence out of the University of Michigan.  There are no other major economic events.

Yesterday we printed a normal variation up.  The day began with a gap down and sellers working down through the Monday low.  Just a touch below Monday’s low buyers stepped in.  We then spent the rest of the day trading higher.  As a result, it appears we have failed auctions on both sides of the tape now.

Heading into today my primary expectation is for buyers to work up through overnight high 5720 and close the Wednesday gap up at 5733 before two way trade ensues.

Hypo 2 stronger buyers press up to 5767.75 before two way trade ensues.

Hypo 3 sellers press down through overnight low 5695.75 and buyers are found just below at 5681.50.

Hypo 4 stronger sellers send trade down to 5656.50 before two way trade ensues.

*Note: all levels are in reference to the June contract despite all active trading moving to the September contract.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ Back To Week’s Lows During Extreme Overnight Trade

NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume. Also, volume appears to have mostly shifted to the September futures contract.  Price worked lower most of the night, finding a bid just ahead of the Monday low.  At 8:30am Initial/Continuing jobless claims came out mixed.

Also on the economic calendar today we have NAHB Housing market index at 10am and Long-term TIC flows at 4pm.

Yesterday we printed a normal variation down.  The day began with a gap up that was sold early morning.  We then spend the rest of the day in a tight auction before the FOMC rate decision.  After the feds raised interest rates, third reaction analysis yielded the sell signal.  Price sold off until the end of the day, when a strong snap back rally occurred.

Said ‘snap back’ has been erased during extended trade.

Heading into today my primary expectation is for buyers to attempt a move back into the Wednesday range.  Look for sellers to reject a move back up through 5700, leading to a move down through overnight low 5651.25 that continues lower, down to the open gap at 5629.50 before two way trade ensues.

Hypo 2 buyers regain 5700 and continue higher, up to 5720, then up through overnight high 5726.50.  Look for buyers just above at 5731.50 before two-way trade ensues.

Hypo 3 stronger sellers press down to 5616 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Pole Climb Underway Ahead of of The Fed

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight and has been nudging up into the ‘pole climb’ area on market profile.  At 7am MBA mortgage applications came out positive but lower than last week.  At 8:30am Consumer Price Index and Advance Retail Sales both came out below expectations.

Also on the economic agenda today we have Business Inventories at 10am, crude oil inventories at 10:30am, and most importantly an FOMC rate decision at 2pm.

Yesterday we printed a neutral extreme up.  Day began with a gap up, sellers worked into overnight inventory and closed the gap.  An excess low formed, and we spent the rest of the day bidding higher, ultimately traversing the entire day’s range and closing near session high.

Heading into today my primary expectation is for a gap-and-go higher, up to 5800 before we pause ahead of the FOMC decision.

Hypo 2 sellers work into overnight inventory and close gap down to 5759.50 then continue down though overnight low 5739.50. Look for buyers down at 5728.75 ahead of the FOMC decision.

Hypo 3 stronger sellers press to 5703 before FOMC.

Use third reaction analysis after the FOMC decision to determine direction into the afternoon and the rest of the week.

Levels:

Volume profiles, gaps, and measured moves:

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Everything Negative About Yesterday Is Gone; Prosperity Returns To The NASDAQ Exchange

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight, slow and steady, hardly taking any time to trade sideways or lower.

The economic calendar is dead.  Like you probably do not need to trade today.  There’s a 4-week T-bill auction at 11:30am and a 3o-year bond auction at 1pm.

That is it, and everyone will likely at some point today start marking time ahead of Wednesday afternoon’s FOMC decision.

However, there is the potential for a pole climb, which is a way of describing a steady ascent up a thin and slippery surface (believe it or not).  In this case, the ‘surface’ is how our market profile is currently printed.  You can see what is being described as a pole on the colorful chart at the bottom of this blog entry.

Yesterday we printed a normal variation up.  People woke up freaked out.  All their fears about the tech sector had come to life and the NASDAQ was careening lower again, for a second day.  Price closed a gap left behind around 5/19, went a touch lower, then found a responsive bid.  We spent the rest of the day auctioning higher.  Buyers struggled to regain the low-end of balance formed Friday afternoon.

Heading into today my primary expectation is for buyers to gap-and-go higher.  Price works up to 5760 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 5720.  They continue lower, down through overnight low 5706.75.  Look for a bid around 5700 and two way trade to ensue.

Hypo 3 pole climb.  Price sustains above 5760 triggering an uninterrupted move up to 5800 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Burn Theta Burn: NASDAQ Starts Option Expiration Week Down A Quick 50 Points

NASDAQ futures are coming into the week with a pro gap down after an overnight session featuring extreme range and volume.  Price worked lower, starting around midnight, trading down near last Friday’s low before settling into two-way trade.

The economic calendar is light today.  Mostly Treasury auctions, see below:

  • 11am, 6-month T-bill, $33bln
  • 11:30am, 3-year Note, $24bln
  • 12pm, 3-mont T-bill, $39bln
  • 1pm, 10-year Note, $20bln

We also have a monthly budget statement at 2pm.

Last week major indices worked sideways until Friday.  On Friday a heavy wave of selling pushed through the market, hitting the NASDAQ particularly hard.  Last week’s performance of each major U.S. index is shown below:

On Friday the NASDAQ printed a trend down.  Price pushed down to levels not seen since late-May before a sharp responsive bid came into the market.  We did not trend the entire day, but a significant portion of the day was spent trending lower.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 5748.25 before two way trade ensues.

Hypo 2 sellers gap-and-go lower, down through overnight low 5670 and continue lower, down to 5651.50 before two way trade ensues.

Hypo 3 stronger sellers press down to 5615.50 before two way trade ensues.

Hypo 4 strong buyers ‘pole climb’ up to 5800 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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The Robots Want Higher: iBankCoin Labs Issues Bullish Forecast into Option Expiration

Greetings from the northern inferno!

Blistering heat has moved into the formerly sterile north.  And despite the extreme heat two robot slaves (one to shovel and one to stoke)   are keeping the Exodus furnaces at full power.

Ramming speed!

Where man’s flesh would degrade and exhaust the machines excel.  All systems are running smoothly and the instruments inside Exodus have been calibrated to insure accurate readings.  The theory is anyone can make the right decisions if they are presented with quality data.  The mental challenge is abandoning human emotions like fear, desire.  These things that make you human.

After parsing all the data created last week, including that powerful wave of selling that hit the NASDAQ Friday, the IndexModel has generated another bullish bias.  This is the second consecutive bullish bias, heading into the second full week of June.

Which is also option expiration week.  Quad-witching, in fact, since index futures will also expire.  Which means it could be a strange week.  Be ready for head fakes, both ways.

We have a signpost halfway through the week.  At 2pm on Wednesday there is a 99.6% probability that the Federal Reserve will  raise interest rates by 25 basis points.  How the market reacts to the hike is likely to give direction into the tail-end of the week.

However, combine OPEX with FOMC, add a dash of global warming—forcing massive herds of humans to seek living land—and there is the possibility of the fed reaction being a head fake also.

In short, this week may be challenging.  The higher time frame is likely to be active.  If you find yourself becoming emotional during the action, it is okay to step aside until the exchanges settles down.  But, if you can stay engaged and objective, there will likely be some bigger rotations to work with.

The robots are calling for higher prices.  Nothing crazy…just a sideways drift really.  Contextually, we are a bit more aware of future events than robots, which is why there is an added caveat from the good scientists at iBC labs that volatility may be elevated.

Sideways drift makes sense in this context.  A hard move lower to lure some shorts into the hole, or a fast move higher to entice some premium bidders at the peak.  Both parties upset.  June gloom, etc.

Overall, if the robots want higher, then we shall continue to work the long side of the market more aggressively than the short.

Distinguished Exodus members, the 135th edition of Strategy Session is live, go check out the other complications backing this week’s bias. 

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RAUL BUY: DICKS

Woke up this morning wanting more dicks so I went to the open market and procured more $DKS.

My first tranche of $DKS was purchased in the $50s like an asshole, back in January.  But I feel better emotionally after throwing more money at this losing trade.

What’s on your agenda today?

 

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