Morning $ES_F Analysis – Building on Strength

Life has a way of slowing you down, much like a solid piece of market resistance.  We gauge the health of an index, commodity, or stock often not by how it handles resistance the first time around, but rather upon subsequent tests.  The pullback is where a stock can build strength and momentum to blast through an obstacle.  Curious enough, the same goes for support.

Let’s say you missed Friday’s session, like me.  You may feel very out of sorts.  If you build an understanding of the market profile, you’ll find it quickly telling the story of Friday and getting you back up to speed.

First off, the “free exposure” given from the rally held true, but only for an hour of Friday’s session, after which the market gave back over half the move.  On the surface, this is bad news for the bulls.  But if you’re in the mindset that we’re in a corrective phase of the market, this action is expected and normal.

Given these conditions, we need to be nimble, rank our positions, be ready to cut old favorites loose and perhaps initiate new positions in better served areas of the markets.  I’ll be back later this morning with thoughts on this.

If we lose Friday’s low, things get slippery fast as we traverse Thursday’s dynamic trend.  Up above, we mostly can key off last Monday’s tight auction, and the relevant levels produced from its auction.

To my eyes, the major hand tip comes from accepting price either over 1639.50 value area high 06/10 or Thursday’s low at 1601.

There were two major distributions occurring Friday.  I’ve split them accordingly in the below chart, and they give us clear guideposts as we progress today.  We were very strong overnight.  This can be interpreted as bullish, but more so I see it as an opportunity for bulls to give it up.  We need to be on guard for that, and armed with these levels of support we can measure the progress made by sellers:

The longest vertical moves happen most often when the market starts outside of value and trades entirely though it.

When I split Wednesday’s profile, the value area I needed to look at became clear, ranging from 1611 – 1619 give or take a tick.  I was out of my first longs before 1618, but when the market pulled back and set its eyes on challenging 1619 for a second time, I got long again.  It was a lovely trade.  I had 1.5 points of room between my entry and the well defined resistance so I scaled off profit, placed my stop at a level that would take the sellers lots of effort to disqualify the trade, and went about my business of talking smack on twitter and whatnot.

Needless to say, the dynamic move through that resistance didn’t look back and earned five handles before running into my next logical price level.  This is really exciting stuff.

When a trend day occurs, you see very little overlap in the TPOs, and that’s exactly what we saw today.  Getting long anywhere during a trend day is hypothetically risk free exposure heading into the following session since we should at the least digest the upper end of the range.

Using the 6/10 profile you can see the levels where we can expect upside resistance.  Should none of them hold, just set your sights on 1650 and hold’on to your pants.

I’ll be watching the following levels in the morning.  However, I’ll be working remote, so I’m uploading the chart tonight:

NOTE: I’ll be rolling into and quoting the September contract after this weekend.  ALSO NOTE: like a beautiful woman, the sell off and subsequent bounce had near-perfect symmetry, lovely:

I certainly hope I’m not beating a dead horse, buying more solar longs into the close.  If I had a time machine that could give me 30 minutes back, I would have bought either GS, XONE, or CHCI.

Especially el CHCI.  Watch that one tomorrow.

But instead I bought a trashy little stock that goes by the handle of HSOL.  May it burn my enemies like ants under a magnifying glass.

Fly favorite (and quickly climbing my ranks) IMMR asserted a nice comeback today and has the look I like.

Believe me…I see the $45 level resistance on TPX.  I don’t care.  They’re selling these beds like truck stop hot cakes.

There was some straight up voodoo going down behind The PPT pay wall today that had members laser focused on higher equity prices.  It scared me a little, I’m not going to lie.  It was like walking in on a séance while the devil plays a fiddle made of gold.

RGLD caught a strong bid on Hilsenrath mouthing off.

Watch what goes down tonight as the sun settles and biblical storms impress upon the east coast.  The birth is happening.  Tomorrow is my birthday and with it comes great power for Raul.  Galactic alignments, hail storms, and ABENOMICS!

I must be off, for many preparations must be made before sunrise.

I’m feeling a little in the zone today so you must pardon my absence.  I’ve been crushing this S&P tape since 11pm last night.  Shorting, longing, more longing, and now I’m finally flat and in awe.

I made good monies today.

As I turn a more focused eye to these stocks the first thing striking me as odd is the lack of tenacious demand for solars.  It’s like the god damned secondary over at FSLR put a wet blanket on the whole industry.  Everyone’s still tending to their sunburns with coconut and aloe.  But I must let you know, Raul never burns, I only get darker.  And when I get really dark, things get weird.  By that I mean YGE needs to get moving NOW!

HMIN will cut dicks once it finally crushes this stupid 30 level.

DDD is still blowing minds around the world, building shit out of polymers and what have you.  Believe it or not, this company is still special even if Japan unwinds their monetary policy.

China isn’t getting awesome yet.  They will be.  Never sleep on the Chinese.

TPX is behaving excellent.  I think you have to keep the weekly chart in mind if we see follow through tomorrow.  That would carry some major implications.  Watch me crush this trade.

YY is going red to green but will always have a red soul and desire to kill shorts.

IMMR yes they have the haptics.

I bought more ODP because something about office supply stores gets me excited.

The market headed south early on last night and made around 10 handles of progress to the downside before enticing buyers back into the S&P.  The dynamic action left behind a volume pocket which will be of interest as we approach the opening bell.  I’ve highlighted it below:

In terms of the market profile footprints, we’re seeing these large, D-shaped profiles, which signal no real directional conviction.  The bearish bias from yesterday comes from the fact that we closed out near the low of the session.  The follow through overnight adds credence to their cause.  The resistance overhead is pretty clear cut in the following picture:

We still have a big gap below to watch also, good luck trading today, people:

China

The “Chinese Burrito” industry is working its way up The PPT industry rankings since last month.  Check out stocks like RENN, YY, DANG, or VIPS.  They don’t care about the yen or the S&P, they care about The Leader.

Do you smoke?  If not, stay out of China.  Everyone will offer you cigarettes—two at a time.  They smoke in elevators, they smoke in hospitals, they god damned smoke while holding dynamite.  They care about nothing!  Life tends to be short and hard, thus they take getting it while it’s here very seriously.

Their rice, it has plastic in it.

Are you catching my drift?  All they want is the monies and they will do anything to earn it.  Why do they want all the monies?  I’m not entirely sure.

When you go home tonight and you plop onto your pleather couch for a loathing evening of television, I want you to think about your brethren to the east and their prerogative as the rising power to outperform USA at their own game—stocks.  They’re coming for you…

My tops picks in this space are current longs HMIN, YY, and YGE

For the gambler, I’d like to see if MY can go stupid to the upside.  Why not?  They make wind power, laugh out loud, a BHO sweetheart.

All I want for my birthday is a carton of Zhong Nan Hai and a flaming foot rub.

Per the modus operandi, I started the day as I always do: panic when the alarm rings and direct my fuzzy eyes to the undersized iPhone for quotes on the futures.  “Oh they’re up wonderfully!” my internal dialogue rattled off.

I had my new breakfast, water with no ice.  It’s very American to ice your water, especially in the morning.  Next the morning commute was divine, showing signs of diminishing congestion. The blessing come summer of less women driving their bastard children to school. 

Upon arriving at my terminal, my minion greeted me with coffee.  I like my coffee just like my women: hot, black, and strong.  I immediately scalp two handles of upside out of the $ES_F.  Then I spot the trend change and capture 4 handles down during the gap fill.  Oh how lovely a morning it was.

Then the bozos kept selling the futures down.  Bozos really, for they’re fighting a losing battle with a structured system much more powerful then they fathom.  So I bought more YGE.  My foray into trading solar stocks isn’t dead, yet.

As we’re all held victim to the caprices of the Yen and its stupid ETF, FXY, I said forget this and had a walk and enjoyed some fancy tacos.  This is nonsensical noise.  Eventually this mess will all be sorted, lines will be snorted, and ladies will be courted.

Moving on to more pressing matters:

The very important matter of my birth is just around the corner, and I refuse to let a stupid little currency and the jackass carry traders sully my good time.  I’m eating many cakes.  I’m eating many cakes with both hands and getting frosting all over my mouse and keyboard.  I don’t care.

Do you see how much I’m not caring right now?

Until the market starts bleeding me out via my swing longs, I’m looking at a very green day of future trading pared with some resilient longs, names like CREE, TPX, and IMMR.  Hat tip on the haptics good Fly sir.

We know how it ends, but can you stomach the intermediate roller coaster?  Find a way how.

The overnight session has been strong, pressing the S&P into the upper quadrant of yesterday’s action.  We’re nearly 10 handles above yesterday’s close.  We’re certainly seeing a market climate loaded with chop and large gapping action.

Yesterday’s auction was a battle for control as we auctioned inside the thinly traded zone from 1632 – 1617.  The sellers came to the market early in the afternoon and leaned against Monday’s VAL as resistance.  A clear victory for the bulls today would be building acceptance back above 1640.

Sellers want to press price below the value point of control set at 1625.50 yesterday.  From there, a push down to 1614 becomes a distinct possibility.

I’ve highlighted this level and other key price zones below:

I was caught out of position today in FSLR and as a result was stopped out for a single day 6 percent loss.  Listen closely, it happens.  The way I chase momentum, about 1 in 10 trades does this to me.

If you recall, I bought two solar names yesterday, YGE being the other name.  Interestingly enough, this position is sized the same as FSLR.  But pull up the two charts and you might be able to see why one stopped out and the other didn’t.   I’m not saying YGE is a sure winner here, the trade is still in question, but it is/was a better bet than FSLR yesterday at 3 pm.

CREE burned me too when it melted its heat sinks and lit the ceilings on fire here in la casa de Raul.  I will go to hell and back with this name though, extra devil.

Every other part of my book sucked less, which is good.  YY is at an important junction.  This junket may have already reached its destination as they say, but I would be remiss if I cut it after one day of selling.

My largest position performed admirably.  Well done HMIN, may your holding out for better days be met with strong accumulation.  I’m talking to stocks again…I need to bring this up next time I see my therapist.

I closed out the day with cash elevated back to 35 percent.

I’ve been on the long side all morning, both in the futures and the stocks.  Well, I came into the day long stocks and enjoyed a nice 2 percent drawdown on my swings to start the day.

Now it’s practically green.  Si!

One thing isn’t working at all and that’s solar.  I chased YGE and FSLR yesterday, nearly buying their respective highs, and you see the result today.  Both positions are down over 5 percent and not catching a bid.

Therefore I’m trading everything else that is catching a bid to make up the ground being lost by these solar issuances.  They haven’t told me I’m wrong yet.  Unfortunately, I’ll have to be about 10 percent wrong to know it’s the case.  Such is the life of an overeager speculator.  Position accordingly.

Aside from my bashed on the head by Japanese men wielding solar panels it’s a good day.  We filled a 15 handle gap, a pro gap as they say.  The pros filled the pro gap and did so with the steady hand of accumulation.

I still like this tape to the long side.  I scaled some LEDS too soon, at $1.98.

My new longs are more YY and some ODP, yes…you know me.