iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,121 Blog Posts

Exploring Temporary Phenomena

Yesterday’s profile was interesting to watch develop because if one had not clearly identified the opening drive-type action from the buyers, they may have hypothesized the action was only a temporary phenomenon known as a short squeeze.  Value was slowly migrating lower all week and we came into the morning with a sharp gap lower which suggested something overnight had changed the market’s dynamic.  When the second leg higher erupted at high noon, it signaled a fresh batch of initiating buyers had stepped in and put fresh money to work.

In short, a squeeze may have been the spark, but an authentic accumulation occurred throughout the rest of the day.

Trend days are considered risk-free entry point in Market Profile theory which suggests that buying any time during a trend day will allow you to exit at higher prices, eventually.  The “eventually” is one of the greatest qualities of market profile I have come to learn.  They are not a very effective timing tool.  Instead, they are fantastic for framing a day, estimating range, and locating key event points in the tape.  Timing is best achieved with the bar charts.

I’m going to keep our attention on the /NQ because I am actively trading it and most of my stocks are nestled in its electronic bosoms.

Weakness crept into the overnight session, whether it was profit taking or short sellers is not material, it was sell flow.  The action was able to recapture the upper quadrant of the second leg higher in the index, which is the area I envision us spending our day.  Best case scenario for the longs is a consolidation along the upper quadrant of the trend distribution.

Should the selling pick up and press us below 3382.75, this would suggest a significant sentiment shift, and would merit caution before initiating any new long exposure.

I have highlighted this level, as well as drawn out a few scenarios on the following market profile charts:

NQ_MarketProfile_11142013

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POWERFUL TREND DAY

sapce

I may have come into the day with a vision for lower prices, but all it took was a keen observation of the opening type to realign my mind to expect higher prices.  Buyers drove higher from the opening bell, aggressively recapturing yesterday’s low, then its value area, then the gap, then the high, and finally ripped apart any semblance of justifying swing shorts.

This move came from deep in the pits of bear land, where they had finally gained some footing.  There were traders much more established than yours truly, managing mountains of assets, who were intelligently positioned short into today.  THEY.GOT.STEAMROLLED. The action was unforgiving, offering little by the way of rotation lower.  I was away from my desk for most of the morning, which was okay, because my book was 95% long, like a surfer firmly positioned in the pipeline of a rogue wave smashing through shorts’ houses.

GOGO diesel you BEAST!  This must have been what it was like to trade in the early dot com days, where solid story stocks ripped the tits.  I was pounding the table to load the boat when GOGO gapped up after earnings.  This stock has made me more pesos than any other trade this year, yet I only scaled a pittance, a mere 1/5 of my position.  It was a sacrifice to the stock gods for their generosity.

Why not book more GOGO shares into this strength?

GOGO may be a hot ticker in the hallowed halls of iBankCoin and perhaps among the savvier twitter traders, but the general population is still well in the dark.  The story is easy to understand, the audience is captive, and the stock is waking up.  iBankCoin spoon fed the plebian audience a jumbo here.  Tell your friends, the worthy ones only of course.

The chicken trade started working today, with PPC making a strong move.  The reality is, almost everything is up today, and any long looks clever.  But this is my chicken trade, and it will arise.

I heard this commentary a few times today.  It went something like, “anyone can look like a genius in this market” and that simply infuriated me.  Does the gung-ho Apple bull look like a genius?  Do the conservative, risk-averse, underinvested PMs look like geniuses?  Does Keith Sweat, rocking a 5 dong, 5 skort book look like a genius?  Do the metal bulls?  HUH?!  DO THEY?!  Haters.

THE FOLKS AT IBANKCOIN LOOK LIKE GENIUSES…all of us, even us minions.  You should see the moves being made in 12631.  These folks are finding setups and executing.  A good lot of PPT members crushed the ONVO move.  #WEAREGENIUSES

There’s a lot of fire talk around TSLA and the entire situation stinks of desperation.  Obviously a major fire would be cause for concern in any operation’s core facility.  But the media is being greased to hype this shit up, I love it.  My Friday buys are still green.  I have dry powder to buy lower, and I simply cannot lose with Elon Musk on my team.  Only the government can fuck me, much like every facet of life.

If you are making solid gains right now do not discount your progress as luck or participating in an easy market.  You have done well.  You are picking stocks, perhaps chart setups, that you can tie risk into and you are executing.  I applaud all of you.  If you simply managed to refrain from shorting today you win.

Funny, I had one trade in the futures today, shorting the /NQ around 9:40am.  We were butting up against yesterday’s value area high and I [kind of] had a signal to short.  I took my position, took some heat, and doubled down per my pre-conceived plan.  At this point I have 5 contracts on and I am looking to scratch out four of them for break even.  I get the break even scratch then I book the final piece for a scratch also, after trying to get cute.  In short, I got out of the way in a very lucky manner.  That same trade could have gone max pain and stopped me out on five contracts.  It hasn’t happened in a long time, but the risk is always there.  This trade was all I needed to stay long in my port because I could feel the fear shorts had.  I scaled my little GOGO piece and piled all the earnings and more into YGE.  The rest is history as they say.

I have gone on way too long…victory lap complete.  Eat well tonight, make love to your wife, for tomorrow we continue the fight.

THANK YOU PPT

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Turning Our Attention To The Head

Two big rotations lower overnight have taken prices much lower in both the NASDAQ composite and the S&P futures.  Today’s market profile analysis will focus on the /NQ, the electronic mini futures contract which tracks the NASDAQ composite.

The reason for turning focus away from the S&P is because I perceive the current structure of the NASDAQ important here.

First, observe the following bar chart, dating back to 10/16, we are close to printing a head and shoulders topping pattern.  Price is in the top window pane:

NQ_1113_HnS

Trade has been bracketed since opening Sunday evening and we should monitor the bracket extremes to determine if the market is coming out of balance.  Much like the behavior at the edge of a low volume cave, price can penetrate a bracket extreme without breaking the level.

Looking at the overnight action, we can clearly see sellers establishing control overnight which has pressed us out of yesterday’s value area and range.  This tells us something overnight changed the perception of the market.  The risk today is elevated, as is the reward on an intraday basis.

It will be important to monitor the open type.  Early on my expectation is for buyers to react to these lower prices.  However, we are in “pro gap” territory currently, with price on the S&P trading 10 handles away from yesterday’s close.  This makes filling the gap a more challenging endeavor, one where someone certainly should not just buy the opening print and wait for the gap to fill.

I have highlighted the support levels I will be keying off of today in the NASDAQ as well as a envisioned a few scenarios on the following market profile charts:

NQ_MarketProfile_11132013

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Aloof

You may be expecting a delicious and powerful blog post from Raul today, a post loaded with grammatical errors and such demanding the prestige of my fellow internet trader.  After all, I am up 12 percent on yesterday’s GOGO purchase, with another block of shares deep in the green from pre-earnings.  Or maybe I could take a victory lap for cashing out some ONVO over ten and taking my position down to a runner which can now increase my trading account ad infinitum while I seek out other opportunities to extract funds from these markets.

On the contrary, I could gnash out a post going over the heat I am taking in my TSLA long or how I cut a small loss in NBG only to get a firm decock afterhours by a Baltic secondary.  This type of post would lambast short sellers and foretell stories of future victories over my villainous rivals.

But I cannot shake this cold chip resting snug on my shoulder which makes me want nothing to do with anybody.  I don’t even want to leave my office to head home and enjoy a warm fire.  I just want to sit here, staring out my dark window, sucking down saturated chia seeds.  Perhaps said seeds are the culprit.  Have you gotten on board this latest health tip?  You soak chia seeds, yes the exact same ones used on your Barack Obama pet, and then you suck down the gelatinous mix via water bottle.  It feels like you are slurping ground giblets but apparently you will have the strength of five Aztec warriors in a week or so.  So I added giblet juice to my regimen alongside heavy spinach consumption, moderate vitamin C, piss loads of beets, and the flax, and the god damned egregious water consumption.

Yet I still feel aloof.

I bought some WLT and AAPL.  I contemplated either WLT or SOL for so long I almost missed my entry.  The word of the day is slow.  The futures are not rotating how I know and love, yet I would have had a green day but I flip flopped on a long.  The level of focus required to trade futures is intense.  Stock trading feels like slow motion in comparison.  Today could have been a humble wage but was instead a mild shade of red.  I am 0-2 on the week, playing from behind.

I was a haught shade of green on the old port woo hoo

Have a good one

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Open Outside of Value

The indices experienced some selling early the morning and quickly reached oversold levels which are now in the process of working off as the United States wakes up.

Since our Sunday globex open, the S&P futures have been trading mostly flat in a very balanced and evenly distributed manner.  This makes it difficult to envision any specific scenarios for today because all of the distributions are complete.  Therefore we must focus our attention on the bracket extremes to gauge whether the market is coming out of balance and by which parties hand.

We are currently prices to open outside of yesterday’s value, but still within yesterday’s range.  If the sellers can reject our value area from yesterday, we may see acceptance lower which would suggest a change in conditions from this current bull brigade, a subtle shift we should be aware of should it occur.

I have highlighted key price levels on the following market profile charts as well as displayed the very balanced trade occurring on a 24 hour profile view:

ES_MarketProfile_11122013

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Momentum Monday

The /NQ traded rather choppy early on before deciding to rotate lower.  I attempted to trade the first two rotations, first short then long, and had to scratch both.  Then the third rotation came, again to the short side, but I had little-to-no conviction in the short so I had a high offer.  The result was me not getting filled on the first real rotation of the day.

I don’t overly mind because soon thereafter we printed a nice buying tail in the /NQ which affirmed my low conviction.  Even though the scalp I was attempting to work on would have been a winner, I could see my sentiment and lack of conviction was fitting when the buying tail printed.  I have highlighted our aggressive buy3r on the following market profile chart:

 

NQ_1111_buyingtail

Generally, the longer the tail, the greater the conviction behind the move.

After the swift rejecting price went sideways with a slight bullish bias on the indices in a low-volume holiday trading style.  Under the surface, the hottest of momentum stocks are ripping the sheets off naked shorts and exposing their pasty skin to frozen ice rain (extra redundantly).  TSLA continues its resurrection campaign, GOGO threw down a big beat that has all the home girls going crazy, and the boat trade is back en vogue.   IPOs (sans TWTR of course) are making silly gains as the market absorbs the new equity supply with swagger. Check out WIX and WUBA, awesomeness. WUBA sounds like dubstep music, that’s bullish.

I do say good people, we may be setting up for something rather randy into the holidays, something to get everyone loosened up for the spending season.  Nothing says indulge this xmas like a 401-k printing all-time highs.

Obviously it is only Monday and we have in fact seen only ONE day of terror this month.  Any honest speculator in the QE realm knows you get TWO days of sheer terror per month.

I sold a little ONVO today.  3d printing stocks have voyaged far from the vortex and gravitational pull is losing its effectiveness as hot names like DDD and SSYS go parabolic.  I shouldn’t have sold any today because this very well could continue into tomorrow given the steam.  But, like an honest trader, I see this 9 handle on ONVO as a logical level to scale some profits.  Therefore I did.

I do not have much cash on the books, but the 10% I do is eagerly seeking a home.

Top picks this week: TSLA, GOGO, and AMBA….there is nothing old man about that.

If you read this and decide to procure any of the above names without providing them a solid risk profile and moderate vigilance, then you are asking for a corrective swipe to one of your appendages.  Keep your guard up because we are not out of the woods yet.

http://youtu.be/yuR1rVVf358

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RAUL BUY: $GOGO

I added to my exisiting $GOGO long, making it a full size position.  Frank Abagnale trading style, catch me if you can.

 

Don’t be like Raul and buy GOGO, or you may lose money

 

 

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