iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,464 Blog Posts

Drifting, NASDAQ higher, here is the Tuesday trading plan

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight, trading up near the gap left behind on 07/25.  As we approach cash open prices are balancing out up beyond Monday’s high.

On the economic calendar today we have a 4-week T-bill auction at 10am, a 3-year Note auction at 1pm, and consumer credit at 3pm.

Yesterday we printed a double distribution trend up.  The day began flat then with a buying drive off the open.  Price continued higher in the late morning after a brief two way auction above the daily midpoint.  The day ended with the market continuing to explore higher prices.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7444.  From here we continue lower, down through overnight low 7437.  Look for buyers down at 7436 and two way trade to ensue.

Hypo 2 buyers reject a move back into Monday’s high 7448.25 setting up a move to take out overnight high 7474.50.  Look for sellers up at 7495.50 and two way trade to ensue.

Hypo 3 stronger buyers trade us up to 7505.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NADSAQ starts the week off flat, here is the Monday trading plan

NASDAQ futures are coming into Monday with a slight gap down after an overnight session featuring normal range and volume.  Price worked sideways overnight, marking time.  After spending most of the evening trading above last Friday’s high, price has settled back into the Friday range as we approach cash open.

Last week also began flat, then with sellers driving prices lower off the open.  The downward action discovered a strong responsive bid by Monday afternoon.  The Monday responsive buy would ultimately market the low of the week.  We were gap up into Tuesday and another attempt lower was met with strong responsive buying.  Wednesday marked time, even through the FOMC decision.  Thursday was a dynamic trend up. Friday slightly extended the gains and marked time.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a normal day.  The first hour of trade was wide enough to contain the rest of the trading session.  This is an uncommon occurrence and speaks of a lack of higher time frame participants.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7402.25.  From here we continue higher, up through overnight high 7424.25.  Look for sellers up at 7425 and two way trade to ensue.

Hypo 2 sellers press down to 7379.25 before two way trade ensues.

Hypo 3 stronger buyers press to 7456.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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IndexModel signals bullish into first full week of August

It feels like the financial markets will be on autopilot these next five days.  All the big NASDAQ movers already reported earnings.  The most debated business concept of the last 50 years (praise!) passed their Wall Street pressure test.  And now IndexModel, which I prepare as part of the Exodus Strategy Session is flagging bullish.

The model isn’t calling for a major rally.  Just a calm, sideways drift.  Perhaps with a slight upward bias.

Is that useful?  Can you make money off that call?

I don’t know.

This is research for a style and approach that works for me.  A trading edge broadcast live on an obscure finance blog by an Italian with a Mexican pen name.  I just happen to be alumni from a time when legendary traders blogged.  I stuck around when they all started hiding in private chat rooms.  I’m a ghost from back when trading seven figures on 3x leveraged ETFs was a thing.

Who remembers The Devil?

Now I’m solely responsible for showing traders how to stand on the front lines when institutions are throwing around big bands.  So when I write about the game it matters more.  All the roll models are gone.  Don’t make me talk about prolific advisors.

Anyways the model is bullish.  I’ll be looking to buy overnight down gaps when we are trading inside the prior day’s range.  Also I’ll buy when the algos I coded into MultiCharts fire out signals.  I’ll put size on as soon as possible then go to work scaling pieces off, methodically, to lower my cost basis.  I’ll be watching support levels, for bidders, and joining them.  Even if only for a scalp.

I won’t be pressing long positions as aggressively as I did last week.  Without a catalyst, and with the IndexModel expecting drift, I plan to capture 6 points here, 12 points there, and so on. 15 points, book it.

Anyhow I’m rambling.  Models are bullish. Exodus members; the 194th Strategy Session is live.  Make sure you check out the research on the NASDAQ Transportation index.

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Non-farm payroll data strong, America, strong, here is the Friday NASDAQ trading plan

NASDAQ futures are coming into Friday with a slight gap up after an overnight session featuring normal range and elevated volume.  Price took out the Thursday high overnight, further pushing into last Friday’s range before sellers stepped in and balance ensued.  As we approach cash open price is hovering just above the Thursday high.  At 8:30am non-farm payroll data came out better-than-expected.

Also on the economic agenda today we have non-manufacturing/services composite data at 10am.

Yesterday we printed a trend up.  The day began gap down and buyers drove higher right off the open.  Then they took out the Wednesday high.  Then they reclaimed most of the losses seen late last week.  Price was trend up nearly all day, eventually coming into mini balance along 7375.

Heading into today my primary expectation is for buyers to work up through overnight high 7415 to tag 7425.75 before two way trade ensues.

Hypo 2 stronger buyers trade up to 7457 before two way trade ensues.

Hypo 3 sellers press down through overnight low 7379.25 to tag 7362.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Extreme overnight action sees NASDAQ back down in Tuesday’s range

NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume.  Price mostly worked lower overnight after being in balance until about midnight New York.  At 8:30am initial/continuing jobless claims data came out better than expected.

Also on the economic agenda today we have factory and durable goods orders at 10am.

Yesterday we printed a normal variation down.  The day began gap up and after sellers closed the gap we spent the first hour of the session auctioning higher.  Sellers stepped in before 10:30am, right around where they drove lower from Monday, and high-of-day was set.  Price chopped near session low up until the FOMC rate decision.

After the Fed left their benchmark borrowing rate unchanged we saw little reaction but ultimately buyers stepped in late in the session and slowly moved price higher before we fell back to the midpoint by end-of-day.

Heading into today my primary expectation is for buyers to work into the overnight inventory and tag Wednesday low 7241.  Sellers reject a move back into the Wednesday range setting up a move to take out overnight low 7214.25.  Look for buyers down at 7200 and two way trade to ensue.

Hypo 2 gap-and-go lower, trade down through 7200 and sustain trade below it setting up a move to target 7134.25 before two way trade ensues.

Hypo 3 buyers reclaim Wednesday low 7241 and sustain trade above it setting up a gap fill up to 7272.50.  Buyers continue higher, up through overnight high 7293.25.  Look for sellers up at 7300 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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Tim Cook delivers, Jerome Powell on deck [yawn], then ELON’s up to bat

Tim Cook lead his team to victory in Q3.  The world’s most valuable tech company delivered top and bottom line beats, BEATS:

Apple Q3 EPS $2.34 Beats $2.18 Estimate 
Apple Q3 Sales $53.27B Beat $52.34B Estimate

Fifty two, billion dollars.

Next up we have Jerome Powell and his archaic Federal Reserve.  They’ll play pretend with the benchmark borrowing rate, leaving it unchanged, whilst drinking iced milk squeezed directly from a mammal’s teat [papilla mammae].

The federal reserve almost always delivers a burst of action worth trading. Therefore I shall be dialed into the tape at 2pm New York, looking to take NASDAQs away from institutional algorithms.

Then good people, we shall from Our Dear Leader.

Tesla reports earnings Wednesday after-market-close.  Elon Musk (Praise and Glory to The Leader) is up against 150 years of brainwashing.  Mankind’s Last Hope has to overcome haters from both sides of society, the communistic socialists and the paranoid capitalists.  He is a pinwheel of energetic hope in an endless sea of Tyson slaughterhouses.

They don’t want change.  They want war and destruction.  Ask me how I know?

Several of the stocks chosen by my quant are from the military industrial complex.  It blows my mind how intuitive the Exodus algorithms are.  Those positions are crushing.  Our very transient political powers want battle and chaos.  They want commodities like oil to seem important.  They don’t want sun powered cars or a thriving rural middle class.

Well fuck them.  Elon shall succeed.

Soon semi trucks will barrel down the interstates in serpent-like formation, fueled up on sun energy, autonomously, capturing the collective energy saving of a caravan draft.  Roofs across the world will be equipped with solar tiles that power entire homes, offices, and their transportation.  Cats and dogs will live together in harmony.

Resistance is futile.  But amusing.  You cannot create a law against that which is ubiquitous.  Try as they may.   Fat faced men like Devon Nunes.

In other news, is Apple going buy Twitter?  What’s up with this #OneTeam hashtag and the vague Venn diagram @jack tweeted this afternoon?

That little heart emoji certainly is reminiscent of the early Apple emblem.

Congratulations again Tim Cook.  You’re are good CEO old sport you made papa lots of money today.

 

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How I will [likely] remain long the futures into Tim Cook’s earnings

Guys I cannot keep updating my thoughts throughout the day and trade to the best of my ability.  Some of you are asking and while I appreciate that you find value in my writing I write what I write so that you can understand and implement the process on your own terms.

Here is a quick recap of how I’ve found myself long two units heading into the closing bell and Apple earnings.

This morning’s hypo 2 did a good job of identifying where sellers were likely to show up should the market’s first matter of business be to test higher:

Hypo 2 buyers gap-and-go higher, trading up through overnight high 7230.  Look for sellers to defend around last Friday’s low 7263.50 and two way trade to ensue.

Hypo 2 was off a bit off.  While I attempt to make these price levels as precise as possible, this is nature and nature will do natural things.  The NASDAQ is a slippery instrument, it sloshed past 7263.50 but peaked out a touch higher at 7271.25.

I tweeted:

So I thought we’d already seen all the upside for today but then something happened.  We made a sharp low before 10:30am.  Why does that matter?  There is a 72.6% probability that either the high OR low of the NASDAQs initial balance [first hour’s range] is exceeded before end-of-day.

Then there is [was] that rare b-shaped profile we are [were] working inside of [we still kind of are but it’s filled in].  It looked even more b-shaped this morning, remember?

“As the profile begins to mature, it is taking on a lowercase letter b shape which is sometimes indicative of a long liquidation, a short term phenomenon that sometimes occurs near the bottom of a down move.”

My muscle memories:

Market profile context said we could be nearing a bottom.  The ATR bracket from Exodus Strategy Session was tagged by /es_f Monday and we formed a good looking bottom.  And Apple reports earnings after the bell.

We all know Apple reports earnings after the bell…how is the market going to behave after the report?

We don’t know.

But Apple earnings are a wildcard.  That much is fact.  And

I had the 72.6% stat.  Mothership signaled I could go long so I went long and targeted IB high.  By noon we took out IB high, I left one contract on and went to the gym.

This next part is absurd but I managed the runner from the gym using the logical 7250 level as my stop on the final unit.

But why?

Per the morning homework I though we’d already seen as much upside as the day had to offer before Apple earnings.  And now we had gone range extension up, so that stat was complete too.  There’s no real reason I should still be long.  Looking at /ES $IBB and /YM I can see that if we take out 7250 those instruments have a long way to fall before any logical support.

But there is a wildcard.  And a nice, bi-centennial price level that every trading desk around the world is watching.  7250.

When I returned home to Mothership from the gym we were churrning the 7250 level and I managed to size my position back on and scalp it back off.

Though scaling off from the initial position, then adding and scaling again, I’ve significantly reduced my cost basis on my /nq_f long.  So, while I have a stop in place, I’m going [hopefully] let a piece ride into the wildcard.

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NASDAQ calm overnight, here is the Tuesday morning trading plan

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring normal range on elevated volume. Price worked higher overnight during a balanced session that traded inside Monday’s range.  As we approach cash open prices are hovering below the Monday mid-point. At 8:30am PCE core data came out below expectations.

Also on the economic calendar today we have consumer confidence at 10am and a 4-week T-bill auction at 11:30am.  However the real event happens after the bell when Apple reports earnings.  We may go into a holding pattern at some point today in anticipation of the big tech name’s earnings.

Yesterday the NASDAQ printed a normal variation down.  The day began with a hard drive lower which briefly paused before continuing to make a few more lows throughout the morning before a responsive bid stepped in about 1/4th of the way down into the 07/06 conviction buy range.

As the profile begins to mature, it is taking on a lowercase letter b shape which is sometimes indicative of a long liquidation, a short term phenomenon that sometimes occurs near the bottom of a down move.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 7200.  From here we continue lower, down through overnight low 7191.  Look for buyers just below overnight low and two-way trade to ensue.

Hypo 2 buyers gap-and-go higher, trading up through overnight high 7230.  Look for sellers to defend around last Friday’s low 7263.50 and two way trade to ensue.

Hypo 3 stronger sellers close overnight gap 7200 take out overnight low 7191 and continue lower, down to 7134.50 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ flat heading into last Monday in July

NASDAQ futures are unchanged to start the week after an overnight session featuring elevated range and volume.  Price briefly traded below last Friday’s cash low before coming into balance.

On the economic calendar today we have pending home sales at 10am and a 3- and 6-month T-bill auction at 11:30am.

Last week began with markets working higher across the board then selling throughout the second half of the week which was to an extent attributed to post-earnings weakness in Facebook.  The Dow Jones was resilient to late-week selling while the Russell showed subtle signs of topping.  The last week performance of each major index is shown below:

Last Friday the NASDAQ printed a double distribution trend down.  The day began gap up and sellers quickly faded the overnight move lower.  The selling then continued all morning and accelerated into the afternoon.  Price traded down into the 07/11 range before establishing a late-day balance.  Had it not established balance it would be considered a full-on trend day.

But I suppose a more accurate description would be a single-distribution trend day, slightly more bearish than a double.

Heading into today my primary expectation is for sellers to work down towards overnight low 7251.  Look for buyers down at 7248.25 and two way trade to ensue.

Hypo 2 stronger sellers trade down to the open gap at 7232 before two way trade ensues.

Hypo 3 buyers work up to 7337.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Ready now and the timing is right

It took longer than normal to update all research needed to be ready to engage the futures but not as long as I expected.  After the french press kicked in and, all the muscle memory came back and, the model was in front of me well, the my old friend the flow came back.  I split the morning between devising a weekly trading plan and watering the yard’s spring shrub transplants.  Mature shrubs are a joy millennials might not appreciate yet but, by the time they do I’ll have a house they’d like to buy but, they better be ready to put that premium up.

Looks like I didn’t miss much skipping out on July trading.  That’s usually the case.  Chop and noise.  All the big players out enjoying life.  Put the ambitious youths in charge.  Work them until they break.  Promote the survivors replace the weak.  This is summer in America.

But I’m back in time for the action to pick up.  How do I know?  I’m a bit of a futurist.  Sometimes I gaze deeply into the abyss and see slow revolutions taking shape.  Disciples preaching monotheistic faith after Pontious Pilate sealed Yeshua’s fate.  But there’s not much I can do to prepare for a historic shift beyond a few broad brush strokes.  Tesla. Twitter. Crypto.  But these next five days, these next five days…

They’re less hazy.  I have the right equipment to bring them into focus.  Not perfectly but pretty good.  Then as each day comes closer I’ll be ready for small precise on the fly movements.  Hopefully my old friend the flow shows up again.  I can see some lines. Those lines could be the right place to stand and wait for natural forces to bring me my shot; I can see me nailing the shot.

Sometimes my position is run over.  Then I have to focus on damage control.  That’s where muscle memory kicks in.

What size renko bar am I using?  How many NASDAQ points did I risk?  How many units are in place right now?  What’s this trade’s cost basis?  When will I know the trade is wrong?  If that’s the case, then should I take action right now?  Should I size back in?  Or eat the loss?  What is the market trying to do?

And so on.

There are huge market moving events scheduled for the upcoming week.  Something, maybe the sudden quantity of black flies around my house or the way Mars is dancing with the buck moon, tells me everyone will be greeted with a fresh geopolitical distraction.  But these information snippets below are the real things you need to be aware of.

Apple reports earnings after market close Tuesday.  They can move the entire market.  Look, this is all you need to see to believe me, a viral tweet from superstar investor and titan of finance Michael Batnick:

Wednesday is the first of the month AND the Federal Reserve has an announcement scheduled for the afternoon.  This announcement will come after what is not considered a live meeting.  There is no post-announcement press conference scheduled, which means Jerome Powell is probably in Nantucket somewhere enjoying a glass of iced milk with his fellow private equity thugs.

Nevertheless, Fed announcements almost always send a tradeable burst of energy through the market.  Be on the lookout for one around 2pm Wednesday.  I am of course referring to New York time.

The gambling halls in Chicago are currently placing 97.5% odds The Fed will leave their benchmark borrowing rate unchanged:

I’ll be watching for the third move after the FOMC meeting to dictate direction into the second half of the week.  But there’s a wildcard.

Nonfarm payroll data is due out Friday morning, premarket.  My primary expectation is for this data to exacerbate whatever move is happening head into the number.  Meaning, if we are selling into it, we accelerate to the downside.  If buying, the rally jolts higher with vigor.  If chop, more chop.  And so on.

Turning our attention to the indices (after all, they don’t call me @IndexModel for nothing) the Russell is showing subtle topping signs.  There was much stock market optimism during Q2 and it carried into Q3.  But Q3 grows old.  The Russell may be whispering caution.  It’s up against a resilient Dow Jones however.  And as for the index model itself, which codifies the major indicies and is prepared as part of the Exodus Strategy Session, it’s:

Neutral. I repeat, the model is neutral.

The Exodus mother algo is also neutral.  The most recent cycle  began Friday, July 6th at market close and spanned through to Friday, July 20th end-of-day.

There hasn’t been a 3rd sigma TICK generated on the NYSE all summer.  If you’re new here, I have access to super high quality raw data directly from the New York Stock exchange.  I receive it from IQFeed.  They have two NYSE ticks.  They made a dumbed down one because peanut-brained people wanted a NYSE TICK that pinged +/-1000 more often.  So IQ Fed made them one.  But they kept the real one.  I use the real one.  The right one.  Anyhow we have no signal coming out from the internals.  Shout out Trent for the hook up that discount code for IQFeed.

Top-down analysis shows broad strength across most sectors but weak Tech.  Weak tech kind of matters more than broad market strength because technology now represents about 25% of all stock market capitalization.  I can see this very clearly on the Dashboard inside Exodus:

See how this isn’t rocket science?  We leave rocket science to Our Dear Leader and his team of SpaceX scientists and engineers.  Moving on…

Weak tech kind of matter more than broad market strength which makes it kind of sweet that NAS-100 futures are my most understood instrument.  I will be reporting every morning which price levels matter because it’s part of my morning homework, which I freely publish because I know that even if I lead a horse directly do my favorite watering hole, they likely won’t take a drink.  And even if they do, nature replenishes these capitalist fountains quite well.  We could all have a drink.

I cannot emphasize enough that Apple can swing this entire market.  Our life is in Tim Cook’s very gay hands.  How’s that make you feel big tough guy?

And I’m ready to trade the way Tim Cook’s Apple earnings are received.

Sunday research is complete.  Exodus subs, the 191st (should be the 193rd but I slept on my research duties) edition of Strategy Session is live, go check it out.  If you think it would be a convenient feature to have the Sunday Strategy Session automatically sent to your email inbox, please let me know in the comments below.

With research complete I feel ready for the week.  Once I write my morning plan, I’ll feel ready to trade Monday’s open.  After I prepare Tuesday’s plan, trade Tuesdays. Wednesday, Wednesday’s.  But maybe Monday I’ll just sit back for the first few hours and let the big dogs slug it out.  If it seems like we’re way out of balance.  If that’s the case then I’ll wait.  Then after the dust settles I’ll fox scuttle in and start picking up scraps.

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