iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,957 Blog Posts

NASDAQ up a quick +60 into final Monday in June // here is trading plan

NASDAQ futures are heading into the final three days of June gap up after an overnight session featuring elevated range and volume. price was balanced overnight, balancing while steadily ascending up through last Friday’s range. As we approach cash open price is hovering up near last Friday’s high.

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

Last week featured a week-long rally that kicked off early Monday with a strong conviction buying drive shortly after opening bell. The Russell 2000 lead the way suggesting risk tolerance remains elevated. The last week performance of each major index is shown below:

On Friday the NASDAQ printed a normal day which is anything but normal, occurring a bit less than 20% of the time. Normal days typically feature a dynamic first hour of trade which sets a wide range, allowing the rest of the session’s range to be contained within initial balance. It suggest the higher time frame is not active. The day began with a gap up in range, just above the Thursday midpoint. After an open two-way auction sellers stepped in and drove down into the gap fill then briefly exceeded the Thursday low before a sharp excess low formed. Price then bounced back up to the Thursday midpoint, sellers defended, and we spent the rest of the day chopping below the daily mid but never going range extension down.

Heading into today my primary expectation is for buyers to gap-and-go higher, tagging 14,400 before two way trade ensues.

Hypo 2 stronger buyers probe beyond all-time high 14,422 before two way trade ensues.

Hypo 3 sellers work into the overnight inventory and close the gap down to 14,324. Look for buyers down at 14,300 and for two way trade to ensue.

Levels:

Volume profiles, gaps and measured moves:

Comments »

Carrying water

June is nearly complete. For the most part, it was RAUL’s month. Fate had interesting plans — I was made to cope with many a challenge in what would become a contemplative period filled with obstacles between your dear humble raul and all these planned goals. We took them as they came though, and given the circumstances I am grateful that the foundation stones I’ve build my entire compound upon remained an unshakable foothold on this derelict path to freedom.

Yes I work too hardt sometimes but you know what? I have been liberated from the monotony and mediocrity of generic american existence. I am doing my best.  I’ve sacrificed the amount of attention I give the markets and it shows (fair enough) but now I am dialing back in.

Weekend research has been filed, and I intend to resume morning reports come Monday. The quarter is ending and I need to be back in ship speculative shape come Q3.

Mentally and eventually physically.

Okay for now. Enjoy this week’s report.

Raul Santos, June 27th 2021


Stocklabs Strategy Session: 06/28/21 – 07/02/21

I. Executive Summary

Raul’s bias score 3.55, medium bull.  Sideways drift with slight upward bias into the holiday weekend.

II. RECAP OF THE ACTION

Strong buyers early Monday reversed the tape and set up a week-long rally.

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

Rotational Report:

Full on rotation back into the equity complex. Leadership in mostly the right places. Energy on its own planet.

bullish

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

Concentrated Money Flows:

Money flows skewed heavily to the positive side of the ledger, negating last week’s bearish reading.

Volume delta might be broken or just be a strange lagging indicator. It is back to being pinned negative.  Median return was about +330 basis points.

bullish

Here are this week’s results:

III. Stocklabs ACADEMY

Distracted but dialing back in

One of the greatest values about Stocklabs is its ability to keep us up to speed when we’re unable to give our full attention to the markets or at least the amount of attention we prefer to give markets. The thing is, it is only useful if we properly interperate the data.

We had a good oversold reading heading into last week yet my forecast was bearish. My bearish leaning was due to giving too much weight to the negative money flows we saw last week.

In hindsight this was an error. The oversold signal presses right up into the Fourth of July holiday. That is bullish.

I have been distracted outside of the market lately but plan to dial back into the morning reports this week.

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:

Sideways drift with slight upward bias into the holiday 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]:

Will range hold or do we rally?

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 found a bid near the low-end of range and appear to be holding balance.

See below:

Semiconductors managed to bounce off that ‘eroding support’ last week and now they are near the top of their double range. I expect this level to hold as a ceiling but if not the continued semiconductor rally is likely to carry the whole stock market along with it.

See below:

V. INDEX MODEL

Bias model is back to extreme rose colored sunglasses bullish after being neutral last week after being extreme Rose Colored Sunglasses bullish bias for three consecutive weeks after being neutral for the two weeks prior after being e[RCS] bullish seven weeks back and RCS bearish eight weeks prior.

We had a Bunker Buster seventeen weeks ago.

Extreme Rose Colored Sunglasses calls for a calm drift perhaps with a slight upward bias.

Here is the current spread:

VI. Stocklabs Hybrid Oversold (6-month)

On Thursday, June 17th Stocklabs went hybrid oversold on the six month algo. This bullish cycle runs through July 1st end of day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“Every new beginning comes from some other beginning’s end.” – Seneca

Trade simple, one trade at a time

Comments »

Setting up for macro fireworks

First off Happy Father’s Day lads. Father’s day is less important than Mother’s Day and if you deny this statement then you’re heading down a slippery path to being cuckold by Humble Raul. Dad’s don’t need to be celebrated. Is everyone okay? GREAT. Leave me be. I am content. Mother’s need frills. A sense of being special. We create that magic for them so everyone can be okay and we can be left alone.

Moving on. Quick programming note.

I wish I could be more active but there is a generational land grab opportunity happening in the birthplace of the assembly line. I have put aside my fitness and intellectual work to dedicate my powers to accumulating as much of this rare earth as possible. It was locked up for years-and-years after the heckin’ chinese and australians swooped in during The Great Recession and picked up Detroit lots by the dozen only to let them rot, and blight.  The city set up a land bank and suddenly nothing was available. But all the sudden it is becoming available again and the patient hoop jumper can squire urban acreage for a real nice rate.

This humble hoop jumper then has to develop the land enough to satisfy the city to hand over the deed and I am doing all of this in a very boot strapped manner because I have an immigrant mentality.

Americans will never understand what it is like to live on an island or worse, Europe, where every inch of earth has been owned for a thousand years. Immigrants come to america and they realize all this land is available and they set out to take it and make it productive.

That said I miss trading these futures dearly. Active trade moved to the September contract on Friday and I am feeling the urge to sit back down and dial back into the tape. It will not happen this week.

When I do dial back in I will do my best to be present in the Pelican Room more. I have a hard time with trading chat rooms because my a.d.d. But I will pop in after I hustle the opening bell when I can.

NOW MOVING ON TO CURRENT MARKETS.

Sunday research leads me to believe we will see some follow-thru on last week’s selling. Whether it finds buyers down below or whether I am totally wrong and we rally all week, we don’t know. What I do know is all my toiling has loosened up some capital that I need to deploy in the markets and I need to deploy it before we’re too deep into Q3.

I will not buy more doge.

I will not buy more doge.

I will not buy more doge.

Maybe I will, fuck.

I will not buy more doge.

While the 200k doge I hold in reserve has plummeted in value, the total amount of doge I own has increased thanks to that nice feller Sam allowing me to lend my doge out on his brokerage platform. I am earning doge even now as I type. Crypto is so fucked. It has this way of consuming the speculative mind.

Why the hell would I buy more doge when I could by more TWTR?

We don’t know. But I might.

I will not buy more doge.

I might buy more doge.

Shit man.

I need to dial back into the morning reports. Those keep me centered. And I need to get back in the gym and start my ressitance training back up. I am turning into a wet noodle of sorts. Toiling on the smasher and the shovel all day but my core is turning pudding soft.

That’s the last thing I need with you ruthless fuckers vying for my seat.

For now. Ciao. And remember—June is Raul’s month.

Raul Santos, June 20th 2021

And now the 343rd edition of Strategy Session. Enjoy.


Stocklabs Strategy Session: 06/21/21 – 06/25/21

I. Executive Summary

Raul’s bias score 2.45, medium bear.  Expect continued selling during the week.

II. RECAP OF THE ACTION

Late Monday rally then selling pressure all week which accelerated Wednesday afternoon after the FOMC announcement. NASDAQ bullish divergent throughout the week.

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

Rotational Report:

Rotations away from the equity complex, across the board.

Bearish

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

Concentrated Money Flows:

Money flows skewed heavily to the negative side of the ledger.

Volume delta might be broken or just be a strange lagging indicator. It printed a slightly negative reading after being really negative for months.  Median return was about -400 basis points.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

No man’s land

Markets are sort of in a strange purgatory for the next few weeks. It is not quite the third quarter but active futures traders have rolled forward to the September contracts.

No major earnings are due out from any important outfits.

The Fed turned a bit hawkish and can only add benign layers of context to it for a while.

It is nearly the summer solstice but not quite. Mercury is in retrograde but who know what that means? It ends Tuesday.

The NASDAQ is still pinned right around where it was back when the White House announced their intention to tweak capital gains tax code.

Contextually there is no clear catalyst for the markets. Focus on semiconductors.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Expect continued selling during 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]:

Testing range

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 are nearing what appears to be the bottom of a well-established range. Will it hold or go into a discovery down phase. This could tell a story next week.

See below:

Semiconductors have been eroding the nearby support level by repeatedly bouncing along it. We could be setting up to traverse down to the low-end of range.

See below:

V. INDEX MODEL

Bias model is neutral after being extreme Rose Colored Sunglasses bullish bias for three consecutive weeks after being neutral for the two weeks prior after being e[RCS] bullish six weeks back and RCS bearish seven weeks prior.

We had a Bunker Buster sixteen weeks ago.

Being extreme RCS essentially for five weeks in a row is what preceded this selling. Interesting…

And going into next week there is no bias.

Here is the current spread:

VI. Stocklabs Hybrid Oversold (6-month)

On Thursday, June 17th Stocklabs went hybrid oversold on the six month algo. This bullish cycle runs through July 1st end of day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“It’s a beautiful day, the sun is shining, I feel good, and no one’s gonna stop me now.” Freddy Mercury

Trade simple, one trade at a time

Comments »

Chopping wood

Fellas I had to step away from the markets last week and it looks like I won’t be on my desk much this upcoming week either. A deal I have been putting together since November finally went through. I wasn’t even sure if it would but baby it did.

I bought a quarter of a block down in the city. Nearly an acre. Enough space to build eight multi-family homes.

Housing, as we know, is in short supply.

Anyhow I couldn’t care less if there are enough houses for the consumer, man. I have Mothership, my faithful steed. This land will be developed, at first rapidly to cut down on some of the maintenance, and then slowly.

Perhaps one day I will build a few homes, but not homes as the typical hamburger eating american envisions.  The city is no place for an offensively middle class 3,500 square foot joke house with cheap cladding. They’ll be gritty and utilitarian shelters. Made of steel and cement. Fully equipped to survive the roving bandits.

But for now I am working the land. Establishing the perimeter. I am not being aggressive. Just dominant.

Folks aren’t used to seeing the immigrant hustle up close. Usually we’re relegated to distant fields where we can rage work in peace. I am rage working on a busy corner in the city and it already has people shook.

So I need to make it pretty ASAP because I know they’re gonna send bandits for me eventually and I need to make sure the power of my words is backed by a beautiful show of infrastructural force.

Trade’em well lads. What I love about the stock market is it was here long before us and will be here long after we’re gone. Investing and trading are a few of the last true bastions of lassie fare capitalism. We ought to be more grateful to the French. And the Dutch.

As for the Italians those fuckers are ruthless. Keep a wide space between you and them. If you see some leaned out farmer looking dude with a pony tail all olive skineed and bearded, working the land…say hello or run because that’s humble Raul and he’s thinking of a dozen ways to make to kill you.

Raul Santos, June 13th 2021

Here is 342nd edition of Strategy Session. Enjoy now yes.


Stocklabs Strategy Session: 06/14/21 – 06/18/21

Executive Summary

Raul’s bias score 3.35, medium bull*.  More sideways chop until Wednesday afternoon. Then look for the third reaction to the FOMC announcement/presser to dictate direction into the second half of the week.

*Index Model signaled extreme Rose Colored Sunglasses bullish bias, see Section V.

II. RECAP OF THE ACTION

Steady rally in the NASDAQ all week while the other indices marked time. The Dow was bearish divergent.

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

Rotational Report:

Tech strong and discretionary strong. Rallying in the right places.

slightly bullish

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

Concentrated Money Flows:

Money flows skewed bullish for a second week and for a second week not really great industry groups leading the way.

Volume delta remains pinned negative (broken I think) and median return was about +50 basis points.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Slow tape

Despite being a slow tape the opening bells are still setting up nicely. I had to step back from the market last week because I’ve just been too dang good heckin’ busy. It looks like I will not be on my desk much next week either. Which is fine. The market will be here when I get back.

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:

More sideways chop until Wednesday afternoon. Then look for the third reaction to the FOMC announcement/presser to dictate 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]:

Marking time

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 same as last week. Holding range near highs.

The longer we sit in this time-based correction the more bullish it becomes.

See below:

Semiconductors balanced along the highs also. There is nothing bearish about this for now. Time-based corrections are very healthy.

See below:

V. INDEX MODEL

Bias model is extreme Rose Colored Sunglasses bullish bias for a third consecutive week after being neutral for the two weeks prior after being e[RCS] bullish five weeks back and RCS bearish six weeks prior.

We had a Bunker Buster fifteen weeks ago.

e[RCS] calls for a sideways drift, perhaps with a slight upward bias.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“If I do a good job, people won’t care if I am green or have three heads.” Harvey Milk

Trade simple, trade well

Comments »

Remember: June is RAUL month

Sort of already used up my best thoughts on this earlier entry. Just keep in mind that June is a month where humble RAUL works harder than you. Toils. Toils and takes risk. Aerodynamic. Thin. Lean. Peak male performance. Cock as hard as pig iron. Pony tail out. No cankles.

Hustling.

Maybe less here and more down in the hood we don’t know I just take it one day at a time.

Okay for now here is this week’s research.

Raul Santos, June 6th 2021


Stocklabs Strategy Session: 06/07/21 – 06/11/21

I. Executive Summary

Raul’s bias score 3.58, medium bull*.  Expect markets to continue holding balance along the highs. Moments of volatility to the upside or downside are likely to fade back to the mean by week’s end.

*Index Model signaled extreme Rose Colored Sunglasses bullish bias, see Section V.

II. RECAP OF THE ACTION

Closed Monday for Memorial Day. Gap up into the week is faded. Choppy through Wednesday then some selling pressure Thursday. Strong Friday, sort of drifting back up to weekly highs after the nonfarm payroll data.

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

Rotational Report:

Tech strong, flanked by other sector groups. Energy in its own world.

slightly bullish

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

Concentrated Money Flows:

Money flows skewed bullish but were mostly oil and REIT related. Negative side not really featuring any key industry groups.

Volume delta remains pinned negative (broken I think) and median return was about +75 basis points.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Summer trading

It can be easy to slip into old bad habits during a slow summer tape. Plan every single trade from entry to exit to stop and keep an eye on risk. Stick to the key levels, the key windows of trading activity and be okay with stepping back from trading if you need to refresh the mind.

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:

Expect markets to continue holding balance along the highs. Moments of volatility to the upside or downside are likely to fade back to the mean by week’s end.

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]:

Balance along the highs can set up another leg up

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 holding range like this along the highs is not bearish. Balance and innocent until we make a strong break lower.

Until then we expect balance. The longer we sit in this time-based correction the more bullish it becomes.

See below:

Semiconductors are also balanced. NVIDIA earnings were fantastic and the stock was well received after the report.  There is a clear balance/range here but also in the last two sessions we have set up and pivoted off the bear’s Fibonacci level. Buyers likely to attempt a new leg up but for now the call is balance.

See below:

V. INDEX MODEL

Bias model is extreme Rose Colored Sunglasses bullish bias for a second consecutive week after being neutral for the two weeks prior after being e[RCS] bullish four weeks back and RCS bearish five weeks prior.

We had a Bunker Buster fourteen weeks ago.

e[RCS] calls for a sideways drift, perhaps with a slight upward bias.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“All cruelty springs from weakness.” Lucius Annaeus Seneca

Trade simple, stay kind

Comments »

Love when a good plan comes together

Minimal noise. Raw data gets partitioned and analyzed. Factor in some calendar events.  And a ruthless commitment to brevity. That is what goes into the Executive Summary every Sunday. Last week’s was on point, see below:

Why do I do it? I do it for myself. Owning the research that backs every single decision I make in the speculative markets allows me to avoid unbridled pikerisms like foisting blame onto some billionaire if I blow up my account positioning into shit coin degeneracy.

I need to stay focused. It’s a real sick society. In the age of anxiety I intend to be a beacon on the path to simplicity and pleasure.

Long time readers of the humble Raul blog [hRb] know I’ve been calling for the ’20s to be a period of economic prosperity the likes of which no living human has ever seen. An expansion fueled by the persuit of automation and artificial intelligence. An expansion built on semiconductors and bravery. Grotesque displays of wealth. Traps. Other beacons to different kinds of life…and pleasure? Maybe.

I come from a life of privilege. I’ve had the privilege of being inside the grips of a parochial protestant education as a child, to a collegiate life surrounded by friends with private jets, hell their own airports, yachts — all the trimmings of perceived happiness/pleasure. And daddy-o these have been (for the most part) some of the most miserable folks.

They have the same problems.

Then there are festival freaks. Bless them. Escaping reality en masse and listening to good music. An okay path to nirvana. The duration is short. Not as short as nitros oxide…

…disassociatives, an escape from the human condition. Why do that? Come back with some non-human perspective maybe. We don’t know. Everyone has their kink.

And that’s okay. My kink is extracting as many fiat american dollars from the global financial complex as possible. We’ll do what it takes. Gain citizenship to other countries. Hustle the big waves of New York’s opening bell. Invest in strong leaders.

Said fiat will then be converted into real assets. This is becoming a challenge now too. Those dang Chinese have taken to speculating on physical goods at a ravenous clip. Fuck. This is fine. Said fiat will then be converted into steel and cement and fucking lumber to build massive food operations. Said food will be abundant and provide minerals and vitamins otherwise depleted in the food chain. Said food will be distributed to my people and others for exchange with the intention of converting the food into digital currencies.

And so goes the circle of life. No one’s master. No one’s slave. Except maybe the plants.

It all starts with solid Sunday research. That said. Stick around a bit. A fresh report will be out shortly.

Raul Santos, June 6th 2021

Comments »

Mellow overnight session // here is Tuesday NASDAQ trading plan

NASDAQ futures are coming into the second day of the final month of Q2 up about +20 after an overnight session featuring normal range and volume. Price was balanced overnight, balancing along the lower half of Monday’s range. As we approach cash open price is hovering below the Monday midpoint.

On the economic calendar today we have the Fed’s beige book at 2pm.

Yesterday we printed a normal variation down. The day began with a gap up inside range. After a brief two-way auction sellers stepped in and drove the overnight gap fill then continued lower, briefly probing into last Monday’s conviction buying range before discovering a bid. Responsive buyers were found ahead of that Monday’s midpoint and we spent the rest of the session slowly chopping our way back tot he daily mid. Then late in the session sellers defended the mid and we faded into the close.

Heading into today my primary expectation is for sellers to close the overnight gap down to 13,649.25 setting up a move down through overnight low 13,616.75. Look for buyers at 13,600 and for two way trade to ensue.

Hypo 2 buyers gap-and-go up through overnight high 13,673.50 and tag 13,700 before two way trade ensues.

Hypo 3 stronger buyers make a run to 13,800 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

Comments »

NASDAQ up a quick +50 into June // here is Monday trading plan

NASDAQ futures were balanced overnight and are heading into the final month of the second quarter gap up after an overnight session featuring extreme range and volume. As we approach cash open in this holiday shortened week price is hovering near last week’s high.

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

Last week we saw a strong rally Monday then a slow and steady upward drift for the rest of the week. Russell 2000 outperformed suggesting risk tolerance remains elevated.

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

On Friday the NASDAQ printed a neutral extreme down. The day began with a gap up in range and after an open-two-way auction price sort of chopped the mid for an hour and a half before rallying to a new qweekly high. Price held the highs for about an hour before falling back down through the mid. Then, sellers held the mid and pushed into a late-day neutral print, closing on the lows.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the Friday gap down at 13,693 before two way trade ensues.

Hypo 2 buyers gap and go up to 13,800 before two way trade ensues.

Hypo 3 stronger buyers tag 13,833 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

Comments »

June is RAUL month

Good morning and cheers to the beginning of summer. It amuses me how government and church bogart dates when pagans would pay homage to the old gods in the most hedonistic ways and repackage them as “holidays”. The real reason we celebrate right now is the heckin’ north coming back to life. Trees are re-leafing themselves. Corns poking up. Women are in heat.

It is right around this flamboyant time when I was born. On my due date. At 6am. Ready to live.

I’ve almost always been in a good mood. My whole life. Even now, when my situation has gone a bit mundane, being in the grips of too much work, I find all sorts of little opportunities to savor nature.

This morning, for instance, I awoke at 3am and like a moth to a light bulb made my way over to the loud thumping techno hall. Grabbed a coffee on the way and disco danced for a few hours before returning here to Mothership and preparing this week’s research. I worked most of yesterday and have more toiling ahead of me today, yet time was found for a bit of recreation — wiggled my bones and vibrated the old nervous system.

I suppose I’ll take a nap now. Then an elaborate breakfast before heading back to the coal mine.

Fine for now.

Raul Santos, May 31st 2021

Here is the 340th edition of Strategy Session. Enjoy:


Stocklabs Strategy Session: 05/31/21 – 06/04/21

I. Executive Summary

Raul’s bias score 3.40, medium bull*.  Choppy sideways drift. Then watch for Powell speak and non-farm payroll data early Friday to provide direction into the weekend.

U.S. markets are closed Monday in observation of Memorial Day.

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

II. RECAP OF THE ACTION

Strong rally Monday then a slow and steady upward drift for the rest of the week. Russell 2000 outperformed suggesting risk tolerance remains elevated.

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

Rotational Report:

About as quality as rotations can be for bulls. Tech strong, energy muted, utilities soft.

bullish

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

Concentrated Money Flows:

Money flows skewed bullish. A few semiconductors in the ledger which is a positive.

Volume delta remains pinned negative and median return was about +125 basis points.

Money flows are slightly bullish.

Here are this week’s results:

III. Stocklabs ACADEMY

Context

We are heading into the final month of the second quarter. The moon is waning. IndexModel is calling for a calm drift. Transports and semiconductors show balance (see Section IV). No major earnings due out. Economic calendar light. Stocklabs neutral. COVID fear is lessening.

Summer weather hitting the north.

All this adds up to form a contextual vibe of calm markets. Drift. This is of course only the case if we don’t encounter any unexpected meaningful news.

Note: The next two sections are auction theory.

What is The Market Trying To Do?

Week ended searching for buyers.

IV. THE WEEK AHEAD

What is The Market Likely To Do from Here?

Weekly forecast:

Choppy sideways drift. Then watch for Powell speak and non-farm payroll data early Friday 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]:

Watching this balance play out

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 are in this mini balance amid a larger discovery up phase. Neutral/bullish until something changes.

See below:

Semiconductors are balanced. Nvidia earnings sent the key PHLX component to a new record high. We can keep an eye on how the new high is received and deduce it to PHLX behavior, which is a key driver of overall market behavior. Balanced for now.

See below:

V. Stocklabs Hybrid Oversold

On Wednesday, May 12th Stocklabs flagged oversold on the 6- and 12-month algorithms. These bullish cycles run through end-of-day May 26th. Here is the final performance of each major indexr:

VI. INDEX MODEL

Bias model is back to extreme Rose Colored Sunglasses bullish bias after being neutral for two weeks consecutive week after being e[RCS] bullish three weeks back and RCS bearish four weeks prior.

We had a Bunker Buster thirteen weeks ago.

e[RCS] calls for a sideways drift, perhaps with a slight upward bias.

Here is the current spread:

VII. QUOTE OF THE WEEK:

“If you truly love nature, you will find beauty everywhere.” Vincent van Gogh

Trade simple, trade beautifully

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NASDAQ up a quick +100 into final week of May // here is Monday trading plan

NASDAQ futures are set to gap up into the week with prices trading up above last Friday’s midpoint and over +100 from last week’s close. Price was balanced overnight until about 3:30am New York when it began to probe beyond the mini balance. Price has been on a steady campaign higher since then and as we approach cash open price is hovering near the upper quadrant of last Friday’s range.

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

Last week was choppy through Tuesday then there was some late Tuesday selling. Pro gaps down across the board Wednesday that were bid into resulting in an all-day rally. Rally carried into Thursday. Then we essentially marked time Friday.

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

On Friday the NASDAQ printed a normal variation down. The day began with a gap up slightly above Thursday range. Sellers resolved the gap with an open-drive-down, driving down into the gap fill rapidly and then finding a responsive bid there. Said bidders could not take out the opening swing high. Instead sellers reasserted themselves and pushed an early range extension down. The selling continued until about noon, rotating price down to Thursday’s midpoint where we then bounced and marked time for the rest of the session.

Heading into today my primary expectation is for buyers to gap and go higher, probing above Friday high 13,570 and tagging 13,600 before two way trade ensues.

Hypo 2 sellers work into the overnight inventory and close the gap down to 13,410.50. Look for buyers ahead of 13,410 and for two way trade ensue.

Hypo 3 stronger sellers tag 13,300 before two way trade ensues.

Levels:

V0lume profiles, gaps and measured moves:

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