Back on The Bottom of The Range

Nasdaq futures are trading lower as we head into Friday’s trade. The session was active even before the Non-farm Payroll data but obviously the pace has increased since the data. Range and volume have extended beyond first sigma and it will be interesting to see if the volumes carry into the day session of if we instead see action fizzle out as the day progresses.

Also on the calendar today we have the Baker Hughes rig count at 1pm and Consumer Credit at 3pm.

Yesterday we printed a normal variation down to press the low end of our range. Down there we found buyers who emerged late in the session despite being bludgeoned most of the day with selling pressure. If affirms the idea of intermediate term balance.

Heading into today, I will patiently observe the first hour, allowing the post-NFP dust to settle. However, my primary expectation is for buyers to push into the overnight inventory to close the gap up to 4497.50 and continue to target the overnight high 4506.50.

Hypo 2 is a seller push down to test below yesterday’s low 4473.25. Look for buyers at 4460.50 then again at 4450.50.

Hypo 3 we chop inside of 4473 – 4500 range.

Levels:

The house of raul is swaying beneath my feet. I am operating my terminal under the influence of unbridled, SHOMP supported winship. There is a special feeling in the world. Perhaps you achieve it through alcohol and friends, or MOLLY (no MCP). I achieve it by having the one stock up BIG’A’DICKD when the market is getting the plunger.

I’m not even going to tell you what ticker it is because you guys will ruin it. Just know it had the institutional endorsement of Exodus and it’s surpassing plus six as we enter the witching hour.

For fucked sake people, when are you going to stop relying on your emotions (intuition, gut feel, puke, die) to make decisions?

I have so much shit to do right now. I bought tomorrow’s calls in AAPL and GOOGL.

FUCKWITHMEYOUKNOWIGOTIT

The Nasdaq has officially filed all participants into a narrow waiting room until further notice—further notice likely being tomorrow morning’s Nonfarm Payroll data. The futures contract threw down another massive overnight session last night, with range well beyond second sigma and volume not far behind it. But nothing really happened in the context of intermediate term balance. We just went back to the low-end of the range.

At 8:30am we had initial/continuing jobless claims which hardly saw a reaction likely due to the upcoming NFP data. At 10:30am we have the weekly natural gas storage report then an open calendar.

The intermediate term timeframe is balanced and range bound. To expect anything less than buyers at the low end of it and sellers at the top end seems foolish.

Until the range breaks the best play is fade the edges.

Ranges, she’s a beauty:

Funny now everyone wants to buy the semiconductors and sell the transportation stocks. Clown babies, held in the highest editorial regard, parading around twitter and the teevee. It’s dumb satire at best, damaging at worst.

I’ve had enough of it. My purpose is clear now. I must aggressively convert you CNBC watching, WSJ reading citizens into Exodus users. That way, you can buy semiconductors before the go bonanza.

Sure, yes, indeed, they can still run. But has a little bit of timing ever hurt anyone? And don’t give that nonsense about market timing being impossible like your community college finance teacher taught you. Fuck him and his textbook.

First we use the book to light the fireplace. Then we go inside Exodus and use supercomputers to hone into rotations. Listen to what the man says, GET IN!

I’ve done nothing today except buy some July DDD calls and ping pong the Nasdaqarie.

Nasdaq futures are higher as we head into Wednesday trade after news of sustained QE from the Eurozone sent prices higher. The session features a second sigma range of nearly 40 points on high-end first sigma volume. At 8:30am US Trade Balance data came in a bit stronger than expected, further fueling the strength in the USD/JPY pair.

Also on the docket today we have ISM Non-Manufacturing at 10am and Fed Beige Book at 2pm. Also, the further we press into the week, the more traders will be shifting their attention to Friday’s Non-Farm Payroll data.

Even with the strong overnight action price is still firmly within the intermediate term balance are we have been discussing. Yesterday we printed a normal variation up day after starting out weak. Buyers were unable to press above Monday’s high before sellers came in and faded the action. The question on my mind is whether we’re going to leave this intermediate term range before hearing Friday’s NFP data.

Heading into today, my primary expectation is for some continued strength off the open to take out overnight high 4540.75 and close the open gap up at 4543.25. From here I will look for responsive sellers to enter and push us back toward the 4530 VPOC.

Hypo 2 sellers push into the overnight inventory to test the LVN at 4520.50. If buyer no show then we push down through the pocket to target the NVPOC at 4510 and the overnight gap fill to 4502.75.

Hypo 3 gap and go higher, close the gap up to 4543.25 early and test above last Wednesday’s high 4551 to target a measured move to 4557.

Levels:

Index futures closed weak for a second day, but not before being one of the most easy-going sessions in weeks. Stat heads had a ball today if they had a good vision of the field. We’re in intermediate term balance, two-timeframes are likely participating, and little-to-nothing is being accomplished like we’re Greeks or something.

I was faced with a decision this afternoon as we entered the witching hour aka 3-4:15pm ‘MERICA time. I could a. take a valid signal to fade the afternoon sell flow, or b. ride my speed bike 19 miles to the beach. I chose to ride! We have blue bird skies, cool temps, and my hypo three was complete.

Little did I know this excursion would result in a mechanical attack on my person, specifically my tender saddle cavity. About 10 miles out a rough bump (Detroit roads are FAKd) literally sheared the bolt affixing my seat in place. My sphincter reacted before I even thought and clenched the seat, which saved the humiliation of the saddle pole sodomizing me.

The seat can be salvaged, I rode home standing, and my manhood is in-tact. Why do I share such an incident? Muscle memory—it takes time, but once trade management becomes as subconscious as muscle memory, you can speed down the narrow corridors of the market without being on the receiving end of a market enema.

h/t @CatsAndMoney for the cover pic

I have this massive wish list of stocks I want to own. My thirst for equities couldn’t be quenched by the falls of Niagara. Tickers, as faaar the eye can see, extend like laser beams from my oculus organs.

Exodus triangulated on XLY over the weekend—in particular a certain set of low-end retailers and, get this, appliances. It used to be a didn’t give a fuck about discretion. Then I built an Exodus basket containing the XLY components and was like, damn, these stocks are the fire.

I still like utilities, transports, and REITs. I like them like an old baseball mitt. The only way I can buy any of these is to make more money and pile it into the stocked market, or trade in some existing exposure.

So it’s that simple. I need to make more money like an enterprising lad and pumpeth it, my liquid worth, into these stocks. You should too.

Hypo 3 played out this morning. See the field mates, Bagger Vance style. When we’re forming balance, the field is a ping pong table, and your boy raul is the player on the far side. This is how the morning played out:

Europe took to the main stage overnight both with their economic reports and news bits revolving around the Greeks. We’re heading into US cash open on the tails of a historic overnight session featuring range well beyond second sigma and volume nearly as elevated. On the Nasdaq, 60,000 contracts is the 2^nd sigma threshold, we are nearly exceeding it with just under an hour until the open.

The standout feature of the session is a huge, 41.25 point rotation lower right around the time German Employment data was released, followed by a 40.50 point counter rotation higher to effectively undo the selling. Since then we have churned between the peak and valley. The selling managed to take back nearly the entire range of Wednesday’s trend day before finding the responsive bid. It’s interesting to note that buyers came in right around the 5am Euro-Zone CPI data—a very news/headline driven market.

Fortunately we only have one item on the US agenda today, Factory Orders at 10am.

Yesterday we printed a normal day-type, a structure that’s anything but normal, with a 5.66% occurrence rate since January 2013. It featured a big push lower early on, but no range extension. Instead neither sellers nor buyers became initiative. Instead we worked the rest of the day within the range.

It speaks to the developing balance we’ve been discussing since two weekends back. We are in a 2-timeframe market meaning both locals and longer term participants are active In these conditions, intraday levels can become less reliable and it’s prudent to give more weight to the higher timeframe levels presented by the developing volume profile. With that in mind, you will notice I am only presenting the volume profile below to emphasize these price levels.

Heading into today, my primary expectation is for buyers to work into the overnight inventory to close the gap up to 4521.75. Look for buyers to continue up to target the overnight high 4529.75 with a stretch target of 4543.25.

Hypo 2 is a quick push up above overnight night 4529.75 and beyond to close the gap up to 4543.25 where we find responsive sellers who push us back into 4530.

Hypo 3 sellers push early to test yesterday’s low 4486 but cannot take out overnight low 4480.75 and responsive buyers push us back up for a gap fill to 4521.75.

Hypo 4 sellers push down to 4460.50, look for responsive buyers here otherwise a test down to 4450.

Levels:

If you’ve been hesitant to position into your favorite growth stock because a. interest rates b. valuations, or c. earthquakes and Greeks then today is your gut check. Today is the cold dagger of truth that a correction isn’t coming.

In reality, the market has been correcting for nearly a year and a half. It’s done so via vigorous rotations and spine twisting volatility. All the while these indices hardly flinch—they’re stable and Fed funded.

So if you aren’t already “balls deep” (vile saying) in the bull camp, you might want to do so ASAP. Find your favorite consumer discretionary stock and buy it MOW!