iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
3,601 Blog Posts

Gap up near last week high, here is the Tuesday trading plan

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring extreme volume on elevated range.  Price was balanced overnight, chopping along the highs of Monday and beyond.  As we approach cash open, price is hovering near globex high, which is up near last week’s high print from last Thursday.

On the economic calendar today we have existing home sales at 10am followed by a 2-year note auction at 1pm.

There are major tech earnings due out this week, but they do not kick-off until Wednesday after-market-close.

Yesterday we printed a normal variation up.  The day began with a gap up and two way auction, with price compressing into a tight range above last Friday’s midpoint.  Sellers made an early attempt to close the overnight gap up but were met with strong responsive buying ahead of the Friday naked VPOC.  This turned the auction higher, and we spent the rest of the day slowly grinding higher, never taking out last Friday’s high but closing near high of day.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 7979.25 and taking out Thursday high 7992.25. Look for sellers up at 8000 and two way trade to ensue.

Hypo 2 sellers work into the overnight inventory and close the gap down to 7948 then continue down through overnight low 7935.  Look for buyers down at 7931 and two way trade to ensue.

Volume profiles, gaps, and measured moves:

 

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Big important week, on Wednesday we hear from Our Dear Leader

Just finished my Sunday research, and the Strategy Session I just logged behind the paywall of Exodus is a banger.  And since I have little incentive to privatize the information I create, and since many readers of the old humble Raul blog have a hard time grasping how to even use actionable information, I am going to share a few key tidbits from the report to public forum.

First the Executive Summary.  When you open up Strategy Session this is the first thing you will see, Section I. I use roman numerals to give the report a serious tone, because believe me, it is.  The Executive Summary is everything I analyze and compute concentrated down into as few words as possible.  It is designed to give women of industry a quick snapshot of what to expect on the week.  Here is this Sunday’s entry:

I. Executive Summary

Raul’s bias score 3.10, neutral.  Equity prices continue to work higher, accelerating to the upside after Wednesday, with earnings out of Microsoft and Tesla (Wednesday AMC) serving as the catalyst, and then Amazon earnings (Thursday AMC) acting as the accelerant.

I don’t think most people understand what drives stock market behavior.  Their first mistake is watching the news.  Like literally, most people sit down and stare at a box that shows moving pictures and they expect to gain insight into why things happen.  Really disturbing when you think about it.  I hooked the antenna on the roof of Mothership to my 70 inch Samsung before the weekend because I had a large gathering and wanted my guests to have access to sporting events.  I am inclusive host, and while I would rather slide my eyeballs along a sheet of ice than watch american college football, I knew there were going to be some adult males at my party and I wanted them to feel comfortable.  There were actually seven different genders at my party and everyone had a blast.  I digress.  The antenna pulls in 60 digital channels essentially for free.  And when the adult males were gathered around the television, I couldn’t help but notice the occasional talking head that would pop on the screen and feed quick news take.  All useless bullshit.  Fortunately the tevee was muted, and latino music was being played loudly, except for the occasional times when my nephew would interrupt my Google Play playlist to play The Jurassic Park theme song or his favorite hits from Guardians of The Galaxy.  Wow I am really digressing.  In any event, most people do not know what drives the stock market.  I want to bring your attention to Section III of the report, which discusses an algorithmic cycles we are in the middle of and highlights which contextual world happenings we can actually quantify and objectively judge:

III. Exodus ACADEMY

Understanding the Overbought signal’s historical statistics

As I stated last week, the Exodus “Mother algo” (36-month) swung from oversold-to-overbought.  This is about as bullish as the system can be, but unless you understand the historical statistics, you might be inclined to close out trades early, and historically speaking that is a mistake.  When you look at the below data set, it is important you focus on what happens from Day 5 and beyond:

Most of the gains that have happened when this signal fires happen towards the end of the cycle.

Okay now pair that with our current market context—we have protests happening all over the globe, U.S. politics are heating up, including an ongoing attempt to impeach the President.  But more importantly, pair our overbought signal with something far more palpable like the upcoming earnings announcements from Microsoft and Tesla (Wednesday AMC) and Amazon (Thursday AMC).  These will be real numbers, objective results that the markets will immediately react to.  These organizations are more important than any sovereign state or their politicians and protestors, and if these companies are growing their businesses, and the market reacts favorably, that is all that matters to us as speculators.

Removing my biases and said more simply, the earnings due out this week are likely to validate our trading signal.

But when we really step back and think about the big picture, it goes back to the Core Long-Term Bullish Thesis I laid out back in December of 2017 when I was on one.  Nothing has changed since then as I continue to be on a proverbial one.  In case you are too busy to take a trip back to December 2017, the quick-and-dirty is Moore’s Law of computing power, and the exponential growth curve associated with it, paired with innovations in AI, and then inter-spliced with Darwinian Evolution gives us a clear indication that we are not likely to experience another recession for the rest of my mortal existence, which I estimate to be another oh 80 years-or-so.   In case you’re not too good at reading comprehension, this handy video might help you wrap your brain around what I am talking about:

When it comes to semiconductors, we have a very simple way of tracking the progress they are making and whether or not the developing facts on the ground support my thesis.  The PHLX Semiconductor index is monitored closely as part of the Strategy Session, and this week’s entry cuts through all the other nonsense you will read about investing, finance, the stock market, stocks, trading, forex, fuck you, crypto, bull shit. Please read this excerpt from Section IV:

IV. THE WEEK AHEAD

Semiconductors poked to a new high again, now looking like discovery

Semiconductors look like they may be entering another leg of discovery up.  Watch for earnings out of Intel (Thursday AMC) to offer clarity on whether this upside can stick.  If it does, this key contextual index is likely to lift the entire market.

See below:

The semiconductor index being at this key junction is everything you need to monitor.  At least 30 inches of my screens, the lenses with which I view the entire world, will be dedicated to this index.  No news needed, thank you.

That is all I wanted to say about the upcoming week and what my research is signalling.

As anyone whose read the old Raul blog over the years knows, Tesla is my largest investment by quite a bit.  People often ask me, “Hey Raul, you’re always swooning over Elon Musk’s latest achievements and sucking the dicks of every electric transportation robot rolling off the Tesla factory floor, why don’t you own a Tesla?”  I would like to address this now—my purpose during this blip of divine mortal existance is to extract as many Fiat U.S. Federal Reserve notes from the global financial complex as possible.  Said fiat is to be converted into property as far north and at as high an altitude as my constitution will allow.  Said funds will also be used to procure other real assets like cement, greenhouses, tractors, solar panels and batteries.  Any excess reserves will be converted into bitcoin for the inevitable need to conduct “illicit transactions” once the demented Chinese seize control of the planet.  If you think I intend to let some commies oppress me into their small box life you’re nuts.  So for now, I don’t need a Tesla.  My faithful Ford Focus, aka EL BURRO, is operating just fine.

Praise and Glory to Elon.  Praise and Glory to The Leader.  Praise and Glory to Tesla.

fin

RAUL SANTOS, October 20th, 2019

Exodus members, the 257th edition of Strategy Session is live.  There are a few interesting tidbits that I left out of this spirited blog entry, go check it out!

 

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NASDAQ chilling, here is the Friday trading plan

NASDAQ futures are coming into Friday nearly flat after an overnight session featuring elevated range on extreme volume.  Price was balanced overnight, balancing along the lower half of Thursday’s range after briefly exceeding the Thursday cash low around 3:30am New York.  As we approach cash open, price is hovering just below the Thursday midpoint.

On the economic calendar today we have Leading Indicators at 10am.

Yesterday we printed a normal variation down.  The day began with a gap up to a new weekly high and after a two-way auction sellers stepped in and worked the overnight gap shut.  Sellers continued a bit lower, tagging the Wednesday naked VPOC before settling into a tight range below the daily midpoint.

Heading into today my primary expectation is for buyers to work up through overnight high 7963.25 top tag 7973 before two way trade ensues.

Hypo 2 stronger buyers trade up to 7988.25 before two way trade ensues.

Hypo 3 sellers press down through overnight low 7917.25 setting up a move to tag 7900 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ rally continues, up gap up+30 into Thursday, here is the trading plan

NASDAQ futures are coming into Thursday gap up after an overnight session featuring extreme range and volume.  Price worked higher overnight, trading up near (but not exceeding) the swing high set back on 09/12, a day which itself was nearly at record highs.  Then we came into a tight balance.  At 8:30am several economic data came out—initial/continuing jobless claims data and Philly Fed business outlook were worse than expected, building permits/housing starts were mixed.  As we approach cash open, price is hovering above the Wednesday high, in the upper quadrant of the 09/12 range.

Also on the economic calendar today we have crude oil inventories at 11am, 4- and 8-week T-bill auctions at 11:30am followed by a 5-year TIPS auction at 1pm.

Yesterday we printed a normal variation up.  The day began with a gap down and two way auction.  Sellers had a try lower but couldn’t work much below the Tuesday midpoint before responsive sellers came in and formed a sharp excess low.  We then pressed range extension up before grinding back down near the daily low.  Late in the day we ramped back up to the high.

Heading into today my primary expectation is for a gap and go higher.  Look for buyers to trade up beyond the 8000 century mark and sustain trade above it, setting up a rally up to 8031 before two way trade ensues.

Hypo 2 stronger buyers rally to record highs, trading up through 8053 and sustaining trade above it, open air.

Hypo 3 sellers press down into overnight inventory and close the gap down to 7948 before two way trade ensues.

Levels:

 

Volume profiles, gaps, and measured moves:

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Calm ascent continues, here is the Wednesday NASDAQ trading plan

NASDAQ futures are coming into Wednesday gap down after an overnight session featuring extreme volume on normal range.  Price was balanced overnight, chopping along the upper quadrant of Tuesday’s range.  As we approach cash open, price is hovering in the upper quad.

On the economic calendar today we have business inventories at 10am, NAHB Housing Market index at 10:45am, Fed’s Beige Book at 2pm and Long-term TIC flows at 4pm.

Yesterday we printed a double distribution trend up.  The day began with a gap up and and drive higher, with price rallying up beyond the 09/20 liquidation down day’s high early on.  Price then formed a tight consolidation along the highs before extending the gains later in the session and closing near session high.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up at 7959.50 before continuing higher through overnight high 7962.50. Look for sellers up at 7976 and two way trade to ensue.

Hypo 2 strong buyers rally up to 8000 before two way trade ensues.

Hypo 3 sellers press down through overnight low 7925.75 setting up a move down to 7900 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ works higher overnight, holds Friday range, here is the morning trading plan

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring elevated range on extreme volume.  Price worked higher overnight, trading up through the Monday high and tagging 7900 (primary hypo from the Monday report) before fading lower.  As we approach cash open, price is hovering a few ticks above the Monday high.

On the economic calendar today we have two odd Treasury auctions, 13- and 26-week T-bill auctions at 11:30am.

Yesterday we printed a normal variation up.  The day began with a slight gap down.  During an open two-way auction sellers were unable to trade down through the Friday low, instead stopping right on the bottom tick before the auction turned higher.  After a brief range extension up, price spent the rest of the session chopping along the top-side of the daily mid, eventually closing a few ticks below it.  This tight range came after a heavy flow of news over the weekend including President Donald Trump tweeting about positive developments in the ongoing trade negotiations with China and military skirmishes in the Middle East.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 7908.25 and continuing up to 7919.75 before two way trade ensues.

Hypo 2 stronger buyers trade up to 7941.75 before two way trade ensues.

Hypo 3 sellers press down through overnight low 7854.75 setting up a move to target 7800 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Minor gap down into Monday, here is the NASDAQ trading plan

NASDAQ futures are coming into the second full week of October, option expiration week with a slight gap down after an overnight session featuring extreme range and volume.  Price was balanced for most of the Globex session before making a sell rotation around 5am New York.  The selling pressed into the open gap left behind last Friday before discovering responsive buyers ahead of the Monday/Thursday highs.  As we approach cash open, price is hovering along last Friday’s low.

There are no economic events today. The U.S. Government is taking a holiday.

Last week began with a slight gap down also.  Monday was strong early on before fading late in the day.  There was a big gap down Tuesday that found buyers before reversing and closing on the lows .  Wednesday gap up and slow rotation higher that continued through Thursday before a big gap up Friday and drive higher early on before chopping lower into the close.  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 and drive higher, trading up to prices unseen since 09/20 before coming into balance.  09/20 was a strong liquidation sell day and buyers were still present at these levels.  There was a considerable amount of volatility Friday, with price oscillating from daily high, to low, then back to a new high before going back to the low and closing near it.  Signs of higher timeframe activity and a market out of balance.

Neutral extreme down.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7857.50.  From here we continue higher, up through overnight high 7894.75.  Look for sellers up at 7900 and two way trade to ensue.

Hypo 2 sellers press down through overnight low 7807 setting up a move to tag 7800 before two way trade ensues.

Hypo 3 stronger sellers trade down to 7781.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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Active trading is an art

Part of the reason I fire up the old blog-o-machine every Sunday is because I am contributing thought to an industry rife with frauds and hacks, hacks who maybe don’t realize they dish out droves of bad information on trading and frauds who would just as shamelessly convince nice old ladies to wire them money.  And I figure, well I better put out something honest and true to persist and resist.  My motivation is reverence for trading competency.  It is quite liberating, right up there with growing something out of the ground that sustains you. Which is why today I posit that active trading is an art.

No indicator guarantees success.  The last month or so, I have demonstrated my systematic approach to forming a bias, and that systematic approach has been dialed in.  It has kept me on the right side of the tape, and with that approach and the rest of my tool kit I have been extracting NASDAQs from the financial complex quite well.  Yet, at the same time, I have internet people giving me grief that my indicators don’t work.  They work just fine.  These people are not making a beautiful performance of their trading.  This is something I cannot teach.

None of us control how the market behaves.  It pops and drops and marks time.  There is no such thing as good or bad, the market simply is.  It is a numeric representation of the net interactions of hundreds-of-thousands of humans and the algorithms they have built to execute their human ideas.  The entire existence of all of this is completely intangible, a collective conscious that we do our best to measure.  How one interacts in this environment is an art.  Are they playful and light?  Or is the market rigged?  Choose your beliefs carefully.  They will tint every observation you see.

We only control our own reasoned choice.  What we choose to take in, what we ignore, and how we interpret that data is something we have power over.  Whether or not we position our capital into or out of a position is a reasoned choice.  The reasons behind our actions are art.  Are your impressions swayed by the words or actions of others.  That is hardly creative.

I blog to demonstrate a repeatable approach to trading and to offer clarity along the way.  My reasoning is simple.  I was new once and had to wade through this mess of online gurus to find real insight from real people who actually trade.  It sucked.  I paid lots-and-lots of money to phonies, money that would have been better spent on pole barns or solar panels.  To learn to trade you must trade.  And to trade well is an art.

That’s all I am in the mood to write today.

Raul Santos, October 13th, 2019

Exodus members, the 256th edition of Strategy Session is live.

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NASDAQ springs higher overnight, coming into Friday up a quick +80, here is the trading plan

NASDAQ futures are coming into Friday pro gap up, trading at a new 12-day high after an overnight session featuring extreme range and volume.  Price worked higher overnight, trading up into the 09/24 range, prices unseen for nearly three weeks before settling into balance.  As we approach cash open, price is hovering just up above the tips of responsive seller excess highs printed on 09/25 and 10/01.

On the economic calendar today we have University of Michigan’s primary October reading of sentiment at 10am.

Yesterday we printed a normal variation up.  The day began flat then with buyers spiking price higher shortly after the open, closing the Monday open gap.  After a tight flag buyers took the market range extension up, trading up near Monday’s high before discovering responsive sellers and trading back to the daily mid.  Price chopped along the mid for a bit before sellers made a try lower.  Their attempt was thwarted, and before they could make a new low-of-day (nLOD) a sharp excess low formed and we rallied up into the upper quadrant of the session before day’s end.

Heading into today my primary expectation is for a gap-and-go higher, trading up to 7890.75 before two way trade ensues.

Hypo 2 stronger buyers sustain trade above 7890.75 and tag the 7900 century mark.  A battle ensues here with buyers ultimately prevailing and continuing higher.  Stretch targets are 7914.25, 7920 and then 7942.25.

Hypo 3 sellers defend their 09/24 conviction selling, pressing into the overnight inventory and reclaiming Thursday high 7786.25.  This sets up a gap fill down to 7761.25.  Look for buyers down at 7730.25 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

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NASDAQ up a quick +60 into Wednesday, here is the morning trading plan

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring extreme range and volume.  Price worked down through the Tuesday low briefly overnight before rallying up near the cash session’s highs.  Eventually price balanced out above the Tuesday midpoint.  AS we approach cash open, price is attempting to break down-and-away from that overnight balance, and is floating just above the Tuesday mid.

On the economic calendar today we have Fed Chairman Jay Powell taking part in a listening event over in Kansas at 10:30am along with crude oil inventories at the same time.  At 1pm there is a 10-year note auction then at 2pm the FOMC minutes.

Yesterday we printed a neutral extreme down.  The day began with a gap down and drive lower, trading down into the upper quadrant of last Thursday’s trend up before coming into balance and rallying higher.  The rally took price up near the Monday low before sellers again stepped in and worked price lower, eventually pushing us to a new low-of-day and into a neutral print.  Closing on the lowers sealed the deal as a neutral extreme down.

Heading into today my primary expectation is for sellers to poke down into the tape, trading down to 7666 before finding buyers who work price up through overnight high 7719.  Price continues higher, closing the open Monday gap at 7739.25 before two way trade ensues.

Hypo 2 sellers work a full gap fill down to 7622 then continue lower, down through overnight low 7604.  Look for buyers down at 7600 and two way trade to ensue.

Hypo 3 stronger sellers press price down to 7560 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

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