WHAT’S HAPPENING?!

The crooked Europeans scoffed as the lazy Americans took a late-spring Monday off from trading. They meddled about their decaying cityscapes planning a “Tuesday surprise” for the relaxed Yankees.

So we were greeted with some news, a meeting was canceled, so what? I had two meetings cancel on me today—business as usual. But someone decided it was high time they liquidate their stocks and they didn’t care what price they got. They.just.sold.

Then they stopped, but in their void nobody has shown much eagerness to BTMFD. Buy the dip mates, this I know, for the Fed team tells me so. Bears to crush and clean and sew, they are weak but we are strong.

It is like I know I am supposed to be buyer of dips and a seller of rips, but instead I just sit here eating a taco…

I like BABY and PGR on the slow tip, and I’m managing a jumbo in DUST, slowly, thanks to the almighty Exodus.

A little heat never killed anyone…right?

Nasdaq futures are lower ahead of the start to a holiday shortened week. The session featured big rotations both up and down, and volume is running just a touch above first sigma while range remained compressed into normal territory.

The economic calendar is chock-full of events to wade through today. At 8:30am Durable Goods Orders came in-line with expectations with orders for Capital Equipment climbing for a second month. The initial reaction to the data is selling. Also on the docket today we have House Price Index at 9am, Markit Composite PMI at 9:45am, and New Home Sales and Consumer Confidence at 10am. Also this evening the minutes from the Bank of Japan’s April 30^th meeting will be released.

If I had the software capabilities to do it, I would completely remove Monday’s trading action from my charts. I am skeptical to give any weight to trade data that occurred while the underlying components were closed. Conversely, on my Market Profile chart (the letters and turquoise shaded volume distribution) I prefer to see all activity on the Nasdaq futures.

We formed a large distribution last week (and during the holiday) just below our contract-high session back on April 27^th. Instead of making new highs, the distribution formed and then we headed lower. Meanwhile, on a slightly higher time frame, we are coming into balance. This can be seen as several sessions of overlapping price action. Overall it seems the market is accepting higher prices and forming value.

Heading into today, my primary expectation is for choppy action. With the busy economic schedule and the holiday rebalancing needed, fits and starts with little accomplished seems likely. I will look for buyers to push into the overnight inventory and take out the overnight high 4528.25. I will look for signs of sellers up around 4530 who work us back lower. The I will look for the remainder of the session to back-and-fill around 4520.50.

Hypo 2 sellers push the lower early on, taking out 4503.25. Look for buyers around 4496.25 then two way trade to set in around the MCVPOC at 4504.

Hypo 3 sellers push down through the volume pocket at 4496.25 to test down to 4489.50 where buyers come in and we back-and-fill around 4496.25.

Hypo 4 buyers push up through 4536 and sustain trade above it, setting up a run to new highs.

Level:

The iBankCoin launch of Exodus has been a biblical success.  The stock gods are pleased with iBankCoin’s mission to usurp the largest financial powerhouses in the world.  They see institutional-grade tools priced for every man and they beam with approval.

However, some members need to be brought up to speed.  After all, we’’re tapping into the sublime harmony of mathematical precision (S.H.O.M.P.) here.  Thus, the Exodus Strategy Session is born.  It will serve to educate the distinguished member class on the functionality of Exodus while providing actionable ideas and insight.

Here’s a public look at the first edition where we cover how to build baskets and import them into the screener, enjoy:

I. INDEX RECAP

Equities started out flat Monday before buyers came in and worked price higher.  We spent the rest of the week trading essentially flat.  The Nasdaq saw a slight drift higher while the other indices were flat-to-slightly-lower.

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

II: SECTOR RECAP

There are several sectors to our economy.  Underneath the surface of fluctuating index prices, capital is allocated among the sectors. This behavior provides insight into the risk tolerance of market participants. This section of the strategy session is devoted to analyzing this behavior.

The healthcare and utilities sectors turned in the best performance on the week, but overall it was a quiet week across the board.  We can see the median return on all sectors was just a touch above positive at 0.04%.

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

Two of the sectors are flagging oversold at the moment—Consumer Staples flagged oversold Friday on its 12 month algo, and Healthcare flagged oversold Friday on its 6 month algo.

III: INDUSTRY RECAP

Industries who had stand out performance last week are listed below:

I also use my Industry OBOS Scanner to look for industry concentrations.  If I see a particular industry with several stocks either overbought or oversold, that interests me.

Industries showing oversold concentrations are Property & Casualty Insurance, Electric Utilities, and REITs.  The most compelling industry hybrid charts can be seen in the various REIT industries.

Industries showing overbought concentrations are Chinese Burritos and Application Software.  Neither of these hybrid charts are currently up at the extreme of their historical oscillations.

IV: UTILIZING Exodus

Each week the Exodus Strategy Session will demonstrate one of the many powerful features available to members and explain how best to utilize it.  This week we will cover building a basket of stocks and importing it into the screener.

Baskets are a great way to focus on a specific group of stocks or ETFs.  You can build a list of stocks you are watching or your current positions.  You could also group stocks together under a theme like surveillance or stem-cell research.  There are countless reasons to build a basket and Exodus has a suite of features for gaining insight into your basket.

To create a basket, click your username in the top right corner:

This page will display your user profile and below it you will see a blue button that says, “Create New Basket”.  Click the button to create a basket.  Any previous baskets you’ve made will be displayed below.  For our example I created a very basic SectorETF basket.

Once I have created a basket, there are several ways to add a security to it.  Anywhere stocks are listed, whether it’s the grid, or in the screener, or the ETFs page—literally anywhere—you can click the little grey plus sign next to the ticker to add it to your basket, see below:

Alternatively, you can click the “Watchlist” link on any individual instrument’s top link area.  See below:

Once you’ve created a basket it will display lots of useful information.  You can sort any of the columns by clicking the small up/down arrows to the right of the column header.  You can also adjust the % return duration by clicking the funnel icon, see below:

Now we can import the list into the Exodus screener to start adding in layers of automated analysis.  On the Advanced Screener page, simply scroll down the list of screener categories until you reach the bottom.  Here you will find a category titled, “Watchlists” see below:

The last step is to click the funnel next to Watchlist in your screen to choose the Basket you wish to import into the screener.  Now you can add all the other powerful functions of Exodus onto your basket, see below:

V: LONG TRADING IDEAS

I like the idea of adding a REIT to my long term portfolio here, given the concentrations noted above in Section III.  I like REG, especially if it takes out Friday’s high $65.16.

Similar idea with PGR, it is a long term idea. Oversold as of Friday with nice stats that would carry it to 52-week high if they repeat.  Also it has a nice compression of price all year so far.

On the oversold status of the Healthcare sector, I like PCRX, HIIQ, and KPTI for trades (tight risk).  I also like BABY, ideally fade an attempted move below $36.

From the oversold status of Consumer Staples KRFT looks interesting.

Weekly Strategy Session Members: Look for this week’s strategy session to hit your inbox tomorrow due to the holiday.  Thanks!

Well happy Memorial Weekend so far lads! Hopefully it’s treating you well and you’re miles away from your computers, enjoying the finest nearby nature exhibit. But if you’re not and instead scouring the internet in a campaign to strengthen your grip of the markets, then feast your eyes on the developing value area in the Nasdaq:

I’ll be monitoring if/how we settle into this envisioned value area in the upcoming week, seeing if the dog is going to bark.

Have you no clue what I mean about barking dogs? They reside in Haight-Ashbury and wear rose colored sunglasses. In the Weekly Strategy Session we’ll go over this signal and highlight the actionable levels.

Everybody wants winning trades, but nobody wants to do the heavy research and training. Because you don’t want to screw up and look like a dude. The last thing you want to do is approach the king of all finance sites, looking like a fucking present.

This is where I come in. I am going to step inside your ring and fuck you up with knowledge. First step is whipping you dick out and asking the world if it wants to suck it—in other words, log into Exodus and see if the market is oversold.

PRO TIP – always check with Exodus before making a trade. Trading alone is like trying to pick up ladies sober. You do not have the confidence for this. You’re not going to pull any tail, and you’re not going to pull any wins. The only thing you’re going to pull is the rip cord, and go home.

These three scoops of preworkout are kicking in. I’m off to GNC to buy some MOAR preworkout then to smash heavy weights through the floor.

Shoot an email to [email protected] if you want a 3 day trial of Exodus.

The overnight session was fairly quiet up until CPI data at 8:30am which pushed some sellers onto the tape. Overall the session is normal in range and volume and trading in the upper quad of yesterday’s session.

On deck this afternoon we have Fed Chair Yellen speaking at 1pm. We have the Baker Hughes Rig Count data out at the same time.

Yesterday we printed a short squeeze-type profile, P-shaped. Sustained trade below overnight low 4523 is what sellers want to see to take back the session.

Heading into today, my primary expectation is for buyers to work higher to test overnight high 4535.50 and take it out to target the NVPOC at 4543.50.

Hypo 2 sellers sustain below 4523 setting up a washout lower to 4500.

Levels:

Nasdaq futures are trading a touch lower as we head into cash open. The overnight session was normal in terms of range but volume is borderline abnormal. On the economic calendar we have a flurry of low/medium impact events to push through this morning. At 8:30am Chicago Fed National Activity Index and Initial/Continuing Jobless Claims data was out and saw little reaction from the market.

Late on this morning we have Markit Manufacturing PMI at 9:45am, a data dump including Existing Home Sales, Leading Indicators, and Philadelphia Fed at 10am, and Natural Gas storage stats at 10:30am.

Yesterday we printed a curious-looking normal variation day. Price managed to push up to new weekly high before sellers knocked it back flat into the close. The last four sessions have compressed price into a range—the first real contraction in volatility we’ve seen in several weeks.

The action has made the market profile chart a bit odd, so I drew a micro composite volume profile of the last 4 sessions to see better what’s going on here (green and red distribution pictured below).

Heading into today, my primary expectation is for a choppy 2-way open until we push through all the morning data. Look for price to stay contained between 4481.25 to 4504. Then look for buyers to come in and work price higher.

Hypo 2 sellers push down through 4479.25 to open up a liquidation down to 4458.75.

Hypo 3 buyers make a run for yesterday’s session high 4534 to target 4539.

Levels:

After an impressive showing both up and down we’re back where we started when they rang the opening bell. ‘Bring Forth The Siesta’ was written when visions of this mediocrity flowed through my mind. We knew today would essentially be a wash—and a dangerous one at that.

Third reaction analysis, my go to distraction during important economic announcements, yielded a buy signal and buy they did, up onto the point where they found highly motivated sellers.

Yesterday’s picks fared well today likely because they’re fueled with thick data sets and positioned to deliver career-ending blows to the opposition, ala Option Addict’s deliverance of MOMO shorts today (hat tip).

The standoff continues as far as I can see, but I could not resist putting on a lotto long after 3^rd reaction. I’d tell you what it is, but it’s either too late to take action or wrong.

All we need to do is sort out these trannies and the market can rally.

Airlines are being burned up today amid increases in capacity or some other rabble I couldn’t care less about. I actually love when people discuss the whys behind a move, but I rarely over think them.

What I do instead is go to charts I’ve been closely watching. In this instance, I pull up the Nasdaq Transport Index. I can see the dark cloud that formed yesterday was a proper warning, but now I am thinking buy the dip.

We came in hot, but this is bracket low. Buyers have defended this region every time we’ve visited it. You, rather markets, have to convince me this time is different.   If not, back through the grind haus we go:

I was blessed with foresight and sold my $VA position for a small loss yesterday. It was a bit of luck and a bit of overall caution on my part.

Nasdaq futures are set to open a touch higher for Wednesday after trading a balanced session overnight on low-end normal range and volume. The GDP data out overnight from Japan turned out to be not much of an event and the US dollar strength held overnight.

Today we had MBA Mortgage Apps at 7am. Coming up we have the weekly Crude/Distillate report at 10:30am and the collective attention of traders will at some point be focused on the Fed Minutes due out at 2pm.

Yesterday we printed a normal variation down day. Buyers defended Monday’s mid around the close when a late wave of selling came through.

Heading into today, I expect any early excitement to quickly fizzle and the markets to go into chop mode ahead of the afternoon minutes. Look for buyers to make a push up through overnight high 4510.50. Look for responsive sellers to defend near 4515 and two way chop to ensue with 4498 as a floor.

Hypo 2 sellers push off the open, close the overnight gap to 4501 and continue lower to take out overnight low 4496.75 and push below yesterday’s low. Look for buyers at 4491.50 and two-way trade.

Hypo 3 strong buying up through 4515 to target 4531.25.

Levels: