Relying on Uncle Kurt

Coming into the week I wanted to see the Russell average lead to the upside. It was the most resilient index during last week’s horror show and if it could turn around and play offense after presenting a decent defense then I would get excited. But that is not the case. In fact Uncle Russell is the laggard thus far.

We started the day off high on hope. The situation was desperate last night and fiddly-doo we woke up to the fix. This sort of bipolar behavior is normal in my native Michigan. We have a saying, “Don’t like the weather? Take a nap.”   I was up about 6% this morning but here at the close my book is barely up two.

By afternoon I managed to regain my bearings and step back into Nasdaqs to offer liquidity. It went well. I was able to dial down to the 1.5 point renkos. I imagine the 0.75 point reknos will stay on the shelf for a while.

I am constructive this week. We have alignments that bode well for bulls.   But if the Russell doesn’t go Snake Plissken soon I may duck and cover.

I booked my BIS a few minutes ago, locking in about 18% in gains and also stopped out of my small NUGT runner.  Now I am long only with cash up to about 25%.  More later.

Nasdaq futures are higher on the globex session after printing another extreme session. The range and volume both exceeded 3^rd sigma which means statistically it was rare session. Price action was contained inside yesterday’s range, barely. We printed a double top at Monday’s high 4196.25.

The economic calendar picks up steam today. We have the Case Shiller-20 at 9am, Markit Composite PMI at 9:45am, and both Consumer Confidence and New Home Sales at 10am.

Yesterday price opened gap down and quickly pushed lower before triggering a circuit breaker. At this time we had closed the open gap from 10/22/14 at 3950. Next we saw an aggressive push higher which lasted into lunchtime. Buyers stalled just before last Friday’s close and price rolled over. By the close of the session we traded back down into the lower quadrant of the day.

Heading into today, my primary expectation is for sellers to push into the overnight inventory and test lower. Look for buyers to defend 4122 and then a push to take out overnight high 4196.25.

Hypo 2 sellers push down through 4122 opening up a push down to 4139.50.

Hypo 3 Tuesday grind mode sets in, and we churn between 4150 and 4100 with a slight downward skew.

Levels:

I run a renko chart for triggering entries into [and out of] Nasdaq futures. They are great charts because the candle print is based on movement in price not time. I usually run a 0.75 point bar, when pace picks up I switch to 1.5 pointers. Today I was running massive 3 point renkos and they were being machine gunned onto the chart all day long.

50 point unidirectional moves were the norm throughout the entire session.  A feather could push this market 7 handles. I got motion sickness by noon, ate a hammed burger (epic nausea remedy) by 2, and was in a catatonic trance from 3pm to close.

Today changed me. Every teevee I crossed was staring at me like a demonic robot. Phone calls came from relatives and friends. I only traded from about 10:15am-11am then had to stop. There were water puddles by my feet. I was full on losing it.

I bought American Apparel stock, WTF?

I will spend the evening regrouping. Sleep seems unlikely. I need to rebuild several of my charts before I can step back into the fray.

That’s all I can say. This environment is new to me. I am seeking the council of elders just as you should be. But remember: be skeptical of anyone wearing a suit, especially if they have an American Flag pinned to their lapel.

Nasdaq futures are coming into the week down over 200 points from Friday’s close. The overnight session has exceeded 3^rd sigma stats on both range and volume meaning what we see here is an outlier-type event. Price trended lower for most of the session and is currently trading down into prices unseen since October 2014.

The economic calendar is busy this week, but today we have no economic events to consider.

Last week started with a strong up day, Tuesday marked time with a slight down drift, Wednesday was weak then pushed up to neutral and faded, Thursday and Friday we trended lower. We closed the week out trending lower, with price closing around session low.

Heading into today my primary expectation is for selling to continue. We may see buyers push into the overnight inventory. Look for sellers ahead of 4026 and continued selling. Downside targets include the 10/22/14 open gap at 3950 then the 10/20/2014 open gap at 3867.50.

Hypo 2 buyers step in hard. Push up through 4026. Look for sellers around 4073. If buyers can blow through here then a pole climb up to 4154.

Hypo 3 tight churn on the open with a slight downward skew.

Levels:

Your life is on the line this week. Markets are running at high speed. This is reduce your position size and expect to take heat conditions. If you aren’t fully prepared to execute, it will be your limbs we sacrifice to cleanse the demons out of the Nasdaqs.

If we gap up into the week expect it to fade. If we gap down conditions are more ideal for a nice flush and flip. The weekly gap has been a solid fade for months. Of course, this time could be different. It sure looks different.

Exodus members, do you know I write a strategy session every week? And that it is included with your market intelligence software at no extra cost? We need to make sure you are reading this thing—it called the short for 4 consecutive weeks aka it nailed the correction. Anyhow, I just published the latest edition. Check it out.

As for the rest of you, expect your positions to be hunted by psychopathic “liquidity” algos wielding foot long kitchen knives.

The markets are not to be trusted. They are driven by cold logic. You know who else used cold logic? Nazis. The soldiers gunning each other down in the financial markets are robots. They were designed by humans but empathy cannot be uploaded.

They care not for their fellow man. Your best defense is to develop your own robots to fight back. If this skill set is beyond your capacity, then form an alliance with a stranger’s robots and invest hours understanding the inner workings.

Certain conditions call for certain market approaches. What worked 2 years ago is not nearly as effective today. A few things remain the same—auction theory is an honest guide to short term behavior, and Exodus continues to dominate FinTech.

In fast times like these your plans (written outside the heat of trading hours) will be tested. Afterwards there is a good chance you will need to tweak your plan. It happens all the time. Remaining stubborn and static is how you end up a cadaver (extra Robert Durst).

I rolled out of QID and into QLD too soon. I felt special, if only for a moment, when we ripped 50 Nasdaqs higher right after I swapped bias. Then we rick rolled, rallied, and rick rolled again. I’ve added to my QLD around the current lows.

You hear “losers average losers” and other mantras spouted off. Please, ignore them, find what works for you, and have a plan. Many come to trading because of the freedom it promises. But ultimately you might find yourself following lots of rules. At least I do. I know my limitations. The good news is you get to write the rules.  The hard part will be following them, especially if you are an impulsive creature like me.

I stuck with BIS to see if the ‘ultimate comeuppance’ is destined to strike the biotech investors. I have a touch of NUGT left too. I feel neutral. However I do not trust these markets. Come noon Sunday I shall have a more firm bias.  Three consecutive weeks of bear calls has me sort of in love with my model, but it’s best trade is its next trade…I hope.

Now I must make haste to a poolside for summer is drawing to an end.

Fungula logic this morning.  NAS TRIN calling the early down move into question.  Booked QID, sashayed into QLD and took down some SCTY calls.

More later…

Nasdaq futures are pricing a gap down heading into Friday. The index continued lower after trending lower Thursday. The action featured an elevated range but printed on extremely abnormal volume—well over the 60k second sigma mark. Price managed to push down below the open gap from 07/09 and briefly poke below the swing low before finding buyers. Sellers could be seen defending Thursday’s range and rolling price over as we head into the open.

The economic docket is light this summer Friday, with Markit Manufacturing PMI at 9:45am and the Baker Hughes Rig Count at 1pm.

Yesterday was a trend day down in market profile context. Such a day type is considered a ‘risk free’ entry into the following session meaning expectation is we exceed the trend day’s range by at least a tick the following session. The day started with a gap down followed by an opening sell drive. Price spent some time negotiating the 4400 century mark before initiating a fresh leg lower to close the 07/10 open gap at 4409.

Our contextual sub indices of the Nasdaq are interesting here. We saw the anticipated flush lower in semiconductors, but the Nasdsaq Transportation index is well off its recent lows. This divergence is a feather in the bull cap.

Heading into today, my primary expectation is for any early excitement to quickly fizzle into Friday summer trade. Today is monthly option expiration day, and the most important action is pinning both longs and shorts down. Look for buyers to attempt a move back up to 4363.50 overnight gap but struggle and roll over then take out overnight low 4328.75. Price continues exploring lower prices. Look for responsive buyers ahead of the 3/26 low at 4271.75 then a rip back into Thursday’s range to end the session.

Hypo 2 sellers gap and go lower, take out overnight low 4328.75 quick, then crickets, then a sharp reversal to close up near 4395.75 MCVPOC and/or 4400.

Hypo 3 full on liquidation—take out overnight low 4328.75 and accelerate to target the 3/26 low at 4271.75.

Hypo 4 strong push to close the overnight gap up to 4363.50 and then a pole climb up to 4400, churn, then initiative buyers push up to 4436.50.

Levels:

The market behavior that has transpired over the last three weeks is why I got into this wretched game of research and blogging.  I wanted to make money trading and was fed up with the lack of actionable foresight offered.  iBankCoin exists because it needs to—to call out all the fucking bullshit that is spewed from teevee pundits and online ‘sages’.

I swear to god I want to murder some of you blowhards.  Instead I use every noun and verb on you clown babies.  I can’t break the locks that bound you to mediocrity.  What I can do is produce the type of content, day in and out, that I wished existed when I was picking my way though the shit as a greenhorn.

Three weeks, nothing more, I have been hammering the short case.  The farthest I will cast my clairvoyance is 5 days and even then it’s just a set of probabilities applied with an open mind.

iBankCoin has this little newsletter we blast out every week to prospective clients.  You probably didn’t know that. We have irons in many fires.   This week’s title actually generated snarky replies from the list folk.  It’s like I’m doing an injustice informing people what very well could happen.  It read as follows:

Weekly Exodus Intelligence – Trouble on The Horizon? [sweating sad face emoticon, not pictured]

The emoticon really hammered the message home but WordPress is not feeling it.

Whatever, none of this matters.  In 100 years iBankCoin will remain a beacon of truth in a sea of rabble-rouses and punk bitches.  By not telling your neighbors and colleagues to read our site daily and demanding they JOIN OUR RANKS is an injustice that will haunt you and your family.  Our ubiquitous presence is everywhere.  Your phone and laptop cameras are our eyes.  It is in your best interest we exist and your compliance is strongly urged.

Into the bell I will likely cover this 24 hour QID trade for a quick 5% then hunt a few select longs.  I will keep BIS and pray to your god and mine that judgment rain down upon biotech investors worldwide.  Top picks: BANKS and SCTY.

Now I am off harass party store patrons whilst drinking malt liquor straight from the brown bag.

PETE GABRIEL EVERYBODY, listen loud and feel my hammer: