iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,111 Blog Posts

Risk cycle reset

The only thing that makes me a halfway successful investor is a technique I refer to as ‘faith-based investing’. What it boils down to is investing in individual stocks of companies that I believe down to my core will exist long after I return to the ethereal plane. To me these titans of capitalism are manifestations of the gods of history. They possess omnipotence and immortality — like ze gods. Alls I do is layer on a bit of cyclical understanding and stick to my guns. The risk cycle has played out about five or six times in my short existence and in this time I have formed a basic competence. And from the competence I present to you today, the rag tag folks of iBankCoin (many of whom are some of the lowest swine on the internet), my belief that the risk cycle has indeed reset.

Early in a risk cycle investors start to ease into safe bets. Look at Walmart, for instance. Nearly trading at all-time highs, offering one of the finest dividends one can access. Selling groceries and hundreds of thousands of other consumer goods for a modest 25% profit. Walstreet is rewarding this behemoth for its size (largest employer in 39 american states) and durability. Early risk cycle winner.

Mega big tech has fared well as of recent. Tickers like GOOGL are sharply off the lows printed around Halloween.

Can I saw with certainty that the S&P 500 or the NASDAQ have bottomed? No. But I am gaining a ton of confidence that the overall risk cycle has been reset.

So we leg into these mega caps, then maybe early next year we can start to dabble in higher risk stuff like Rivian and crypto. And eventually, way down the line, we can run those cute penguin pictures again. But not yet.

Listen, the bearshitters have had their run of the joint pretty much all year long. They’re getting so loud. Almost as loud as I was this time last year, but of course for different reasons.

The perma-bull is a different kind of plauge. A perpetual optimist, who stares at reality with some kind of distorted lense that shows progress, the end of religion and state, giant glass buildings, autonomous low cost transportation for all, universal basic income that covers shelter, healthcare and foodt.

A bunch of folks simply existing — wandering around, writing stories and enjoying life.

These bearshitters…I dunno man, they’re fucked up. They want death. They become giddy over the potential of world war. They throw shade on anyone building.

If I must be diagnosed with a terminal illness, let it be permabullishness.

Raul Santos, November 20th, 2022

And now the 411th Strategy Session. Happy Thanksgiving!


Stocklabs Strategy Session: 11/21/22 – 11/25/22

I. Executive Summary

Raul’s bias score 3.00*, neutral. Markets drift through the beginning of the week. Then look for lots of economic data due out Wednesday (durable goods, jobless claims 8:30am ET, PMI 9:45am and Fed minutes 2pm) to put some direction into the tape ahead of the holiday.

*Rose Colored Sunglasses bearish bias triggered, see Section V.

U.S. markets will be closed Thursday, November 24th in observation of Thanksgiving and will resume trading for a half day Friday the 25th.

II. RECAP OF THE ACTION

Chopped higher through early Tuesday, lower through mid-day Thursday, then back to the middle heading into the weekend.

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

Rotational Report:

Rotations flipped back to risk aversion last week after flipping bullish two weeks back.

neutral

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

Concentrated Money Flows:

Money flows went back into balance after breaking balance to the buy side two weeks back.

slightly bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Sticking to the stats

If you look at the 10-year backtest of the 6-month overbought signal, Stocklabs returns 62 samples. After day five is when the signal becomes most bullish. These next five trading days, historically, according to Stocklabs have had a higher probability of positive returns.

Keep it simple.

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:

Markets drift through the beginning of the week. Then look for lots of economic data due out Wednesday (durable goods, jobless claims 8:30am ET, PMI 9:45am and Fed minutes 2pm) to put some direction into the tape ahead of the holiday.

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]:

Weak ether, balance elsewhere

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Transports sort of lingering on the upper-end of balance.

See below:

Semiconductors have found resistance at old support levels so far, and appear to be settled into balance.

The swing lows on ether are looking increasingly weak. A test below 1k seems more likely with each day we linger down here.

V. INDEX MODEL

Bias model is RCS bearish after being e[RCS] bullish last week following two neutral weeks. Before all this we had two consecutive weeks of extreme Rose Colored Sunglasses (e[RCS]) bullishness.

So the count is at three e[RCS] in recent history.

There were five Bunker Busters in recent history — eleven weeks ago, twenty weeks back, twenty-seven weeks ago, fourty reports back and forty-two reports back.

Here is the current spread:

VI. Six month hybrid overbought

On Friday, November 11th Stocklabs went technical and hybrid overbought on the six month algo. This is a bullish cycle that runs through Monday, November 28th . It runs a bit longer due to a trading holiday for Thanksgiving.

Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“I saw an angel in the block of marble and I just chiseled until I set him free.” – Michelangelo

Trade simple, extract the edge

Comments »

Press risk into the eyes of OPEX

The primary goal of America is to secure an estate as best as possible before becoming too oldt to work. There are risks all along the way, from the moment one enters the labor pool till the bitter end when day time teevee commercials try to scare you into usurious lending and insurance schemes. Play your cards right and in fifty years or so you can lay claim to many acres of productive land and a sturdy set of structures for keeping your little empire warm and fed and safu.

But for a select few America, and by extension western culture, is a high stakes game of monopoly. There are very few rules except that he who has the most tends to win. This is a hardt life and I do not envy those who take to playing it. A giant target is printed on them, and the assults come in every form—seduction (lechery), latch ons (leechery), angry mobs of socialist plebs, the no dang good fourth estate, the archaic nation states and ultimately the fellow players of the game.

Everyone’s approach is different. From Donald’s ascent through real estate to politics, to Elon’s internet banking schemes pivoted into manufacturing and software, to Bezos’s putting boxes out, to Sam’s altruistic (autistic?) games of speculative risk with a whole new monetary system.

Anyone whose played Monopoly knows only one person wins.

I’d rather play estate building. Lots of folks win that game here in America all the time.

THAT BEING SAID. My job is quite simple. To extract as much fiat as possible from the global financial complex. To keep my bullshit meter calibrated. To then use said funds to buy estate assets like LANDT, STEEL, MACHINES, quality machines that help me be left alone. Big strong borders of shrubs and thorns and trenches. Greenhouses and irrigation systems and strong vegetable genetics.

Goats and chickens and the infrastructure to keep them healthy.

A nice strong woman who can pull a plow and hold a room’s attention.

So I do all this research. And now that winter is here I will work on getting back to active trading.

The research this week says to press longs full plum into option expiration week. This carrys us into the lovely Thanksdgiving, the wretched Blackened Friday, and then right into month-end.

So maybe we press clean through year end. We dunno.

As always, we’ll take it one week at a time. And with any luck, I’ll build out my trading systems again and we’ll go back to taking it one morning at a time.

I work hardt for myself and for the good folks of the interwebs. For estate! For the robots! Ole!

Raul Santos, November 13th, 2022

And now the 410th edition of Strategy Session.


Stocklabs Strategy Session: 11/14/22 – 11/18/22

I. Executive Summary

Raul’s bias score 3.88*, medium bull. Markets drift higher through option expiration. Watch for earnings out of Walmart (Tuesday before-market-open) and Nvidia (Wednesday after-market-close) to add some choppiness to the action.

*extreme Rose Colored Sunglasses bullish bias triggered, see Section V.

II. RECAP OF THE ACTION

Choppy through early Tuesday, then a bit of selling pressure through Wednesday. Very strong upside reaction to CPI data Thursday with come continuation higher Friday and into the weekend.

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

Rotational Report:

Rotations flipped to ideal bullish last week.

bullish

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

Concentrated Money Flows:

Money flows broke balance to the buy side, led by key industry drivers like semiconductors.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Ether stays decoupled, only now it’s the most bearish (and a note on overbought signal)

Ethereum was independently bullish two weeks back, and then last week it was independently bearish. A big part of that was news that major crypto brokerage FTX fucked up client funds, comingling them with the proprietary trading desk and being pushed (rather rapidly) into bankruptcy.

Seeing risk assets behave independent of one another is a good sign for investors. It could signal the end of a broad corrective environment in all risk assets.

***

When it comes to Stocklabs signals, you want to dig into the intelligence to see what has happened historically. If you look at one year of data on the six month overbought signal, you will see it statistically resulted in lower prices of the 10 days that followed. However that sample set is small.

Any serious stat head will look for at least fifty samples to consider a data set significant. To that end, one must expand the signal out to five years. And when you go out to five years, the six month overbought signal has been bullish.

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:

Markets drift higher through option expiration. Watch for earnings out of Walmart (Tuesday before-market-open) and Nvidia (Wednesday after-market-close) to add some choppiness to the action.

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]:

Room inside balance for some, weakness in ether

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Transports are probing the top-side of a range that is sort of being established. A bit more headroom perhaps.

See below:

Semiconductors broke their trend channel and have a bit more room to the upside before coming into an old support zone. One of the markets favorite pastimes is converting old support into resistance and vice versa, effectively trapping counter parties.

We had ether on a path to 1700. It stalled out at 1682 on the CME before the FTX news hit. Since then it has nearly taken out recent lows. That bounce just above what was already a kinda bummy looking low has made the current swing low look even weaker.

V. INDEX MODEL

Bias model is once again extreme rose colored sunglasses bullish after two neutral weeks. Before all this we had two consecutive weeks of extreme Rose Colored Sunglasses (e[RCS]) bullishness.

So the count is at three e[RCS] in recent history.

There were five Bunker Busters in recent history — ten weeks ago, nineteen weeks back, twenty-six weeks ago, thirty-nine reports back and forty-one reports back.

Here is the current spread:

VI. Six month hybrid overbought

On Friday, November 11th Stocklabs went technical and hybrid overbought on the six month algo. This is a bullish cycle that runs through Monday, November 28th . It runs a bit longer due to a trading holiday for Thanksgiving.

VII. QUOTE OF THE WEEK:

“The best defense is a good offense.” – Dan Gable

Trade simple, press your edge

Comments »

Stalemate

For about the second time this year it seems buyers and sellers have come to a draw, and without some intervention they’re likely to sort of stick around these levels for a bit.

Boy-o-buddy did we thrown one heck of a who-ha yesterday. Despite wind gusts upwards of 50mph we managed to draw well over a hundred folks to the urban farmstead. It was a real show of power, over both the hearts of minds of the people and nature.

That said, I very much look forward to setting the farm work aside for the next six months and to make to to make to for to make to recluse myself into books and lifting iron.

Updating my research.

And getting back to trading.

Raul Santos, November 6th 2022

And now the 409th strategy session.


Stocklabs Strategy Session: 11/07/22 – 11/11/22

I. Executive Summary

Raul’s bias score 2.80, neutral. Watch for earnings out of Berkshire early Monday to set the tone for markets to start the week. Then third reaction to CPI data Thursday morning provides visibility on price action into end-of-week.

II. RECAP OF THE ACTION

Bit of a rally to begin the week before some heavy selling Tuesday. Then third reaction to the FOMC rate hike Wednesday resolved lower and that selling carried into Thursday. Friday markets sort of caught a bounce. Except for the Russell, which was bearish divergent.

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

Rotational Report:

Our best sectors came under pressure last week, perhaps in part due to big tech earnings the week prior. Nothing about last week’s rotations bodes well for equity bulls.

bearish

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

Concentrated Money Flows:

Money flows were pretty balanced.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Ether decoupled from stocks a bit

Ethereum was bullish divergent last week and steadily marched higher, even shaking off the Fed rate hike volatility spike. This commodity finished nearly on its weekly high.

Interesting to see risk assets start to behave independent of one another. Perhaps we are beginning to stabilize.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Watch for earnings out of Berkshire early Monday to set the tone for markets to start the week. Then third reaction to CPI data Thursday morning provides visibility on price action into end-of-week.

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]:

Stabilizing across the board

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Transports are sort of wiggling around inside range.

See below:

Semiconductors may have formed a higher lower. We saw buyers defending their conviction zone on Friday.

Ether seems to be drawn to the seventeen hundred level.

V. INDEX MODEL

Bias model is neutral after two consecutive weeks of extreme Rose Colored Sunglasses (e[RCS]) bullishness.

There were five Bunker Busters in recent history — nine weeks ago, eighteen weeks back, twenty-five weeks ago, thirty-eight reports back and forty reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“Do your own thinking independently. Be the chess player, not the chess piece.” – Ralph Charell

Trade simple, do your own research

 

Comments »

How dare you

What the hell kind of tomato soup are those Just Stop Oil activists throwing onto all those arts? Like what is going on in Europe that makes their tomato soups bright orange? God and the dark lord am I grateful to live in America. But those no dang good Wall Street investors and analysts are a pox. A pox I tell you. On this great nation. How dare they punish Big Tech the way they did last week.

I dunno. Maybe they deserved it. Watching Musk fire all these overpaid punks at Twitter has really been a joy. There is an entitlement perhaps, in Big Tech, that warrants a repricing of these wonder stocks. But -70% in one year for Meta? Because they had the courage to use all their moneys to build something new…that’s just the purposely esoteric complications of the global banking complex wielding too much power. Don’t even get me started on what they did to that poor Liz Truss.

Amazon did not need to trade below 100. Not even for a minute.

Alphabet will be fine. They spend two dollars to make two hundred, and I’m certain they can predict the future they just don’t want anyone to know. And can you blame them? The freaking White House would probably send in a team of geriatric Feds to bust up the place and install a few thousand fax machines so they can have meetings about meetings and hinder any and all progress for a hundred years.

I’m at a crossroads here. It is easy to point the finger at forces beyond my power like the citadel but the truth is my hands have turned to ice. I knew this would happen.

If you recall, I made a metric fuckton of money in 2020 and 2021, riding massive moves in Tesla, Doge, and just working the dang NASDAQ futures market like a savant.

But it wasn’t my first time sipping from that sweet chalice of success, of extracting numbers from the computer at an unholy clip. I knew what came next in my psyche.

GREED.

Every Halloween I put a bowl of candy out with a cautionary sign reading, “If you are greedy, a monster will come for you.” I try to pass on this hard-earned wisdom and who knows? Maybe this monster does not plague everyone like it does me and maybe I shouldn’t put such an absurd sign on the porch for children to read.

Maybe there is a better way for me to sear that message onto my soul.

But anyhow I knew after all those wins it was time to step back my activity and reduce risk.

I did better than last time but hot dog I had no freaking idea META would be capable of going -70% in eleven months.

This market is an endless source of painful lessons and ego killers.

So here I am. Stunned.

I need to do what I should have done months ago and turn my dang market profiles back on. That’d be a start.

Alright, enough lamenting.

Thank you Elon for checking the privilege out there in San Fransisco. Shame on Wall Street for being so freaking averse to change. And let us do better at expecting anything from these markets.

Raul Santos, October 30th 2022

And now the 407th edition of Strategy Session.


Stocklabs Strategy Session: 10/31/22 – 11/04/22

I. Executive Summary

Raul’s bias score 3.85, medium bull*. Markets continue to sort of chop higher early in the week. Then watch for third reaction to the FOMC announcement Wednesday afternoon to provide direction into the second half of the week. Non-farm payroll data due out Friday morning could serve to accelerate or pivot the prevailing price action ahead of the weekend.

*extreme Rose Colored Sunglasses bullish bias triggered, see Section V.

II. RECAP OF THE ACTION

Choppy-to-higher early in the week. Selling pressure Thursday. Strong rally Friday and into the weekend.

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

Rotational Report:

Not ideal sector leadership. Utilities strong suggesting risk aversion. Financials strong suggesting higher interest rates are benefiting these institutions at the cost of progress.

neutral

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

Concentrated Money Flows:

Money flows skewed majorly to the buy side.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Big Tech dismantled

Big Tech did not shine like we expected. This key industry group was the subject of harsh criticism all week long, both sentiment wise and through price action on their shares. Only Apple managed to come out of earnings in tact, and even their earnings showed a slightly weaker-than-expected consumer as they missed their estimates for sales on the latest iPhone (14?).

What I am witnessing for the first time is just how much Wall Street investors are averse to change. Everything Meta has done in particular has put them on the receiving end of price action I can only chalk up as irrational.

They threw their hat in with the metaverse and their shares are off by about -70% year-to-date.

We do not know the true value of META. But if I had to guess, it is somewhere between where it trades today and where it traded this time last year.

Markets can stay irrational loner than you can stay solvent, is a warning passed down through trading lore. But the truth is, if there is no leverage in place, and we are industrious lads who earn money outside of this arena, then we can in fact ride out irrational moments in price action.

Is that what I intend to do? I’m not sure. I’ve spent about 18 hours inside Meta’s latest headset (Quest Pro) and I am really trying to justify owning it verse the Quest two. It is more comfortable. But functionality is not blowing me away.

Meanwhile there seems to be lots of competition in this so called metaverse.

It really sucks to ride a stock from peak to down -70%. Does that mean I should never change my mind and keep my capital in place? Only if I truly believe in the leadership and the product.

Boy am I trying. But for all of Mark’s qualities, he doesn’t have the panache of Elon.

It’s a tough call. For now I will do nothing.

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:

Markets continue to sort of chop higher early in the week. Then watch for third reaction to the FOMC announcement Wednesday afternoon to provide direction into the second half of the week. Non-farm payroll data due out Friday morning could serve to accelerate or pivot the prevailing price action ahead of 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]:

Strong bounce from Semiconductors, what’s next?

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Transports appear to be in range and doing well to work through to top-side of it. Balance is bullish until proven otherwise.

See below:

Semiconductors are in this descending channel, but it would be remiss to not acknowledge how old this discovery down phase is. I am looking for a new balance to form down here.

Ether shot up out of balance and could be starting a new leg of discovery higher.

V. INDEX MODEL

Bias model is extreme Rose Colored Sunglasses (e[RCS]) bullish for a second consecutive week after having five weeks of neutral readings. e[RCS] calls for a calm drift, perhaps with a slight upward bias.

There were five Bunker Busters in recent history — eight weeks ago, seventeen weeks back, twenty-four weeks ago, thirty-seven reports back and thirty nine reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“Many a false step was made by standing still.” – Fortune Cookie

Trade simple, focus

Comments »

Step aside banksters, your Big Tech usurpers have something to say

Buddy I gotta tell you, seeing bankers wield all this power in 2022 really has my knickers in a bunch. Their days of building powerpoint decks and pushing numbers around on spreadsheets have gone on far too long. Sucking all the best talent out of top American universities and for what? Putting them to work on beeps and boops that wiggle numbers on a screen.

The real builders of OUR FUTURE are hard at work in silicon valley (and more-and-more worldwide) making human existence a bit more bearable with things like robots and spreadsheet software and virtual reality doohickeys.

And these immortal and all seeing greats with names that resonate through time like GOOGLE and APPLE (the forbidden fruit?) will soon claim the throne of LEADERS OF THE WORLDT.

Lines on a map, man. Lines on a map drawn by the privilaged to opress folks simply for being born at the wrong latitude.  Makes me sick.

I spit on your map and challenge any and all borders to be mere figments of the imagination.

Listen I’m all for anarchy to an extent, but being a simple farmer in the heart of america’s rust belt has taught me that community is really a challenge to cultivate. Yee wants to build a micro-city. Yee is a fucking legend but also a chooch. Giving off mega Who is John Galt? vibes.

It is sick to want total power over a people. I say let folks do whatever the heck they want. Their freedom to swing their fists ends where my nose starts. It is much more virtuous, and perhaps more challenging but certainly worth it, to micro-city build together with the people.

Will it be perfectly to our liking? We dunno. But that which isn’t can be augmented to be thanks to Mark Zuckerberg and his crack pot team of scientists and engineers who are hard at work building our world beautification lenses and bug consumption pods .

At the heart of it all is Man’s crisis to put meaning to life. To find the answers. Problem is many a static society has been trapped by elders who persist in asking the wrong questions.

The meaning of life is to use is however one sees fit.

Hopefully with a lot less bloodshed than our predesssors.

Now don’t get me wrong. If it came down to me or the squirrel I’d be knocking those beatuful creatures in the head with a small lead projectile and making tasty stews. But it isn’t. As it stands my meats are manufactured in a laboratory operated by a face-eating psychopath. Ma corns pop right up out of the ground and so does everything else I eat.

No one’s master. No one’s slave. Except perhaps the plants.

Okay for now.

***Barrelling headlong into Big Tech earnings with bags fully risk loaded***

Raul Santos, October 23rd, 2022

And now the 406th Strategy Session.


Stocklabs Strategy Session: 10/24/22 – 10/28/22

I. Executive Summary

Raul’s bias score 3.75, medium bull*. Markets drift sideways-to-higher all week long.

Major NASDAQ components Microsoft and Alphabet set to report earnings Tuesday after-market-close, Meta Wednesday and Apple and Amazon Thursday. All after-market-close.

*extreme Rose Colored Sunglasses bullish bias triggered, see Section V.

II. RECAP OF THE ACTION

Strong rally Monday. Violent consolidation through early Friday which ultimately resolved higher. The Dow lead during the week.

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

Rotational Report:

Rallied in the right sectors.

bullish

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

Concentrated Money Flows:

Money flows skew over to the buy side.

slightly bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Big Tech’s time to shine

Expecting earnings out of our Big Tech giants to dominate the price action next week. There is a lot going on geopolitically and with central banks, but investors already have strong visibility on those aspects for the next 30 days or so (barring some unexpected news).

What they don’t have much visibility on is the performance of Big Tech, which is a force on par with many governments.

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:

Markets drift sideways-to-higher all week long.

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]:

Transports held range, semiconductors caught a bid

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Transports held range low. The low is ugly, but better looking then the prior low set back in July. Expecting this key index to drift higher next week.

See below:

Semiconductors may still be in discovery down, but they found some conviction buyers around levels that were trading back in summer of 2019. Then Friday they defended a test back into that conviction zone. Primary expectation is for a test up to that former support to see if sellers can defend.

Ether stable. Clearly in balance.

V. INDEX MODEL

Bias model is extreme Rose Colored Sunglasses (e[RCS]) bullish after five weeks of neutral readings. e[RCS] calls for a calm drift, perhaps with a slight upward bias.

There were five Bunker Busters in recent history — seven weeks ago, sixteen weeks back, twenty-three weeks ago, thirty-six reports back and thirty eight reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“A man is rich in proportion to the number of things he can afford to let alone.” – Henry David Thoreau

Trade simple, concentrate your resources

Comments »

TIREDT

Married my dear friends yesterday and then danced with the fire worshipers and you know what? It took me like four hours to put the weekend research together. But it is my duty and I shall adhere to it until my dying breath.

By the way, I really don’t care that the Fed is dismantling risk assets. Soon I’ll be driving my cybertruck to and from the most absurd bug-out farmstead in the heart of America’s rust belt. Right by the dump. I’ll be wearing a Meta Quest Pro and augmenting trippy pictures over anything I’d rather not see. Listening to whale noises and growing punkin.

And along the way, I’ll ride META for a 10x.

It’s all so tiresome, but alas, this is the life of a space cowboy speculator touched by the gods.

See you in the so called metaverse buddy.

Raul Santos, October 16th 2022

And now the 405th edition of Strategy Session.


Stocklabs Strategy Session: 10/17/22 – 10/21/22

I. Executive Summary

Raul’s bias score 2.75, medium bear. Choppy and indecisive through Wednesday. Then look for Tesla earnings after the bell to put direction into the overall market.

II. RECAP OF THE ACTION

Choppy and indecisive though Thursday morning. Then a strong sell and subsequent recovery when CPI hit. Rally though Friday morning then more selling pressure into the weekend.

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

Rotational Report:

Hard week for Tech and Discretionary.

slightly bearish

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

Concentrated Money Flows:

Money flows skew back to the sell side.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Trading the CPI

Thursday morning the CPI data was met with extreme volatility. Traders and their algorithims have discovered how to really move the markets during this data point, which is so closely watched now that the Fed is targeting inflation. These types of moves are great to catch as an active trader. They key is having rock solid risk management in place. Because these big moves can just as quickly become a nightmare. Even if they reverse, they may result in an account liquidation along the way.

There’s nothing wrong with being on the sideline, but familiarizing oneself with trading ‘hot’ data points can be quite a lucrative venture.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Choppy and indecisive through Wednesday. Then look for Tesla earnings after the bell to put direction into the overall market.

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]:

Transports really trying to stay in range

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Transports saw buyers defend range low again Thursday, printing a fairly strong conviction candle after making a new short-term swing low. The thing is, sellers reversed much of it Friday. As of right now the range still appears in tact.

See below:

Semiconductors are in discovery down until otherwise noted.

Ether still balancing and more stable then equities.

V. INDEX MODEL

Bias model is neutral heading again. The fifth consecutive neutral reading. No bias.

There were five Bunker Busters in recent history — six weeks ago, fifteen weeks back, twenty-two weeks ago, thirty-five reports back and thirty seven reports back.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“It is impossible to live without failing at something, unless you live so cautiously that you might as well not have lived at all — in which case you fail by default.” – J.K. Rowling

Trade simple, accept the setbacks

 

Comments »

Time to conjure the old gods

Gonna see a bit less of your old pal Raul out there on the interwebs in the upcoming week. I have several civic duties to attend to, and it would be a selfish distraction to fritter the precious moments of the upcoming six days away on  the Twitter. The city needs me.

The old crew is assembling from across the country right here in the spooky capital of america—Detroit. I have been called upon to officiate a pagan handfasting ritual. This must be done in such a way to please to gods and solidify the commitment of these two wonderful people.

I am bringing in an additional axeman to help me keep several large fires burning during the week. These will serve to cleanse the grime off the travelers and extinguish the notion of summer from our minds.

Then it is off to a most hedonistic and demonic masquerade to indulge in any and every pleasure and vice.

Perhaps I shall come out the other end of the festivities with some clarity and more kindness. Lately my only looping thought has been to make to kill. That needs to go away if I am to profitably engage these auctions.

That is my intention. To seek clarity from kindness and to integrate a polished lens into my work and hustle.

Until then, I bid thee adieu.

Raul Santos, October 9th 2022

And now the 404th Strategy Session.


Stocklabs Strategy Session: 10/10/22 – 10/14/22

I. Executive Summary

Raul’s bias score 2.50, medium bear. A little continuation selling early Monday before buyers make another push to start the week. Then look for the markets to digest FOMC minutes Wednesday afternoon, Taiwan Semiconductor earnings and CPI data Thursday morning and eventually for the market to take direction into the weekend.

II. RECAP OF THE ACTION

Solid rally through Tuesday. Some selling pressure during globex Tuesday night and into Wednesday morning. Another solid rally Wednesday. Choppy Thursday before heavy selling post non farm payroll data and into the weekend.

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

Rotational Report:

Energy trading in its own word, printing a strong week. Utilities see another week of selling while everything else sort of treads water.

neutral

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

Concentrated Money Flows:

Money flows managed to skew to the buy side for the first time in several weeks, mostly driven by oil industries and materials.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

In touch with the news, out of touch with the auction

Something I’ve noticed in my own behavior during open market hours. I have become increasingly obsessed with the news flow — I could talk about any and every bit of current events from celebrity gossip to the Slavic war to who is saying what at the Federal Reserve to the latest White House actions to Elon’s every corporate action to which NFTs are holding community meetings. You name it.

Yet I couldn’t tell you where the nearby value zones are for the NASDAQ 100 or whether the Russell is demonstrating relative strength or how the internals are looking on the NYSE.

I’ve managed to allow my attention to become obsessed with the wrong information. Going to really dial back my screen time, especially on the mobile device, this week.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

A little continuation selling early Monday before buyers make another push to start the week. Then look for the markets to digest FOMC minutes Wednesday afternoon, Taiwan Semiconductor earnings and CPI data Thursday morning and eventually for the market to take direction 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]:

Ether steady the others weak

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Transports started to build another weak low last week. Maybe it will hold for the short term, but it certainly is not the type of low we want to move away from for any substantial amount of time.

See below:

Semiconductors look to be discovery down for a second week. The $TSM earnings due out Wednesday could stabilize this otherwise downward descending index.

Ether balancing out and holding steady, decoupling a bit from equities.

V. INDEX MODEL

Bias model is neutral heading into the first week of the fourth quarter. The fourth consecutive neutral reading. No bias.

There were five Bunker Busters in recent history — five weeks ago, fourteen weeks back, twenty-one weeks ago, thirty-four reports back and thirty six reports back.

Here is the current spread:

VI. 12 month hybrid oversold

On Friday, September 23rd Stocklabs went hybrid oversold on the 12 month algo. This is a bullish cycle that runs through October 7th, end of day. Here is the final performance of each major index. Interesting how the Russell outperformed during this cycle:

VII. QUOTE OF THE WEEK:

“When life seems hard, the courageous do not lie down and accept defeat; instead they are all the more determined to struggle for a better future.” – Queen Elizabeth II

Trade simple, keep going

Comments »

Steady lads these cups are really wiggling

Been consuming financial, tech and geopolitical news like a glutton all week. Waking up at 5am (no alarm) full of power. Will read for a bit then it is on to Twitter — which despite every effort (or lack thereof) — is still the greatest information platform on the planet.

The interesting thing about this slow burn we’ve endured since November is how many people are actively communicating that this is nothing like the a real crash even though most of the best investments of the last five years are down somewhere between -45% and -90%.

I dunno man, I’ve been through a few of these cycles and it sure feels like the last times.

Pain.

But as a masochist and a hedonist there’s a warm familiarity to it all. My own arrogance early on. My acceptance midway. There internal battles to stay kind. The embarrassing outbursts and then finally the unadulterated indifference of a cold dead observer.

Winter is coming and soon I will have lots of time at my disposal to sit around and retool my trading systems. At least that is the exception.

I do have to tear down an entire blight house, but I’ve given it a few solid walk around and I think if I hook the f-250 shit kicker to one of the outer walls I can pull the whole bitch down in one fell swoop.

Then a few days of sawing and moving rubble and voila! Our dear Detroit is one step closer to four from three.

You see lads, while I am arrogant, perhaps my greatest super power is total acceptance that I know nothing. Folks think it hurts my pride when they point out that I come out here, every hecking week (and historically morning) and write 200-1000 words about how we might go higher or we might go lower. We don’t know. But theirs is a delusion if they think otherwise.

The past is certain, but present and future are the domain of fortuna.

And of course we’re gonna spin fortuna’s wheel. We have no choice if our intentions are to make our way through life as kindness and profit oriented thingies.

How do we make these decisions, if we truly don’t know?

We need unbiased information for one. These bits of data are our best glimpse at immutability. Then we use these observations to perform tests. Then we adjust along the way.

Then we need risk management.

Then we need records of our battles to review and improve upon.

Okay I gotta go.

Raul Santos, October 2nd, 2022

And now the 403rd edition of Strategy Session.


Stocklabs Strategy Session: 10/03/22 – 10/07/22

I. Executive Summary

Raul’s bias score 2.43, medium bear. Buyers step in early on this week and rally price higher.

II. RECAP OF THE ACTION

Choppy and lower through early Wednesday. Strong rally Wednesday. No follow through. Sellers pressured the tape lower into quarter end.

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

Rotational Report:

Utilities smashed during this latest round of selling. Perhaps this is like the inverse of the tail end of a rally? Where Utilities outperforming to the upside signals caution bulls. Key Tech sector also leading through

bearish

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

Concentrated Money Flows:

Money flows skewed to the sell side after two prior heavily sell side skews.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Everything looks bad

The technicals look pretty awful across the board. Yet IndexModel is not signaling the Bunker Buster again. Recall there was a signal two reports back. Meanwhile Stocklabs is halfway through a 12-month oversold cycle.

So far buyers have been unable to regain control of the tape, despite a few attempts last week. But as we peel back the layers via top-down analysis (index, sector, industry) we notice that the selling last week was pretty mild.

I think in many ways it ‘felt’ worse than it actually was.

Maybe the other shoe drops next week and we really start to nose dive. We don’t know.

But sentiment (and the charts) are quite negative.

So negative we rally?

Again, we don’t know.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers. (First time in a few reports where the end-of-week auction was headed lower.)

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Buyers step in early on this week and rally price higher.

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]:

Ether looks decent

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Looks like Transports could lose range. Some would say they already have. I’d argue they’re still holding on to balance. Barely.

See below:

Semiconductors on the other hand have resumed discovery down. I highlighted the next level I am interested in.

Ether still looks balanced. Much more balanced then the other two indices.

V. INDEX MODEL

Bias model is neutral heading into the first week of the fourth quarter. The third consecutive neutral reading. No bias.

There were five Bunker Busters in recent history — four weeks ago, thirteen weeks back, twenty weeks ago, thirty-three reports back and a thirty five reports back.

Here is the current spread:

VI. 12 month hybrid oversold

On Friday, September 23rd Stocklabs went hybrid oversold on the 12 month algo. This is a bullish cycle that runs through October 7th, end of day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“It is worth remembering that it is often the small steps, not the giant leaps, that bring about the most lasting change.” – Queen Elizabeth II

Trade simple, tweak your approach as needed

Comments »

Dip buyoor

Woke up early this Sunday, day of the witch. My powers grow stronger every day as we cruise through harvest season, pulling lumps out of the dirt and hustling them into fiat american dollars and then hustling those dollars into stuff that’s actually valuable. Things like machines and tools and equities. Bought some dang bitcoin this morning.

I know I’m fighting the Fed and I expect to be ‘wrong’ for a long time. But maybe that is the difference between me and your average american football and nacho consumer. My work has only begun. At 5am I rise without an alarm, cockstrong, the dang thing practically heaving me off the bed.

Then I go to work because why not? I’m awake.

I’ve been a vegetarian for nearly seven years now and it’s really starting to pay dividends. I have the vigor of ten men and the kindness of Manjushri.

Yep things sure are going well for your dear and gentle pal Raul. And as such I am buying this dip.

I couldn’t care less about the constant threats of the fear dealers on teevee and the interwebs. The progressive agenda has advanced so far into enemy territory that I am shielded from those country road flag flyers. I am amongst the bandits and they are to be respected, but by no means feared. If they ever make a move on me it will be a miserable day for their families. For them it will simply be the end and that’s not so bad.

My powers grow.

With every 10 degree drop in temperature my inner fire grows hotter. I cannot imagine doing stimulants like adderall or crack rock when I already pace around this derelict outpost for 15 hours a day. Sitting here to pen this blog entry is a great challenge as all I want to do is make to kill.

So if you’re too old to holdt for ten years whilst using your mind and muscles to go out and secure moar monies, than sure, be afraid. Your entire focus is wealth preservation. But I am on a warpath of CREATION.

Raul Santos, September 25th 2022

And now the 402nd Strategy Session


Stocklabs Strategy Session: 09/26/22 – 09/30/22

I. Executive Summary

Raul’s bias score 2.45, medium bear. Expecting sellers to attempt some follow through downward action early in the week. Then a rally into month-end.

II.  RECAP OF THE ACTION

Rally Monday. Sustained gains through Wednesday until the FOMC meeting. Price action resolved lower after a down-up-down reaction. Sellers dominated the tape late into Friday trading before a bit of a ramp into the weekend.

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

Rotational Report:

Recall we had two weeks of full risk off rotations, then a strong risk on rotation. Then another major risk-off rotation on the prior report.

And then again on this report a strong risk-off rotation.

bearish

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

Concentrated Money Flows:

Money flows skewed heavily to the sell side for a second consecutive week.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Fed up

For the first time I am seeing genuine anger from investors. They are angry with the Fed for their hawkish reaction to inflation while simultaneously angry about home and food prices.

I don’t think most investors, especially those who focus primarily on equities and/or bonds, fully grasp the situation facing the U.S. dollar. Our fiat currency, along with the nation it represents were called into question during the lockdown. What rose to prominence during this time were various crypto currencies. These internet coins have become legitimate tender.

Ether has become a massive commodity that users accumulate and use.

These so called inflation hedges did not behave as intended. They did not hedge anything. In reality they served to *exacerbate* inflation.  And now the Fed has no choice but to flex until the almighty U.S. dollar regains total, undisputed dominance.

It’s working.

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:

Expecting sellers to attempt some follow through downward action early in the week. Then a rally into month-end.

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]:

Transports resolve weak low

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

We can finally remove the note about the weak low on Transports. That being resolved, perhaps this index can go to work forming a more sturdy low.

This could be range low right around here—we don’t know.

See below:

Semiconductors appear to be outside of range. Could be in discovery down. Or the range could assert force and suck price higher. We don’t know.

Ether looks more balanced than the other two contextual indices.

V.INDEX MODEL

Bias model is neutral heading into the final week of September. The second consecutive neutral reading. No bias.

There were five Bunker Busters in recent history — three weeks ago, twelve weeks back, nineteen weeks ago, thirty-two reports back and a third fourty reports back.

Here is the current spread:

VI. 12 month hybrid oversold

On Friday, September 23rd Stocklabs went hybrid oversold on the 12 month algo. This is a bullish cycle that runs through October 7th, end of day.

VII. QUOTE OF THE WEEK:

“it has always been easy to hate and destroy. To build an to cherish is much more difficult.” – Queen Elizabeth II

Trade simple, stay cool daddy-o

Comments »

Steady hustling

Not too much for bulls to hang their hat upon heading into the second-to-last week of September. I’ve learned over the years to know when I am emotionally unfit for trading. Overconfidence has plagued me over the years. It has never been fear that weakens me but the feeling of invincibility. So I haven’t traded this year.

I made so much hecking money in that bull run, I started doing crazy things. It was time to back off.

I’ve kept busy in other ways. Working the land. Disco dancing. Helping me elders transition into more suitable housing.

I can see the light at the end of this transitionary tunnel and very much look forward to becoming more active again in the financial markets.

In the meantime, life just really seems to be working out splendidly for your dear and humble pen pal Raul. Like, hows a corn meme gonna go viral a few weeks before I pull down my biggest sweet corn crop ever? I was slanging ears of corn on the streets with ease.

This morning, I woke up cockstrong and went to help pour a cement driveway, no problem, then back to these decks to put out the weekly research.

Next I have to go assemble a bedroom vanity for a nice sounding old lady. With any luck, she’ll tip me with some pie.

We dunno.

We just takes it as it comes.

Winter is coming. There is ultraviolence all around me. Not only in the city but the suburbs. That no dang good lock down really set children and adults alike back socially, empathetically.

They go onto the internet and find these little hate chambers full of groomer dootch bags that encourage bulling and for what? Because they’re little bitches afraid of being bullied themselves.

Again, totally fine. Not everyone can be high born with immigrant/american hybrid genetics and a mind that understands the way of things. Alls your very humble and kind and handsome pal Raul can do is demonstrate greatness, day-after-day-after-mother-hecking-day, wearning tie dyed shirts and helping the olds and swooning the babes and hustling punkins and corns.

That’s it.

The gambling halls down in chicago are putting 82% odds on a 75 basis point rate hike this Wednesday. The Federal Reserve is completely out of control. Ever since they kicked Yellen out of the chair it has been a chaotic organization that has failed the people. How much longer will this perverse and draconian obsession with inflation continue?

We dunno.

But we do know that the third reaction to that dang meeting Wednesday is all that matters to the focused speculator.

Maybe the crash is near. Maybe a gut twisting rally lurks in the shadows. These are spooky times.

I’m glad I’m just poking the dirt and making punkins pop out of it.

Okay for now.

Raul Santos, September 18th 2022

And now the 401st Strategy Session.


Stocklabs Strategy Session: 09/19/22 – 09/23/22

I.Executive Summary

Raul’s bias score 2.40, medium bear. Choppy and indecisive price action through Wednesday morning. Then look for third reaction to the FOMC rate decision to dictate direction into the second half of the week.

II. RECAP OF THE ACTION

Markets were higher to start the week after buyers spent the Sunday evening Globex session working futures higher. The rally continued through Monday and into early Tuesday before hotter-than-expected CPI data sent prices careening lower. The selling continued through Tuesday. Then price chopped through Wednesday before continuing lower Thursday. Friday was choppy also before ramping a bit higher into the weekend.

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

Rotational Report:

Recall we had two weeks of full risk off rotations, then a strong risk on rotation. Last week another full-on risk off rotation away from equities.

bearish

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

Concentrated Money Flows:

Money flows skewed heavily to the sell side.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

All eyes on the Fed

Model is neutral heading into next week. Stocklabs is in a six month hybrid overbought cycle. While that stats on this signal are bullish over the 10-day cycle historically, it has been behaving well lately as a short signal.

CPI coming out hot last week really put the fear in investors and the selling was instantaneous. Then, later in the week FedEx put out a warning about the economy and together these major headwinds have not been kind to bulls.

One has to wonder if all this bad news is priced in a this point. The CME is placing 82% odds for a 75 basis point hike from the Fed this upcoming Wednesday. It will be interesting to see whether they raise this aggressively as most investors expect.

However, the actual hike is of less importance to us than the reaction.

That said, I expect markets to pause and chop until we hear from the Fed.

I am also interested in Costco earnings due out Tuesday after the bell. They could provide an interesting bit of context heading into the Fed meeting.

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:

Choppy and indecicive price action through Wednesday morning. Then look for third reaction to the FOMC rate decision to dictate direction into the second half of the week.

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]:

Balance breaking on Transports

Readers are encouraged to apply these techniques to all markets. 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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index, PHLX Semiconductor Index and ethereum

Leaving this note up until something changes: That weak low on Transports irks me. We’ve rallied far from it, that we’re likely to encounter support ahead of any retest of the lows, but it poses a risk to a sustainable low.

Transports lost the lower bracket of the balance we’ve been monitoring. The FedEx warning pressed into this index. That weak low is definitely in play.

See below:

Semiconductors seem to have trapped some buyers a bit higher, and while still in range, bulls are on their heels.

Ether looks a bit more balanced than our other two contextual indices.

V. INDEX MODEL

Bias model is neutral heading into the second-to-last week of September. No bias.

There were five Bunker Busters in recent history — two weeks ago, eleven weeks back, eightteen weeks ago, thirty-one reports back and a third thirty-nine reports back.

Here is the current spread:

VI.QUOTE OF THE WEEK:

“Let me assert my firm belief that the only thing we have to fear is fear itself—nameless, unreasoning, unjustified terror which paralyzez needed efforts to convert retreat into advance.” – Franklin Delano Roosevelt

Trade simple, stay cool

 

Comments »