Fri Feb 1, 2019 8:52am ESTComments Off on Victory lap: America strong, payrolls strong, NASDAQ…STRONG
NASDAQ futures are coming into Friday with a slight gap down after an overnight session featuring extreme range and volume. Price worked lower overnight, slowly, trading below the Thursday midpoint before discovering a bid. As we approach cash open, price is hovering back above the Thursday mid. At 8:30am Nonfarm payroll data came out much better than any forecast expected.
Also on the economic calendar today we have ISM manufacturing, construction spending, and the final January reading of sentiment from the University of Michigan.
The only major tech company still due to report earnings is Google parent Alphabet. They are set to report earnings Monday, February 4th after market close.
On Thursday the NASDAQ printed a normal variation up. The day began with a gap up and drive higher. Price stalled out just beyond the weekly ATR band (6923.75) and just before the old composite VPOC 6950. We then retraced back to the midpoint before rallying into the bell.
Heading into today my primary expectation is for sellers to gap-and-go lower, trading down through overnight low 6862.25. Look for buyers down at 6854.50 and two way trade to ensue.
Hypo 2 buyers work into the overnight inventory to close the gap up to 6917.50 then continue higher, up through overnight high 6934 before being magnetized to the old composite VPOC at 6950. Look for sellers up at 6963.50 and two way trade to ensue.
Hypo 3 stronger sellers work a Wednesday gap fill down to 6836.50. Look for buyers down at 6819.75 and two way trade to ensue.
Some of you know that I commit the majority of February to living life out on the fringe of society—taking most of my food cold and sleeping out in nature—my only goal being to find the softest and deepest snow powder on the steepest and deepest mountains in North America. This year I am starting out just a few clicks south of the Canadian border up at Mount Baker and then working north from there, likely spending time in Banff and Revelstoke and places like that where western civilization hasn’t made the living luxurious and lazy. It’s nice have a core purpose, if only for one month, beyond fighting like a ravenous dog for scraps of green paper.
But while I am gone, I want it to be perfectly clear where my investments lie and how I expect the economy to behave while I am away. There is no bear market. There never was a bear market. Anyone who tells/told you we are in a bear market is a god damned fucking lair and not to be trusted.
That’s nasty language. When I was sitting in the dentist’s chair just now, having my teeth picked clean like a shark between meals, altering my mental state with a blend of oxygen and nitrous oxide, I realized two things. The first is people tend to believe that people never change. For the most part that’s true. The next thing I realized is the language we use matters. How we choose to address something beyond our control, like the behavior of others, matters because it is quite possible that it could change the way someone else’s mind reacts to an external stimuli. So I shouldn’t use such nasty language.
Anyone who tells/told you we are in a bear market may be a victim of group think, taking too many cues from the media outlets and wall street analysts. In general, these are not happy people. Additionally, the amount of little green pieces of paper they earn is highly contingent on them keeping your attention, and I’m not sure if you’ve ever noticed, but humans can’t help but gawk at disasters. It’s a real sick society. Are you feeling me?
I spend too much time delving into topics like these which is why you never see any of the other fin-twit [people of finance who use twitter and run in a tight clique] share my work. Even if they read it, they wouldn’t possibly promote it. It doesn’t fit in a nice safe package for their podcast radio shows. So I blog alongside the other misfits, here on our bloody lovely island IBANKCOIN.
IBC is a place where people gather for the explicit intent of extracting money from the global financial complex. Said money can then be converted into little green pieces of paper that can be traded for any number of things. I suggest trading your moneys for farmable land as far north and at as high an altitude as your constitution will allow. This land will preserve you and your next two generations despite the fact that people never change and humans are rapidly destroying our planet. You will have a land buffer between you and the massive herds of people migrating away from the equator in desperate search of drinking water. You and your plants will have clean air to breathe. Does anything else really matter?
In my opinion, which you may be realizing is clear is logical, there is a simple way to extract money from the financial markets right now. We are entering a period of economic prosperity the likes of which no living human has ever seen. A rewind of the roaring ’20s, complete with gilded ceilings and decadent wealth. The gap between the haves and have nots will inevitably widen even if the AOC’s of the world manage to turn us into a socialist state. Because policy cannot stop the forces that have been created by the internet and semiconductors. We are in a new paradigm folks. You either try to resist it and perish, or you go with the flow and enjoy your brief mortal existence—a wisp of spirit inside a sack of mammal bits.
The simplest way to align yourself with the oncoming explosion of wealth creation is to buy-and-hold the best names in tech: TSLA, MSFT, GOOGL, FB, MTCH, ADBE, CRM, AMZN. A more dedicated way is to create a rule-based method of short term trading. Don’t flutter between instruments like some capricious dope. Pick one instrument and form an intimate, visceral understanding of its behavior. Then come to the market every.single.day and trade that instrument. Review your trades. Score your trades on whether or not you followed your rule-based method. Do this again and again for years until you have a consistent means of extracting money.
Intermediate term my main expectation is for the PHLX semiconductor index to check back to its October breakdown. Then I expect some push back from the sellers before we go up and explore the other side of that gigantic consolidation aka a continuation of the long-term trend higher. In essence, a much larger and slower version of the overplay for the underlay. I link back to my old blogs because people never change and that means you might be reading my blog for the first time. I do my best to bring you all up to speed. I refuse to apologize for redundancy. If it wasn’t important I wouldn’t be writing about it. Anyways look, here’s the above paragraph in chart form:
I want you all to know that I appreciate you taking time out of your day to stop by and read my thoughts. The life of a speculator is somewhat isolated, and it helps to share my predictions and solicit your feedback, even if you think I am wrong. Your comments likely won’t change my mind, but perhaps you can offer some insight that will result in me forking off my current path in a curious way that slowly leads to something new. I do think the works of a community can be greater than that of the individual, especially if there is a cohesive flow of thoughts and energy between the members of a group.
I like this island of misfits, even if you fuckers don’t like me. Thanks for stopping by.
Thu Jan 31, 2019 9:07am ESTComments Off on We wait for Amazon then January is over, here is the Thursday NASDAQ trading plan
NASDAQ futures are coming into Thursday with a slight gap up after an overnight session featuring elevated range on extreme volume. Price worked higher overnight, trading up into price levels unseen since December 4th before setting into balance. Recall that December 4th was a conviction selling day, with the market liquidating lower for most of the session. However, of interest on that day, the VPOC never shifted out of it’s upper quadrant. The naked VPOC remains up at 7029.50. At 8:30am initial/continuing jobless claims data came out worse than expected.
Also on the economic calendar today we have a 4- and 8-week T-bill auction at 9am.
Investors are also likely to start looking ahead to the closing bell today as we await earnings from Amazon.
Yesterday we printed a double distribution trend up. The day began with a gap up and choppy two-way action. By late morning, the NASDAQ had gone range extension up and was flagging at the higher prices heading into the FOMC rate decision. The Feds left their benchmark borrowing rate unchanged and third reaction analysis yielded a buy signal. We rallied into the close, ending the day near session high.
Double distribution trend up.
After the close, we heard earnings from Facebook, Microsoft, and Tesla. Microsoft’s were a slight miss, the others were satisfactory.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6836.50. From here we continue lower, down through overnight low 6830. Look for buyers down at 6819.75 and two way trade to ensue.
Hypo 2 buyers gap-and-go higher, trading up through overnight high 6881.50. Look for sellers up at 6892 and two way trade to ensue.
Hypo 3 stronger buyers tag 6900 and sustain trade above it, setting up a move to target 6923.75 before two way trade ensues.
NASDAQ futures are coming into Wednesday gap up after an overnight session featuring extreme volume on extreme range. Price worked higher overnight, gradually auctioning higher for most of the globex session but staying contained inside the Tuesday range. As we approach cash open, price is hovering above the Tuesday midpoint. At 8:15am ADP employment data came out better-than-expected.
Also on the economic calendar today we have crude oil inventories at 10:30am, FOMC rate decision at 2pm, and a Jay Powell press conference at 2:30pm.
After the bell we’ll hear earnings from Microsoft, Facebook, PayPal, and Tesla. These are all NASDAQ movers.
Yesterday we printed a normal variation down. The day began with a small gap up that sellers quickly resolved by driving lower off the open. Said sellers continued lower, trading down into last Wednesday’s range before settling into balance.
Heading into today my primary expectation is for buyers to gap-and-go higher, trading up to 6769.50 before two way trade ensues. Then look for the third reaction after the FOMC rate decision to dictate direction into the second half of day.
Hypo 2 sellers work into the overnight inventory and close the gap down to 6641.50 then continue lower, down through overnight low 6625.50. Look for buyers down at 6600 and two way trade to ensue. Then look for the third reaction after the FOMC rate decision to dictate direction into the second half of day.
Hypo 3 stronger buyers trade up to close the gap at 6789.75 then continue up to 6800 before two way trade ensues. Then look for the third reaction after the FOMC rate decision to dictate direction into the second half of day.
Tue Jan 29, 2019 8:45am ESTComments Off on NASDAQ with a little gap up into Tuesday, Apple earnings on deck, here is the morning trading plan
NASDAQ futures are coming into Tuesday gap up after an overnight session featuring elevated range on extreme volume. Price was balanced overnight, spending much of the session inside of Monday’s range. Then, as we approach cash open, price sprung up beyond Monday range and is hovering above it.
On the economic calendar today we have a 52-week and 2-year note auction at 11:30am followed by a 7-year note auction. We also have Apple earnings after market close.
Yesterday we printed a neutral extreme up. The day began with a gap down and small move lower, trading just below last Thursday’s low before a responsive bid stepped in. Sellers made a move to range extension down ahead of lunchtime, but there wasn’t much interest in exploring lower. Instead we began a slow ascent higher, eventually pushing neutral, and we closed near session high.
Heading into today my primary expectation is for buyers to gap-and-go higher, sustaining trade above 6725 to set up a move to target 6769.50 before two way trade ensues.
Hypo 2 stronger buyers work the weekly gap fill up to 6789.75. Look for sellers up at 6800 and two way trade to ensue.
Hypo 3 sellers work into the overnight inventory and close the gap down to 6702. From here we continue lower, down through overnight low 6661. Look for price to stabilize along 6666 as we wait for Apple earnings.
Mon Jan 28, 2019 10:21am ESTComments Off on Ignore $CAT
Your first distraction was served up just before market open—Caterpillar earnings didn’t live up to analyst expectations and the algos spiked the indices lower on the announcement. The company is still making [literally] billions of dollars. Here are the facts so you can read them and then shelf them as noise:
Caterpillar (NYSE:CAT) reported quarterly earnings of $2.55 per share which missed the analyst consensus estimate of $2.99 by 14.72 percent. This is a 18.06 percent increase over earnings of $2.16 per share from the same period last year. The company reported quarterly sales of $14.3 billion which missed the analyst consensus estimate of $14.33 billion by 0.21 percent. This is a 10.89 percent increase over sales of $12.896 billion the same period last year.
You know what to watch, the PHLX semiconductor index. It is already recovering intra-day. For more insight turn your attention to NASDAQ 100 market profile. It is catching a bid at logical support:
I’m not going to remind you all week what matters. I share my morning report, that’s it. The rest was written Sunday. The industry is designed to confuse you so you forfeit control of your wealth to some daft but handsome fund manager. Or you can tune out the bullshit, the Howard Schultz running for president angst, and focus on the SOX.X.
Mon Jan 28, 2019 8:53am ESTComments Off on Last Friday’s intra-day progress erased, here is the Monday trading plan
NASDAQ futures are coming into the final week of January gap down after an overnight session featuring elevated range on extreme volume. Price worked lower overnight, erasing all the intra-day upside progress seen last Friday but sustaining trade inside the final day’s range. As we approach cash open, price is hovering near last Friday’s low.
The U.S. government has been funded for three weeks.
On the economic calendar today we have a 6-month bill and 2-year note auction at 11:30am followed by a 3-month bill and 5-year note auction at 1pm. The big tech earnings don’t start until after-market-close Tuesday (Apple).
Last week started off with weakness Tuesday after a market holiday Monday (MLK). Wednesday had early strength that was faded lower. Thursday marked time before we went gap up Friday and rallied to close at high of week and essentially unchanged for the week. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a normal variation up. The day began with a gap up and two way auction. This eventually gave way to buying which drove price up into the prior Friday’s range before coming into balance.
Heading into today my primary expectation is for sellers to gap-and-go lower, trading down to 6700 before two way trade ensues.
Hypo 2 buyers work into the overnight inventory and close the gap up to 6789.75 then continue higher, up through overnight high 6797.50. Look for sellers up at 6800 and two way trade to ensue.
Hypo 3 stronger buyers trade us up to 6822.50 before two way trade ensues.
One of the things I like to demonstrate from my tiny, generally overlooked blog is how we can interpret the world around us in a meaningful way and then understand what to expect during the upcoming trading week. Think of these Sunday entries like a five day weather forecast. Like a meteorologist, I interpret mathematical models and layer in current events to create an objective outlook.
Is it always right? Goodness, no. How boring would that be?
All it is is a consistent way of approaching a task that can seem confusing and for most, downright impossible—to trade for a living without losing all you fucking money.
I chose my foundation stones wisely. I observed my elders, the greats willing to share their hard earned lessons. I emulated them for years, then I lopped off parts that didn’t suit my style, built tools that did fit my approach, and came to the markets every week with a real effort to be better.
But enough self-aggrandizing. I am nothing, nobody. I matter very little. Even though I’ve navigated these last six weeks with near perfection, the market can stop making sense in an instant.
Next week the stock market snaps back into action.
You need to be ready to hear key information from the real leaders of the known world. We have earnings coming out of Apple, Microsoft, Facebook, Amazon, and the sweetest boy—Tesla. These earnings and the reactions to them are far more important than the national crisis at our southern border, the rioting french, Roger Stone, or any other geopolitical bullshit. These are our immortal rulers and they will determine the fate of the NASDAQ 100.
Just as important is the Federal Reserve. They are the only part of the US Government worth taking seriously. On Wednesday, they will announce their benchmark borrowing rate. The gambling halls down in Chicago are currently pricing 98.9% odds that rates will remain unchanged. However, there is a press conference scheduled afterwards and we will here from Jay Powell. This is likely to put some direction onto the tape. Then, because the month ends in a sloppy mid-week manner, we will have Non-farm payroll data Friday morning. NFP will put some excitement into the early Friday tape, then I expect everything to fizzle out as participants drop dead from exhaustion and turn their attention to Super Bowl betting, allowing the algorithms to coast market prices into the weekend.
The models are calling for a sideways drift. The signal I am referring to is code named ‘extreme Rose Colored Sunglasses’ [e(RCS)]. The model is prepared as part of the Exodus Strategy Session. The signal name is derived from past observations of what the stock market has done when it has triggered. In most instances of e(RCS) the stock market has drifted sideways, life has been good, everything has taken on a lovely tone as if looking at the world through rose colored lenses. The caveat is, the model doesn’t know about all the upcoming tech earnings, nor does it know Jay Powell is speaking Wednesday. I still trust e(RCS) and will be pressing long bets until at least Wednesday afternoon, but if you want to take your cues from something more observable on your own time, then look no further than the PHLX semiconductor index.
I wrote about the ‘overplay for the underlay’ setup this index had two weeks back. I filed that entry under the ‘spoonfeeding’ category, which I don’t use often. You guys really have no idea how seriously I take blogging. Again, doesn’t matter. WHEN USED PROPERLY, the categories feature of a Word Press blog will show you other entries logged under that category in the ‘RELATED ARTICLES’ section below the current entry. This stuff matters to me, and when I spoon feed you ingrates a tier-one set-up, I like to link it to the other tier-one setups I’ve spoonfed you in the past.
What matters is that any one of yous can use any number of free websites or broker plaforms to monitor the PHLX semiconductor index and you should. It will tell the whole story. It told the story at the beginning of October’18 when it broke down from a very clearly established consolidation pattern. It told the story two weeks ago with the overplay for the underlay, and it will tell the story next week. What do I expect? I made this handy chart so even my special needs readers know where I stand:
Between trading the opening bell and loathing the pity party for unpaid government employees, I will be keeping a close eye on this index. At some point it will tip its hand and everything else will follow.
Through all the big earnings, the SOX.X will tell the story. Through all the US Government bullshit, the SOX.X will tell the story. Through the coldest bite of jack frost, the SOX.X will tell the story. Say it with me, the SOX.X will tell the story. You can literally ignore every other happening in the whole world and have a good sense of how to make money in the stock market. In fact, you’ll probably have quite a bit more clarity than your fellow competitors who find themselves neck deep in BULLSHIT.
So don’t take it from me or my bullish e(RCS) model, just watch the semiconductor index. It has told the story for a very long time. If you want some extracurricular reading, check out my December 2017 blog entry where I lay out the exactly what I see happening as we enter the roaring ’20s.
ciao ciao, kiss kiss and kind regards
One last thing—Tom Brady is an incredible athlete and Bill Belichick is a rock-solid leader. Anyone hating on the New England Patriots doesn’t admire dedication and hard work and probably doesn’t hold themselves to a very high standard. I don’t even watch football. I just respect a true competitive spirit.
Fri Jan 25, 2019 8:57am ESTComments Off on NASDAQ gap up into Friday, back to where the week started, here is the trading plan
NASDAQ futures are coming into Friday gap up after an overnight session featuring elevated range on extreme volume. Price worked higher overnight, trading up to a new weekly high. As we approach cash open price is hovering at the week’s high.
Durable goods orders were supposed to come out at 8:30am and new home sales at 10am but the government shutdown has delayed the release of this data.
Yesterday the NASDAQ printed a normal variation down. The day ebgan with a gap up and small push higher. The rally was contained inside of Wednesday’s range. We chopped out for the rest of the day, riding long the composite volume point of control.
Heading into today my primary expectation is for buyers to gap-and-go higher, trading up to 6772.50 before two way trade ensues.
Hypo 2 stronger buyers trade up to the open weekly gap at 6792.50. Look for sellers up at 6808.75 and two way trade to ensue.
Hypo 3 sellers work into the overnight inventory and close the gap down to 6675.50. Look for buyers down at 6655.25 and two way trade to ensue.
Thu Jan 24, 2019 8:59am ESTComments Off on Jobs data strong, NASDAQ marking time, here is the Thursday trading plan
NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme volume on elevated volume. Price worked sideways overnight, trading inside of the Wednesday cash range. As we approach the open, price is hovering along the daily midpoint. At 8:30am Initial/Continuing jobless claims data came out stronger than expected.
Also on the economic agenda today we have markit composite/manufacturing/service PMI at 9:45am, Leading Index at 10am, Crude Oil inventories at 11am, and 4- and 8-week T-bill auctions at 11:30am.
Yesterday we printed a normal variation down. The day began with gap up. An early attempt higher found responsive sellers ahead of the upper distribution of Tuesday’s doulbe distribution trend down. Sellers took control of the tape, closing the overnight gap and continuing down through the Tuesday low before a bid stepped in. We ended the day near session mid.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6663.25. From here we continue lower, down through overnight low 6653. Look for buyers down at 6572.25 and two way trade to ensue.
Hypo 2 buyers work up through overnight high 6706.50 setting up a move to target 6745 before two way trade ensues.
Hypo 3 stronger buyers trade us up to 6768 before two way trade ensues.