Where We’re Going We Don’t Need Roads

Would you believe me if I told you I am tired of seeing charts? For eons, they were my babies, I’d nurture them and decorate them with macaroni strings and stripes and the latest in apparel [indicators]. Now anything beyond a glance summons a dread so deep it cuts right down to existence.

Nevertheless they are my friends and I put them to the test day in-and-out (no burger).

I like copper here. Ask a Pelican about how I mismanaged my copper position earlier this year if you want a rousing tale of mediocrity. On these walls I decree it shant happen a second time. I’m giving myself room and pressing my heels into the walls of logic.

Anyone who studies philosophy long enough will fall entirely in love with mathematics, for they present immortal truths one can only achieve with their minds.

Beyond copper I am certain the market is about to plunge us into a brown bag. You can either fill said bag with a forty ounce of ice cold malt liquor or lay plans to trade your way out of it.

All starting with tonight, with tonight’s sit and watch the Japanese GDP party.

PS – How TF am I supposed to sell HABT?  Look at this chart lol

You’ve expressed interest in how I go about the morning–mornings are sacred. They’re a time before distraction. Elder Raul always said the best thoughts came before sunrise, before everyone else thinks them, I agree.

It’s a time to nurture the soul. I rarely rise particularly early but I am awake and taking in the sunrise from bed and listening to the birds. Next I water myself and the plants—the tomatoes, the grapes, the onions, the flowers, the rhubarb, and lots of hearty greens.

Then a shower followed with applying exotic oils like argon, rosehip, and meadowfoam seed. This makes me feel like an ancient Egyptian. A hearty breakfast is prepared—if often must sustain me through a good part of the day. I practice temperance at all times but nevertheless seek to consume 30 grams of protein and lots of dark leafy greens.

Then I queue up the markets. In special instances, like this morning, I will start trading before the open but usually my activity is RTH. Since my trading is mostly during RTH it’s rare I will check a quote on anything outside of these hours.

Then I report for duty, here at the top echelon of finance greatness.

So many forces are converging today and it has me on edge. Facebook will complete its 10 day oversold cycle today. It’s flawless record of 9-0 has extended to 10 wins. If Exodus had emotion it would be feeling like Mayweather right now. Instead it diligently continues its job without the need to nurture its mind or body.  You may feel like you’ve developed an understanding of Exodus‘s substance, but it is quite likely you’ve only scratched the surface.  It will be many centuries before man can truly grasp the form, of greatness, of the virtues of robotics.

Exodus insisted we short gold. Had you, you’re into the meat of that cycle now. Congratulations on your objectivity. The Chinese Burritos have been granted impunity to broad market softness for the time being.

Nasdaq Transports (TRAN.X) are reversing lower, the Nasdaq Semiconductor Index (SOX.X) is trying to pull a bugger of a bracket high reversal, the Dow looks chill, and every other index is diverging away from the Nasdaq weakness intraday.

Rose colored sunglasses, my proprietary timing model, signaled the short over the weekend.

The USD/JPY spot price have converged to an apex and then pushed higher, initially, but with Japanese GDP on the horizon for this evening it’s hard to commit to.

Then just for the hell of it we have FOMC minutes tomorrow afternoon.

Now is a good time to have some cash.  Keep it until we see some resolution, then hope you don’t have to chase ridiculously higher prices in momo.

Nasdaq futures are up a touch as we head into Tuesday. Range and volume are normal and per the structure of the market profile we can classify the current action. It is a temporary phenomenon known as a short squeeze where price moves higher as shorts are forced to liquidate their positions. Once they are done doing so, the profile takes on a P-shape.

In the context of a downtrend this structure tends to occur at-or-near inflection points. In our current context, choppy range, it may also mean something. However, the higher time frame is up so it ‘s difficult to assign it too much weight initially.

At 8:30am we had upbeats stats on housing stats which slowly introduced sellers into the index. It will be interesting to see if sellers keep us south of 4521.50 heading into cash open.

Yesterday we formed a double distribution trend day and pushed higher to close the 4/28 gap up at 4515.50 before stalling out. Value managed to shift up near session high just before the day wrapped up. This suggests value, not just price, were on the move higher.

As I wrap up my post the short squeeze profile is deteriorating as sellers work into the tape.

Heading into today, my primary hypothesis is sellers push into the overnight inventory to close the overnight gap down to 4507.25. From here to 4504.50 I will look for signs of responsive buying. If buyers no show, then I will look for a continued move down to 4491.50.

Hypo 2 is buyers push off the open and reclaim 4521.50 early and sustain trade above it setting up another leg up to target 4531.25 then 4535.25. Look for responsive sellers up near 4539.

Hypo 3 buyers push, stall around 4521 and we reverse lower to fill overnight gap 4507.25 and then two way chop ensues.

Levels:

I am majorly conflicted here. Today looks majestic. Just look at RGSE, an explosion of bear bits to the tune of sixteen hundred percent. The Nasdsaq spent a few hours trending, tranny’s are back on the streets, semi’s are semi-erect, and it’s a scorching 90 degrees in the murder mitten.

The open was so pretty I had to write a blog about it.

But then there’s my model, a tepid friend who without judgment nudges me in the ribcage and says, “Hey…sell.” So I am reminded to be unselfish here. If I catch wind of a stink, even a subtle note of feces carried across my nostril by a breeze, I will book some longs here.

THE Weekly Strategy Session, the lot of yous were too busy working on your dad bods to check into it. It’s telling a story different than what price action is. One of them is wrong. I am keeping an open mind whist being long of stocks. Keep in mind my ideas are forged on the same equipment used to enrich uranium and navigate the orbital space cannon (OSC). It would not surprise to me to see them granted immunity from a broad market selloff. Nevertheless, nothing is sacred in love and war. I had to squeeze one more cliché in, just in case you didn’t cringe yet.

GO LIFT OR PUNCH SOMETHING.

Bulls have to be careful. Every time they’ve launched an aggressive campaign early Monday morning they’ve been lashed by Tuesday and whacked with bamboo sticks by Wednesday.

This open so far is just right. Not too hot, not too cold. The slower, the better, IMO.

Nasdaq futures are price to open gap down to start the week. The last two Monday’s have stated gap up and pushed strength early only to reverse. Thus this week represents a fresh look to the markets. Volume and range are both normal on the globex session and overall market profile structure is ugly.

On the economic calendar we have NAHB Housing Market Index at 10am and an otherwise open schedule.

Friday we consolidated inside the upper quadrant of Thursday’s trend day. The session started strong, exceeding Thursday’s high and affirming the risk free nature of the trend day. However the session was a slow grind lower with no clear emerge of bulls.

Heading into today, my primary expectation is for buyers to work into the overnight inventory. Look for a push up to 4489.25 to close the overnight gap. If they can continue to exceed overnight high 4493.75 then look for a run to the 4500 century figure.

Hypo 2 is sellers push off the open and test below overnight low 4470.50. Look for buyers to defend 4458.50 and two way trade to ensue which might close the overnight gap up to 4489 but will stall ahead of 4493.75.

Hypo 3 is a push down through 4458.50 to target the composite HVN at 44550.

Hypo 4 we aggressive press higher, take out Friday’s high 4506.75 and target the gap up at 4515.50.

Levels:

Try as I might to compress everything that is setting up heading into this week, the Weekly Strategy Session still ended up being one of the longest ones yet.

There’s a ton of information both contextual and actionable that needs to be on your radar heading into the tail-end of May. Something I learned these last few years about the old saying, “Sell in May, go away.” is that often times it means to sell IN May aka during May.

There’s been a recurring behavior of strong Monday morning fizzled into weakness. Then each week bulls dig in and close out the week well. Last week they even threw in a conviction trend day. Boy do they need to defend it.

Otherwise it’s back through the range we go, full horror show.

There’s all sorts of subtle clues to which way we head this week and an exciting mid-week kicker, so why not pony up less then you paid for a shot of Patron last night to prepare yourself for the upcoming week?

TAKE A LOOK INSIDE THE Weekly Strategy Session.

EXODUS members – Can you believe The Fly gave me keys to the Exodus blog? Check out my piece in there. It’s on the art of turning dials and fiddling with knobs to hone into harmonic wins.

You can’t sit still and you certainly can’t lament if you hope to stand a chance in the competitive world of business. There will be challenges that smack you with impression, do not be blown off your feet by the wave. Instead take a step back and objectively observe it. What is this? What is its character?

Momentum is important. If you have any, even briefly, use it to your fullest advantage. Press it until nature insists otherwise.

Celebrate the victories, and the losses, taking solstice in your objectivity and execution.

Most things are beyond your control. Will yourself into accepting external events and channel your energy toward that which you are the master, your thoughts, and sometimes you can shape the republic.

Today was a catatonic version of hypo 2 which is how the day after trend days typically play out—in the upper quad. It did not produce fireworks, it appears those will be saved for later in the summertime.

I’m constructive in these conditions. It would take a Texas sized hole opening up, spilling millions of Zenu’s caged demons upon to earth.

I’d like to say I’m off to guzzle down a cocktail of drugs procured from GNC to aid in my quest to squeeze barbells into pancakes. BUT I’M NOT, DAMMIT. I have other more pressing matters to attend to.

Have a good juan

Nasdaq futures spent the overnight session slowly drifting higher and did so on normal range and volume. One structural element currently stands out on the session, a weak high, seen clearly on the market profile as a double TPO print and an overall lopsided bell structure.

Today is the most action packed day of the week from an economic announcement standpoint. At 9:15am Industrial Production data is out followed by The May Preliminary reading of the U of Michigan Confidence number. The preliminary reading has recently been a successful number in generating a reaction from the market. Energy traders will be watching the Baker Hughes Rig Count at 1pm and at the close we have Net Long-Term Tic Flows.

Yesterday price opened pro gap up, above the prior day’s range and had an open auction that we briefly tested below before the market went one time frame up. The result was a trend day print. Market profile theory states any entry in the direction of a trend is a risk free entry into the following session. Therefore, expectation is for price to exceed the trend day high by at least a tick.

Heading into today, my primary expectation is for sellers to push into the overnight inventory. I expect some choppiness before 10am’s data. Look for buyers to defend north of 4493 and then work to take out the weak overnight high at 4507.50 to target 4517.25 before two-way trade ensues.

Hypo 2 we push down into the upper quad of yesterday’s trend day, taking out overnight low 4488 and looking for responsive buyers ahead of 4480 and two way trade ensues.

Hypo 3, gap and go higher, take out 4517.25 early and sustain trade above 4520, setting up a secondary leg up to 4538.75.

Levels:

It isn’t often you can use the Dow Jones Industrial Average as your tell. Then again what’s in a tell anyhow? It needs to be actionable, that makes it valuable.

Like Exodus insisting Facebook was a buy at $78 at giving lots of cold dead data points as evidence.

But let’s segue into auction theory, try not to leap from your seat in excitement. Today is a trend day on the Nasdaqs and as long as we close upper quad it has confirmation. You can tell it’s a trend day because it left behind several bell curves on the volume profile, thoroughly auctioning each price on the way up, bringing value with it. The theory states that any entry during a trend day is a “risk free” entry into the following session, meaning, that odds are high we exceed today’s session high (if only by a tick) in the following session.

That might not mean much to you, but in the parlance of tomorrow being god forsaken option expiration day, I do say, quite boldly, it is reason to believe I will indeed see fireworks tomorrow.

Like forty dollar moves in Priceline and other high ticket stocks.

I intend to see the river card, pants down, middle finger up, sitting atop two cases of Coors light high speed bullet cans.