Shares of the odd, AA like institution Weight Watchers International are soaring pre-market after Oprah announced she took a 10% stake in the company.
The media titan declared her agreement to hold the shares for no less than five years, a vote of confidence from one of the most influential people in the world.
This may become a new trend—billionaire endorsements. Who needs corporate buybacks? Last week Ballmer buyers Twitter, this week Oprah buys Weight Watchers, what’s next week? Giorgio Armani buys Crocs?
Anyhow, let’s look back on when Tom Cruise went full Scientology on Oprah’s couch:
The week is kicking off with a gap down on the NASDAQ exchange after a normal session of trade. Price managed to hold the upper half of Friday’s range before heading higher and briefly exceeding the prior swing high, set back on September 17th.
The economic calendar is quiet all week as earnings season heats up. The only economic data point out today is NAHB Housing Market Index at 10m.
Last week we set balance from Monday-to-Wednesday then closed out the week exploring higher prices. Friday we printed a neutral extreme up day after exceeding both side of the initial balance and traversing the entire range three times.
Heading into today my primary expectation is for buyers to push into the overnight inventory and close the weekend gap up to 4434.25, from there look for buyers to continue higher to target the overnight high 4444. This is where it becomes interesting because there is no real resistance until 4467.50. However, my primary expectation is for buyers to stall out just beyond overnight high and two-way trade ensues.
Hypo 2 sellers take out overnight low 4418.50 and set their sights on 4411.50. Look for responsive buyers around 4408.25 and two way trade ensues, perhaps closing the gap up to 4434.25.
Hypo 3 buyers accelerate up through overnight high 4444 and make a push up to 4467.50 before finding responsive sellers and two way trade.
Hypo 4 sellers take out 4407 and test below Friday’s low 4396. Look for responsive buyers around 4390.
Here we are, another Weekly Strategy Session complete, another short call from the model. Therefore, and this is a unique occurrence, I am going into a 3rd consecutive week with a short bias.
The model scored its second highest reading ever, a 3.49. The last two times the spread was this high were February 22nd, 2014 and May 17th, 2015. In both instances of extremely high model scores was saw compressed ranges and a slight upward drift.
There is some supporting evidence to the short bias, including last week’s sector rotations and USD/JPY probing the low-end of its intermediate term range.
But, overall, I am wondering if this sustained overbought status speaks to a major shift occurring in the market. Perhaps a transition away from volatility and a return to docile indices and explosive momentum stocks?
There are a few contextual pieces I will be monitoring this week, but overall I will be playing conservative. Any short duration risk is subject to liquidation and I may add a hedge—most likely a reentry into the biotech short, hopefully at higher prices.
What am I supposed to do? Ignore my own research? Then why do it? For you? It is to strengthen the republic. If I add value and benefit alongside, then I have done my job.
Summary: market model has short bias, but an extremely high reading. The prior two instances of extreme numbers lead to range compression and upward drift. My plan is to raise stops on any short duration risk that starts to work and consider reentering the biotech short.
Want to read the report? There’s one day left to go inside Exodus and have a free trial. Email [email protected] for access. Then find the ‘Strategy Session’ link on the navigation pane.
Even today, after a long week of nudging higher, the system managed an impressive afternoon rally. These ‘events’ have been happening with increased frequency. Seven out of the last eight sessions have seen an afternoon buying spree at the NASDAQ barter and exchange.
Amateurs trade the open, pros the close. This is another useless trading axiom. However, a strong close does wonders for improving the mood–especially heading into the weekend.
I’m headed into the weekend with a chest full of bravado, a pocket full of pesos, and a penchant for risk. What could go wrong?
Fri Oct 16, 2015 12:21pm ESTComments Off on Slow Motion
Speed is gone. I haven’t traded a single futures contract today. A slow tape is the perfect climate for trading errors, especially one this slow.
And after two consecutive weeks of devastating YOLO wins (GOOGL then NFLX) I knew better than to push my luck for a third week. Instead I bought myself some time to think, and went out to December with some Fireeye. I love me some Fireeye down here but I am in no hurry nor do I see the need to have a perfect, weekly call, position to micromanage. I have bigger battles to wage.
Watch your emotions here if you are day trading futures. This is where boredom can lead to compounding errors. Stay cool. Be glad you don’t have Trey Songz stuck in your head.
Fellow Detroit native and owner of the Los Angeles Clippers, Steve Ballmer announced today his 5% stake in Twitter. How did he break the news? VIA TWITTER, HOW ELSE DO PROS COMMUNICATE? Hand signals?
Here’s what you need to know: Twitter is the best mode of communication. If it has one adversary, it is SnapChat. Look for more princes, kings, and capitalist billionaires to clamor for a piece of the champion.
FD: Twitter is my largest investment. Twitter is my ticket out the ghetto.
For a minute, the media thought his account was hacked, mainly because of how odd that tweet looks. But apparently Bloomberg Bussiness got him on the horn and confirmed the news.
Social media is catching a bid across the board on the news.
Fri Oct 16, 2015 8:43am ESTComments Off on Pushing into The Highlands
NASDAQ futures are coming into Friday flat. The globex session featured a normal range and volume during which price managed to hold yesterday’s high and exceed it. Overnight we pushed deep into the range from 09/17, the Fed rate decision day that marked intermediate swing high.
At 9:15 am the Industrial/Manufacturing Production data is out. At 10am the U of Michigan Confidence preliminary read will be released. Perhaps the number will carry more weight as this weekend the school faces off against Michigan State University in football. I have no idea if that matters. At 1pm the Baker Hughes rig count and finally at 4pm the Total Net TIC flows.
Yesterday we printed a big neutral extreme up day. It started with a gap up and price inside Wednesday’s upper quadrant. The we went RE up and stalled, traversed the entire range, tested the low, immediately found buyers and spent the rest of the day trending higher.
Heading into today, my primary expectation is for buyers to work toward overnight high 4426.50. Look for responsive sellers to engage and two way trade to ensue north of the 4400 century mark.
Hypo 2 sellers push and take out overnight low 4405. Look for continuation down to 4389.75 then two way trade to ensue.
Hypo 3, sellers accelerate through 4389 to target 4374 then responsive buyers and Friday churn.
Hypo 4 we continue trending higher to probe above the 09/17 high at 4441.50. Look for responsive selling.
September was a great month for selling the market short. Even for my intraday gaming—the speed left lots of room for me to be in-and-out, capturing 6-10 NASDAQS at a time, in a matter of minutes.
The general uneasiness that speed creates also gave me conviction to press a position short in BIS. I barely got the position on since it never pulled into my wheelhouse. I do a few things well. One is always treating news driven moves the same. The biotech move lower was triggered by a Hillary tweet.
Pop Quiz: What is our expectation on news driven moves?
A. Expect price to return to the ‘scene of the crime’
B. Kiss the level goodbye
Once tape speed left and my morning report forecasted chop, I lost my conviction in the BIS trade. Then I had Exodus flagging oversold, constructive conversations with the 12631 crew on the bull case, and lots of buy programs hitting the NASDAQ. I objectively cut my starter BIS position.
Finally, I wanted to make a note about the extreme NYSE tick reading we had today at 1:12pm. This tick classifies as a ‘party pooper’ signal meaning, per my observations, they happen at or near the end of a move. The market is behaving much differently than I have seen over the last few quarters, so I am skeptical of calling a top here.
That, and after going on a wicked winning streak, Rose Colored sunglasses has take two hits. Such is the nature of an 87% win rate. Even a win rate that high has a statistical draw down period. There’s no sense it trashing the model because of this. But, it may be whispering about a change in character developing in the market.
Sometimes a signal not working tells us something too.
I know this post is a hodge-podge of thoughts. I am weary, but this is all important, thanks for sticking around. The answer to the pop quiz is A.
Many of you made the intelligent choice to take us up on free trials of Exodus yesterday. I worked late into the night, granting access to plebeian, populars, and optimates alike. You’re all equal to me, all cut from the same cloth, all citizens.
You were treated to a spectacle that is somewhat commonplace around these parts—seeing our algorithms nail an inflection point to-the-day.
Hopefully you knew enough about what you were seeing to form an objective bias heading into today and used that objective bias to procure some risk. If not, don’t fret, I can be a friend to you. You see, “The Fly” keeps me around not just because I am on track to be the best futures trader ever, but also because I educate people on how Exodus works.
Schedule a live demo with me, dude.
Finally, if you want in on the trial you have a few days left. We’ll let you in through Sunday, you just have to send your interest to our request hotline [email protected]. Go do it now, and when I return from the local torture purveyor (dentist) I will hook you up.
Ciao mates, I am without hedge, gas peddle firmly wrenched into the floor.
I don’t really see a need to over think these next two days. Speed is down and the goal heading into tomorrow is for market makers to defecate on as many directional bets as it possibly can.
With that in mind, let me reissue my volume profile chart, zoomed for effect, and also to properly identify where this market is likely to spend the most amount of time heading into the weekend. Check it out:
As a citizen, it is your duty to report anyone getting excited (bull or bear) when we press the extremes. We will then issue them an empty bag, to hold, while an audience of onlookers throws stones and fruit at them.
