iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,232 Blog Posts

NASDAQ flat after strong rally late Tuesday, FOMC on deck, here is the Wednesday trading plan

NASDAQ futures are coming into Wednesday flat after an overnight session featuring elevated range on elevated volume.  Price sprung higher in the initial hours of Globex, propelled by strong-as-ever earnings from the world’s largest company, Apple.  Then we came into balance, hovering inside last Friday’s range. At 8:15am ADP employment data came out better than expected.

Also on the economic agenda today we have crude oil inventories at 10:30am and an FOMC rate decision at 2pm.  The gambling halls down in Chicago are currently placing a 94.3% probability that the Fed will leave their benchmark borrowing rate unchanged.

Yesterday we printed a double distribution up.  The day began gap down and with an attempt lower.  Responsive buyers quickly stepped in and closed the gap.  Then we traded sideways while the rest of the market sold off.  Just after New York lunch a rally started to materialize, and we rallied clean through end-of-day and into Apple earnings.

Heading into today my primary expectation is for sellers to push down to 6666 before two way trade ensues ahead of FOMC rate decision.  Use third reaction analysis after the decision to determine direction into end-of-day.

Hypo 2 buyer work up through overnight high 6740 setting up a move to target 6757.25 before two way trade ensues ahead of FOMC rate decision.  Use third reaction analysis after the decision to determine direction into end-of-day.

Hypo 3 stronger buyers work up and close the open gap at 6777 before two way trade ensues ahead of FOMC rate decision.  Use third reaction analysis after the decision to determine direction into end-of-day.

Levels:

Volume profiles, gaps, and measured moves:

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Today’s the day, Tim Cook either saves or destroys us, here is the Tuesday NASDAQ trading plan

NASDAQ futures are coming into Tuesday gap down after an overnight session featuring normal range and normal volume.  An uncommon sight over the last few months, to see such normal metrics.  Price was balanced overnight, probing below the Monday cash low but overall remaining in the holding patter that began around noon Monday.

On the economic calendar today we have construction spending at 10am, ISM employment/manufacturing data at 10am, and a 4-week T-bill auction at 11:30am.

After the bell, the largest public company in the world, Apple, is set to report earnings.

Yesterday we printed a normal variation down.  It was shaped like a lowercase letter-b, which suggests a long liquidation took place without sellers ever becoming truly initiative.  This short-term phenomenon often occurs near the end of a move, and unless sellers continue pressing into the tape, remaining short becomes a precarious endeavor.

Heading into today my primary expectation is for sellers to gap-and-go lower, down to 6580.75 before we pause and wait to hear Apple earnings.

Hypo 2 buyers work into the overnight inventory and close the gap up to 6612.75 then continue higher, up to 6660 before two way trade ensues ahead of Apple earnings.

Hypo 3 stronger sellers become initiative and work down and close the gap at 6554.75 that we left behind on from last Wednesday.  Look for buyers at 6545 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ heads into the week gap up, Apple earnings Tuesday, here is the Monday trading plan

NASDAQ future are starting the week gap up after an overnight session featuring normal volume on elevated range.  Price was balanced overnight, trotting along inside of last Friday’s range.  At 8:30am personal consumption data came out in-line with expectations.

Also on the economic agenda today we have Chicago purchasing manager at 9:45am, pending home sales at 10am, and both a 3- and 6-month T-bill auction at 11:30am.

Last week was choppy.  Sellers stepped in late Monday morning and became initiative into Tuesday, trending markets lower.  They pressed into the open Wednesday and discovered a strong responsive bid ahead of major tech earnings, earnings which ultimately served to propel the NASDAQ higher into Thursday and Friday morning.  Then Friday morning sellers stepped in again before we balanced early Friday and traded sideways into the weekend.

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

On Friday the NASDAQ printed a normal variation down.  The day began gap up, likely in part from tech earnings that came out Thursday evening.  Sellers stepped in and worked the market lower for much of the morning before we balanced and traded sideways into the weekend.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6668.50.  From here we continue lower, down through overnight low 6660.50.  Look for buyers down at 6648 and two way trade to ensue.

Hypo 2 buyers work up through overnight high 6712.50 setting up a move to target 6757 before two way trade ensues, effectively negating last Friday’s conviction seller.

Hypo 3 stronger sellers sustain trade below 6640 setting up a move to target 6617.25.

Levels:

Volume profiles, gaps, and measured moves:

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Models are bearish, prepare to sell in May

Greetings lads,

Floods coming.

And I woke up in a calm mood.  Then I read blogs by my favorite trading psychologist Brett Steenbarger and a zen-like state washed over me.

There will be no mixing words today, the models are bearish.  Everything is aligned to expect downward action next week.  Literally, everything.  From visceral cues like the moon and May and 60 years of Korean conflict ending, to 30 different data points we observe every Sunday as part of the Sunday Strategy Session.  To exacerbate the situation, we have a Fed rate decision Wednesday afternoon and employment data Friday morning.  The gambling halls down in Chicago are favoring camp unchanged heading into Jerome Powell’s third meeting as Chairmen of USA’s Federal Reserve, an establishment that remains at the head of the free world, for now.

I initiated a bearish bet against Canada Goose recently.  It has been wrong so far.  You will find no shortage of stock market commentators who can point to the left side of a price chart and tell you what happened and why.  But rare is the anticipatory eye for charts.  We have discussed failed auctions many times on this humble blog, including a promise I made to myself and the reader in 2014 that we will never miss another failed auction.  There are 59 posts in my archive that reference “failed auctions”.  In practice, to trade them, requires stepping in front of a potential locomotive strength counter force.  If you trade a failed auction after it confirms, you will miss a bulk of the move.

Anyhow, failed auction theory and some other things are what put me short $GOOS.  For a long-form of my reasoning why, you can click here.

Listen, I will not be selling any of my positions in May.  When I buy a stock, it isn’t in an attempt to take advantage of some capricious price oscillation.  I do it because I love the company’s mission and trust their management team.  And I marry that company, many companies, like some kind of Mormon polygamist whose only wives are immortal corporations.

Anyways I know most readers of finance blogs are not really interested in my ethos.  They just want to be told which acronym to buy or sell, assuaging all responsibility for the win/loss onto someone else.  Fuck, that sentence makes me angry.

I truly believe that if you are reading my blog then you are the type of person who wants to own the responsibility of their financial well being.  Otherwise you wouldn’t stick around through my far-out Sunday diatribes.

What I will be doing ahead of May, and as soon as Monday morning, pre-market (I do need to wring my hat Sunday night even looking at Globex, thank you) is hedging.  First using futures, then inverse ETFs.  I am not sure which ones yet, and I am open to suggestions.

In fact, I would very much appreciate if you would tell me in the comments below what your favorite bearish ETF is.

Models are bearish lads.  Historic rhythms are curiously cautious.  Trade accordingly.

Exodus members, the 180th edition of Strategy Session is live inside Exodus.  Go check out all the specific cues we are watching this week.

 

 

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Amazon saves the NASDAQ, here is the Friday trading plan

NASDAQ futures are coming into Friday gap up after an overnight session featuring elevated range and volume.  Price was balanced overnight after surging higher Thursday afternoon on strong earnings from Amazon.  Microsoft and Intel also reported positive earnings.  Tech is alive and growing.  Prices continued higher around 8:30am after US GDP came out better-than-expected.

It also appears the world issues with North Korea have been resolved, in a large part due to President Trump.

The only other economic event today comes at 10am when University of Michigan releases their final April reading of sentiment.

Yesterday the NASDAQ printed a double distribution trend up.  The day began gap up and with sellers unable to work lower.  Instead buyers sustained price above 6631 setting up a move to target 6700 (hypo 2).  Price continued higher after the bell.

Heading into today my primary expectation is for sellers to work into the overnight inventory.  Look for buyers ahead of 6755 and a move higher, up to 6777 before two way trade ensues.

Hypo 2 buyers gap-and-go higher, sustaining trade above 6800, setting up a move to target 6843 before two way trade ensues.

Hypo 3 sellers press a full gap fill down to 6736.25.  Look for buyers ahead of 6700 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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Big tech earnings this afternoon, here is the Thursday NASDAQ trading plan

NASDAQ futures are coming into Thursday gap up after an overnight session featuring elevated range and volume.  Price was balanced overnight, moving higher initially after Facebook reported earnings, then rallying again after 3am.  At 8:30am advance goods trades balance, initial/continuing jobless claims, and durable goods orders all came in better than expected.

At 1pm the US Treasury will auction off $29 billion in 7-year Notes.

Amazon, Microsoft, and Intel are set to report earnings after-market-close.

Yesterday we printed a normal variation up.  The day began with sellers driving the market to a new weekly low.  This discovered a responsive bid early in the day and we spent the rest of the day chopping sideways before ramping higher into the bell.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6554.75.  Look for buyers around 6532.25 and two way trade to ensue.

Hypo 2 buyers sustain trade above 6631 setting up a short squeeze up to 6700.

Hypo 3 sellers regain Thursday range, sustaining trade below 6532.25, setting up a move down to 6500.

Levels:

Volume profiles, gaps, and measured moves:

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Day after trend day, here is the Wednesday NASDAQ trading plan

NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme volume and range.  Price was balanced overnight, churning in the lower quadrant of Tuesday’s trend down.

The economic calendar is light today.  At 10:30am crude oil inventory, 11:30am the US Treasury will auction off 2-year floating rate Notes, and at 1pm 5-year Notes.

Be aware Facebook reports after market close.  This is a NASDAQ mover.

Yesterday we printed a trend down.  The day began gap up and sellers quickly drove the gap closed.  Then sellers continued driving lower most of the session, closing a gap from 4/9 along the way, coming into slight balance late in the day.

Heading into today my primary expectation is for sellers to gap-and-go lower, down through overnight low 6475.50 and closing the  4/6 gap down at 6451.50 before two way trade ensues.

Hypo 2 buyers work into the overnight inventory and close the gap up to 6525 then continue higher up through overnight high 6538.75.  Look for sellers up at at 6562.25 and two way trade to ensue.

Hypo 3 stronger sellers press a move down to 6400 before two way trade.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ a touch higher and balanced, here is the Tuesday trading plan

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring elevated volume on extreme range.  Price worked higher overnight, staying inside the Monday cash range.  As we approach cash open price is hovering above Monday’s midpoint.

On the economic agenda today we have new home sales and consumer confidence at 10am, 4- and 52-week T-bill auctions at 11:30am, and a 2-year Note auction at 1pm.

Yesterday we printed a neutral day.  The day began gap up which sellers quickly worked closed before a strong responsive bid stepped in ahead of last Friday’s low.  Buyers stalled out just beyond last Friday’s midpoint and we worked lower, down through the daily range making a new session low.  We ramped higher into the bell and then spiked a bit more to the upside after Alphabet reported earnings.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6665.50  From here we continue lower, down through overnight low 6654 before two way trade ensues.

Hypo 2 buyers gap and go higher, sustaining trade above 6700 setting up a move to take out overnight hgih 6717.75 before two way trade ensues.

Hypo 3 stronger sellers come in and we liquidate down to 6600 before two way trade ensues.  Stretch downside target is 6578.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ a touch higher into last full week of April, here is the Monday trading plan

NASDAQ futures are coming into Monday gap up after an overnight session featuring elevated range and volume.  Price was balanced overnight, sustaining trade in the lower quadrant of last Friday’s double distribution trend down.

On the economic calendar today we have MARKIT manufacturing/service/composite PMI at 9:45am, existing home sales at 10am, and a 3- and 6-month T-bill auction at 11:30am.

Also be aware Google parent Alphabet, Inc is reporting earnings after-market-close.  This is a NASDAQ mover.

Last week we chopped.  Some gap ups early in the week, gap downs later in the week.  Chop.  The Russell showed relative strength.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a double distribution trend down.  The day began with a gap down then a selling drive away from Thursday range.  Price continued lower before coming into balance just ahead of the week’s low.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6676.75.  From here sellers continue lower, down through overnight low 6660.  Look for buyers down at 6635 and two way trade to ensue.

Hypo 2 buyers gap and go higher, up to close the gap at 6777 before two way trade ensues.

Hypo 3 stronger sellers take price down to 6580 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Spring finally reaches the north, prepare for a negative news cycle

In case you missed it, I blogged in detail about my investing methodology and highlighted my top short bet heading into spring/summer.  Click Here to check it out!

Greetings lads,

Here we are again.  The end of April.  The IRS has been informed of the finances of all citizens.  The middle east is heating up, displacing millions of sapiens who cannot support their tribes without water.  As they wander into their neighbor’s territory, base animal instincts flare up and violence ensues.  All thanks to global warming.

May usually brings out the bearish commentary and sometimes some broad market weakness.  Our good robot friends inside Exodus show us that historically May and June are a coin toss for $QQQ, a popular NASDAQ ETF:

The model we hand build every Sunday when preparing the Strategy Session is neutral for a third week.  That means we have no solid signal to forecast a directional bias for the next five trading days.  We have to rely on other context, in particular the PHLX semiconductor index.  It could be in a topping process.  It could also be in balanace.  The main thing to keep an eye on is where buyers and sellers ‘should’ be, and how the index actually behaves when we visit those levels.  This type of market observation is useful because it does not require you to try and make trading decisions based off noisy factors like politicians, Arabian conflict, or stock market gurus.

::gags::

::takes a long kombucha sip, swishing the SCOBY::

It was the weakness seen in the semiconductor index last Thursday that had us initiating bearish bets ahead of Friday’s trend down.  To see my favorite bearish bet, Click Here!

Aside from contextual cues, we have no way of confidently predicting what may occur next week.  But ready yourself for noise and distraction.  Do not let the heavy flow of negative news knock you off your feet.  Ground yourself by taking a few minutes each day to watch bird behavior, or the way a wave of people fill up the queues at a super market—only for it to be slow moments later.  This human phenomenon can be observed especially well at Costco.

Then, as you develop a deeper understanding of human nature, step outside of it and improve your intuitive ability to be a contrarian.  But not just a contrarian for the sake of being different.  Instead joining nature as it seeks to restore balance.  To reach homeostasis.

Cheers lads, it appears spring has finally come to the north.  May the season bring to light many prosperous new beginnings.

RAUL SANTOS, April 22nd, 2018

Exodus members, the 179th edition of Strategy Session is live, go check it out.

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