Stocklabs wins again

Readers of the Strategy Session know I’ve taken a keen interest in the 6-month technical oversold signal generated by Stocklabs. That’s because on a 10-year back test of 47 instances it has a win rate of nearly 64% over 10 days. The most signal occurred on March 24th and did a solid job of nailing a rally. Behold:

Seeing The Fly’s Time Machine consistently forecast market action all these years has kept me loyal to the iBankCoin banner. It is my duty to be accountable to the team behind the scenes here and also to anyone who wants to take ownership of their investment fate using these tools.

Anyhow, I am out of rythem with the markets after sitting out the last couple opening bells. Therefore, and without regret, I shall take today off as well. No sense sullying my weekend mind by forcing some trades into the /nq.

Have a strong cocked weekend, and I shall be back Sunday,

Raul Santos, April 9th 2021

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One impulse commonly exhibited by the ego of a trader is to short a move like we’ve seen this week — usually this low-value instinct kicks in after missing the primary move.

Makes the trader feel smart again. Yeah. Bet against the primary move and fade the herd yeah.

No thanks.

First of all the humble Raul blog (hRb) has been advocating for heavy investments in Big Tech all along. Secondly, the last four weeks of Strategy Sessions have leaned bullish. Thirdly we had a bunker buster back a the end of February and that’s when I deployed lots of fresh capital into the markets. Now my job is to get fat off the land. The seeds were planted, they grew, now I just gotta feed them occasionally and give lots of water and wait for them to ripen at the end of the year. Then harvest.

I didn’t buy any Tesla in the first quarter and I may not buy any in the second quarter either. It is still my largest position by quite a lot, but an astute reader may have picked up my subtle drift towards advocating other Big Tech tickers. There’s a reason for that. Tesla printed a failed auction right at a big fat round number many moons ago. Those can take months, quarters, to resolve.

My optimistic outlook for daddy Elon’s Tesla has not changed, but being a modern chartist (no head and shoulders plebbery) I must acknowledge when it is best to back off a thesis and let it simmer while pressing other campaigns. Campaigns like Noble Jacked Dorsey’s Twitter. I am more bullish on Twitter than ever. They banned the people who were ruining the platform. Jack’s humility is contagious. And there are rumors that they’re on the hunt to buy other agencies like gay boy Clubhouse. All of this is bullish.

I am also super bullish on the FTT brokerage tokens. That feller in charge at FTT is some kind of idiot savant, sleeping on beaned bags and making billions, developing synthetic equities. Did you know coinbase stock is already trading on FTT? Think about that, while you’re left trading fucking NIO and PLUG and other shit stocks. FTT has found a way to make Coinbase shares already tradable. Also, U.S. residents aren’t even allowed to own FTT tokens. That barrier to entry also present a unique opportunity.

So I am busy elsewhere, in stuff like that and building pineapple fountains, all while I wait for the damn counter contractor to show up so I can finish the heckin’ kitchen.

I’ve planted beets, carrots, mustard spinach and started asparagus.

That’s about it. In essence. Now is the time do to nothing.

Ho ho ho,

Raul Santos, April 8th 2021

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There isn’t much opportunity for me here left today. Around 7am NEW YORK the buyers stepped in and did the only thing I would’a done which’is’to work price back up through yesterday’s trend day high.

That’s a high probability set-up.

I deal in high probability set-ups and hustling opening bell.

I work too hardt.

On a day like this, when the weather folks are saying its gonna be about 80, and the NASDAQ has a tiny risk/reward, my job is to go work the land.

The stock market (and cryptos) have an ‘all clear’ to rally through the rest of the year. You’ll have some ‘sell in May’ types trying to stoke up some fear here soon. Ignore them. Just hunker into the best tickers and cruise into year-end. Once Elon’s Tesla starts printing CyberTrucks we’ll be looking for a broad, multi-year correction in big tech equity and crypto as humans start to shift their positioning into real things.

So it is written. So it shall be. I expand on this line of thinking at the bottom of last Sunday’s blog.

Trade’em well today lads. I am off to survey my next hole dig.

Raul Santos, April 6th 2021

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NASDAQ futures are coming into the first full week of the second quarter pro gap up after an overnight session featuring normal volume on elevated range. Price was balanced overnight, first testing last Thursday’s high then rallying away from it. As we approach cash open price is hovering up at levels unseen since February 22nd.

On the economic calendar today we have factory orders and ISM services index at 10am followed by 3- and 6-month T-bill auctions at 11:30am.

Last week was choppy through Tuesday then price rallied through to end of Thursday. Closed Friday.

The last week performance of each major index is shown below:

On Thursday the NASDAQ printed a normal variation up. The day began with a gap up beyond range. Buyers drove higher off the open and managed to print a range extension up early on. Then price chopped along the mid for pretty much the rest of the session before ramping back up to the highs near the close.

Heading into today my primary expectation is for buyers to gap-and-go higher, driving up to 13,500 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 13,325.75, take out overnight low 13,304.25 before two way trade ensues.

Hypo 3 stronger buyers trade up to 13,550 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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For three hundred and thirty two weeks I’ve sat down and done one-to-four hours of stock market research, augmented by Exodus and Multicharts and MICROSOFT EXCEL. I will not stop doing this work because it is what got me to where I am today — a consistently profitable trader who can safely trade alongside institutions. Institutions, mind you, who command exponentially more resources then your sweet Uncle Baby Raul.

The report is simply being transitioned out from behind the Exodus paywall to here, on the public blog, free for consumption.

I’ve never been a fan of hoarding information.

When I started this odd adventure as an anonymous internet trader some ten years ago it was because the institutions of higher learning had failed me. Turns out a degree in finance doesn’t get you any further along the path to being a consistently profitable trader.

I went online to learn more.

I assumed an alias because I was earning a meaningful salary from Corporate America (Sonny says the working mans a sucker and I agree) and didn’t want them to see me out here, riding-round-gettin-it, while also drawing a salary.

Paywalls always bothered me. I paid thousands in the quest to learn more. Dealt with so many charlatans and a few all around decent traders.

Oh boy I am rambling. In short — I never did this for any of you. It was for me and it continues to be for me. I’ve managed to meet some great people along the way, and I like to think I’ve helped a few others experience that glorious “a-ha” moment in their own trading.

And that’s good enough for me.

I’m doing real fine. Weekend research shall continue. Peep the bottom of this blog for this week’s entry.

One thing I hope to make abundantly clear is that before I take my style of trades, many of which last less than ten minutes, I have put several hours of work in beforehand. I am like crocodile. Sitting in the mud thinking about making to kill but doing nothing, then all at once attacking with the rip force of ten women.

Enough of that. Here is my prediction for the rest of this year. I will start to amplify this prediction as the weeks and months go by because it came to me while I was gardening and it was the first good thought I’ve had in months and I expect it was sent from the old gods and I want to share it with you:

Big Tech and crypto currencies, all of them and their NFTs, can rally until Elon’s Tesla starts printing Cybertrucks. The moment Cybertrucks start rolling out of those tents in the desert and being delivered, will likely market (not the end) but the beginning of a solid pause in non-tangible asset appreciation. The Cybertruck really is a perfect mechanic representation of who these people are. Technocrats KIND OF. Big Tech/crypto investors are like everything that was promised in 1990 as being futuristic, plus Saved By The Bell, with a dash of Reddit, made into a human. And that is what the CyberTruck is, a car in meme form. We are going to see these investors shift their resources away from the fucking fairy dust that is crypto and BIG TECH and it will start with buying a Cybertruck. And then that purchase is going to change their life. They’re going to start seeing everything differently. More like how I already see things. And realize that money is better invested in real things — cement and energy generation and steel and irrigation. And as their/our wealth shifts to real things, crypto and Big Tech prices will stagnate.

So it is written. So it shall be.

Now whether or not this plays out I can assure you of two things — my predictions don’t matter to you. They matter to me because everything is a game in my jalopy of a brain and having good explanations is how I can have faith in my long-term moves.  Faith in the trajectory of my brief mortal life. Second — even if my prediction plays out, to the tee, and I milk Big Tech and Crypto for the next nine months then sell a bit, live, under the premise of this prediction, I still won’t be popular on Finance Twitter.

Selah.

Alright enough of that also. Cheers to a fruitful second quarter.

Raul Santos, April 5th 2021

And now the Strategy Session. Enjoy:

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Stocklabs Strategy Session: 04/05/21 – 04/09/21

I. Executive Summary

Raul’s bias score 3.53, medium bull. Rally into Wednesday afternoon. Then look for third reaction to the FOMC minutes to provide direction into the second half of the week.

II. RECAP OF THE ACTION

Choppy through Tuesday then a rally through to end of Thursday. Closed Friday.

The last week performance of each major index is shown below:

Rotational Report:

Rotation into key drivers, Tech and Discretionary. Everything else sort of mixed.

slightly bullish

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Four weeks back we had major buy flows. It wasn’t really until last week that we saw follow through on them. But now we have. The last two big money flow pushes have been to the buy side.

Median return last week was nearly +2.5%  and volume delta over the last 30 days is negative.

What we need. And I will discuss this with The Fly, is a 1-week volume delta. That would help us make actionable use of the volume delta data Stocklabs has.

Money flows are bullish.

Here are this week’s results:

III. Stocklabs ACADEMY

Looking back at the confluence of bullish signals last week

On Thursday, March 18 Stocklabs flagged oversold on the 3-month technical and hybrid signals. You may notice I never include any 3-month signals in the Weekly Strategy Session, but lately I’ve been giving it more consideration. That signal cycle ended at the end of Thursday. Here is the final performance of each major index during the cycle:

The 3-month technical oversold is worth tracking. It has a decent probability of success into the second half of the cycle.

We also had a 6-month Tech oversold cycle trigger March 24^th. The tech signal has better stats on this timeframe than the hybrid. Here are the performance stats of each index so far for this cycle:

Finally, last week we had Indexmodel going extreme Rose Colored Sunglasses bullish bias. A third bullish signal.

When the proverbial deck stacks up like this, that is the time to press our convictions.

That said. We have only the tail end of the 6-month oversold signal and nothing else heading into next week. Maybe we are not pressing our trades as hard. Quicker scalps.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Rally into Wednesday afternoon. Then look for third reaction to the FOMC minutes to provide direction into the second half of the week.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Semiconductors pop out of range, testing sellers

Markets fluctuate between two states—balance and discovery.  Discovery is an explosive directional move and can last for months.  In theory, the longer the compression leading up to a break, the more order flow energy to push the discovery phase.

We are monitoring two instruments, the Nasdaq Transportation Index and the PHLX Semiconductor Index.

Transports continue to steadily discovering new higher prices.

See below:

Semiconductors, if you recall, had that obvious-looking head-and-shoulders pattern in place for a few weeks. We mostly ignored it, but noted its existence, because often times those overly apparent chart patterns don’t work out for the arm-chair analysts.

Instead we focus where we always focus—is it balance or discovery? The last trading session of last week makes it look like we’re abandoning the range we established in a campaign to start a fresh leg of discovery up. However, I am not so sure. The range below is likely to exert some magnetic force, at least it has the potential, heading into next week.

My call is that we are still in a range-bound market on the semiconductors but I am not certain.

See below:

V. INDEX MODEL

Bias model is neutral after flagging extreme Rose Colored Sunglasses last week after being neutral hree weeks before that after signaling Bunker Buster five weeks ago after being neutral for the thirteen weeks prior to that.

No bias heading into next week.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“Don’t be a hero. Don’t have an ego. Always question yourself and your ability. Don’t ever feel that you are very good. The second you do, you are dead.” Paul Tudor Jones

Trade simple, accept your weaknesses

 

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NASDSAQ futures are coming into the final trading day of the week, the first trading day of Q2 (sloppy alignment) up a quick +140 after an overnight session featuring extreme range on elevated volume. Price steadily rallied overnight, unidrectionally rotating up through the Wednesday high and up beyond the gap left behind back on Wednesday March 17th. At 8:30am jobless claims data came out worse than expected. As we approach cash open price is hovering up near those 03/17 highs.

Also on the economic calendar today we have ISM manufacturing and construction spending at 10am followed by 4- and 8-week T-bill auctions at 11:30am.

Yesterday we printed a double distribution trend up. The day began with a gap up beyond the Tuesday high, up near the Monday high. Buyers drove into the open, rapidly sending price up to the 13,100 century mark before a brief pause. Then price continued a bit higher but near took out last week’s high. Instead we spent the rest of the session chopping along the upper quadrant of the daily range.

Heading into today my primary expectation is for buyers to gap and go a touch higher, tagging 13,255 before two way trade ensues.

Hypo 2 stronger buyers tag 13,300 before two way trade ensues.

Hypo 3 sellers press into the overnight inventory and close the gap down to 13,085.25 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are coming into the final day of the first quarter up about +80 after an overnight session featuring extreme range and volume. Price was balanced overnight until about 6am when aggressive buyers stepped in and began working price higher. Said buyers rallied price up beyond the Tuesday range. At 8:15am ADP employment payroll data came out in-line with expectations and as we approach cash open price is hovering in the upper quadrant of Monday’s range.

Also on the economic calendar today we have pending home sales at 10am followed by crude oil inventories at 10:30am.

Yesterday we printed a normal variation up. The day began with gap down in range that sellers drove down into, stopping just before taking out the Monday low. Instead there was a small rotation higher before sellers did probe the Monday low. This selling action ended abruptly before the market could go range extension down. Instead buyers formed an excess low before reclaiming the midpoint. And after flagging along the morning high for about an hour price went range extension up. Then price fell back to the midpoint and chopped along the top side of it for many hours before a late-day ramp higher saw price end on the highs.

Heading into today my primary expectation is for sellers to attempt to reclaim Tuesday high 12,916.25 but buyers reject a move back into range setting up a rally to 13,016.50 before two way trade ensues.

Hypo 2 buyers gap-and-go higher, sustaining trade above 13,016.50 early on to set up a run to 13,100.

Hypo 3 sellers work a full gap fill down to 12,893 before continuing lower, down through overnight low 12,858.25. Look for buyers just below at 12,850 and for two way trade to ensue.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are heading into the final Tuesday of the second quarter down about -90 after an overnight session featuring extreme range and volume. Price steadily rotated lower overnight, traversing most of the Monday range but never exceeding its ranges. As we approach cash open price is hovering in the lower quadrant of Monday’s range.

On the economic calendar today we have consumer confidence at 10am.

Yesterday we printed a normal variation up. The day began with a slight gap down in range. Buyers resolved the gap with a small drive higher on the open before sellers stepped in and made a hard drive lower. This selling managed to tag the Friday naked VPOC nearly to the tick before finding a strong responsive bid. Said bidders stepped in ahead of the first hour, meaning no range extension had taken place. Instead there was a battle along the daily low before a spike back to the midpoint just before 11am New York. Sellers defended the mid twice, but on the first push just after lunchtime buyers pressed through the mid and rapidly made a new daily high, going range extension up in the process. Then price checked back to the mid late in the afternoon, buyers defended, and we wrapped up the session trading in the upper quad.

Of note—the daily VPOC never shifted up to the highs. Instead it remained down where that morning battle took place, down in the lower quad.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 12,975.75. Buyers continue higher, tagging 13,000 before two way trade ensues.

Hypo 2 sellers gap-and-go lower, tagging 12,800 before two way trade ensues.

Hypo 3 stronger sellers tag 12,736.25 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ futures are down about -55 after an overnight session featuring extreme range and volume. Price first worked lower overnight, trading down to last Friday’s midpoint, catching a little bounce, then further down, right about exactly to the 68% retrace level of the big Friday afternoon rally. Since then price rallied about +150 then faded down about -40. As we approach cash open, price is hovering in the upper quadrant of Friday’s range.

On the economic calendar today we have 3- and 6-month T-bill auctions at 11:30am.

Last week we had conviction buying Monday. Seller control Tuesday through Thursday morning. Then a sharp excess low formed Thursday, ultimately leading to a rally into the weekend which was accentuated by a late Friday ramp. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a neutral extreme up. The day began with a slight gap down in range. Buyers quickly resolved the gap during an open drive up and price went into a range extension up before New York lunch. Then the action became choppy, chopping all over the midpoint and eventually making a new high of day before a hard sell pressed to a new low of day and into a neutral print. Those sellers never took out overnight low. Instead just before 3pm a responsive buyers stepped in and what followed was a strong ramp that eventually made a new daily high and close at it.

Heading into today my primary expectation is for buyers to work a gap fill up to 12,959 then continue higher, up through overnight high 12,978. Look for sellers up at 13,000 and for two way trade to ensue.

Hypo 2 stronger buyers trade up to tag the 03/23 naked VPOC up at 13,092 before two way trade ensues.

Hypo 3 sellers press down through overnight low 12,807.50 on their way to tagging 12,800.

Levels:

Volume profiles, gaps and measured moves:

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Extreme emotions are not helpful to the investor/trader. Nor is it to be totally dead inside. Awareness is key. Know thyself. Know also that your ego is not your amigo. So whatever that dashing lad in the mirror is saying to you in your pretty head–take it with a grain of salt.

We gotta be so careful to protect our energy. Our job as progressive, successful participants in society is to seek good explanations for events. There are billion dollar industries, and even modestly successful websites, built on peddling bad explanations for how/why the market behaves the way it does.

For years, about nine, I’ve offered an objective explanation for market behavior and walked through life, live, one week then one day at a time, chronicling how I see things, what I am doing and how it is working out.

Last week was, in my subjective point-of-view, a body of work that I would consider art. Behold:

Alongside these entries, I further discussed my actions on Twitter (@IndexModel) where I am easily one of the most well-known and least popular finance handles in existence.

What is popular? Jokes. MEMES. I like memes. Strong emotional outbursts.

I like memes. Last week’s boat memes have been great fun.

What is not popular? Some dude with laser eyes putting on a seminar in consistent profitability.

Fine.

I never wanted to be popular on the internets. It comes at too great a cost. Too many loons and I work to hardt as it is to have privacy so I can do my psychedelics in peace.

Anyhow. I have several indicators lining up bullish into quarter end. I intend to work the long side of the tape via the NASDAQ 100 futures as good set-ups present themselves while doing nothing with my massive Twitter and Del Taco positions.

Cheers to the week.

Raul Santos, March 28th 2021

And now, the Sunday Research that powers everything I do. Enjoy:

Stocklabs Strategy Session: 03/29/21 – 04/02/21

I. Executive Summary

Raul’s bias score 3.50, medium bull*. Choppy, sideways action into quarter-end, perhaps with a slight upward bias. Then look for non-farm payroll data Friday morning to provide direction into the weekend.

*Extreme Rose Colored Sunglasses (e[RCS]) bullish bias triggered. See Section IV.

II. RECAP OF THE ACTION

Conviction buying Monday. Seller control Tuesday through Thursday morning. Sharp excess low formed Thursday then a rally into the weekend which was accentuated by a late Friday ramp.

The last week performance of each major index is shown below:

Rotational Report:

Strong rotations across the board, except for key Discretionary sector. Slightly unsettling leadership from Staples and Utilities.

neutral

For the week, the performance of each sector can be seen below:

Concentrated Money Flows:

Don’t forget the major buy flows three weeks back. We have not seen any follow through on them yet, nor have we seen any selling of a magnitude that would expect us to doubt upside follow through.

Two weeks ago most of the selling was seen in energy industry groups which we’ve already established trade independent of the overall market.

Last week’s flows did skew slightly bearish, but not quite enough to negate that massive buy flow three weeks ago.

Median return last week  was below -1.5% and volume delta over the last 30 days is negative.

What we need. And I will discuss this with The Fly, is a 1-week volume delta. That would help us make actionable use of the volume delta data Stocklabs has.

Money flows are neutral.

Here are this week’s results:

III. Stocklabs ACADEMY

Three month oversold signal lines up with e(RCS) into quarter-end

On Thursday, March 18 Stocklabs flagged oversold on the 3-month technical and hybrid signals. You may notice I never include any 3-month signals in the Weekly Strategy Session, but lately I’ve been giving it more consideration.

The 3-month has a decent probability of success into the second half of the cycle. Now we also have a 6-month Tech oversold cycle in play AND Indexmodel going extreme Rose Colored Sunglasses bullish bias.

These factors are stacking up to favor a bullish bias.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for sellers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Choppy, sideways action into quarter-end, perhaps with a slight upward bias. Then look for non-farm payroll data Friday morning to provide direction into the weekend.

Bias Book:

Here are the bias trades and price levels for this week:

Here are last week’s bias trade results:

Bias Book Performance [11/17/2014-Present]:

Semiconductors probe top of balance, Transports discovery up mode

Markets fluctuate between two states—balance and discovery.  Discovery is an explosive directional move and can last for months.  In theory, the longer the compression leading up to a break, the more order flow energy to push the discovery phase.

We are monitoring two instruments, the Nasdaq Transportation Index and the PHLX Semiconductor Index.

Transports steadily discovering new higher prices.

See below:

Semiconductors have that head-and-shoulders pattern printed and it is so obvious it likely won’t play out how technical analysts expect. However, we are nearing the top-side of our range. How we behave up here will tell a story heading into Q2.

See below:

V. INDEX MODEL

Bias model is flagging extreme Rose Colored Sunglasses after being neutral for three weeks after signaling Bunker Buster four weeks ago and being neutral for the thirteen weeks prior to that. E(RCS) calls for a sideways drift, perhaps with a slight upward bias.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“We buy things we don’tt need, with money we don’t have, to impress people we don’t like.” Chuck Palahniuk, Fight Club

Trade simple, clarify your reason for getting’ money

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