iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,075 Blog Posts

Spooky week ahead

Hello chaps. I must be brief. I have been playing from behind all morning because first of all insomnia plagued your dear pal Raul last night. I fell asleep next to the fire after a generous portion of FISH MEAT. Only to shoot back into consciousness, fully erect and energized at 3am. Managed to re-sleep around 6am only to be jolted back into wintery existence at 8am. Then it was a quick pony tail and over to pick up elder raul for a ride up to dear aunt raul’s to make a facetime to aunt raul in the old country.

Aunt raul in the old country is holding it down. Chopping wood on the mountain side and baking breads. Living real remote like, pretty freaked out about the covid and foreigners. Italians crack me up. I like to unsettle them by telling them I am coming soon but that when I arrive I intend to work. I cannot sit around taking cafe all day by a fire. I need to work. To build something otherwise I’ll be likely to take up my dream vocation of trafficking Moroccan hashish by way of a hyper-tuned motorcar.

Anyhow I need to be brief. I managed to find my way onto a whitelist for a hoverboard NFT and by golly I am doing my best not to drop the ball like I normally do. These discord junky gen-zers keep getting the jump on me and I am tiredt of it.

Spooky week ahead and I think it kicks off with a rally. A two-and-a-half day rally right up into the FOMC announcement. Then an ekg burst. Then we don’t know.

What we do know is a quad-witching looms on the calendar Friday. The ghosts of xmas past,present, future and the metaverse are all coming to grab us by the neck and press our noses suffocatingly into our folly. Jolly.

Then the year is pretty much over.

I am hecking bullish by the way. Imagine having a strong statistical conviction that the low of the month is in. How would you behave?

Hopefully by spreading cheer for all to hear.

Ho ho ho.

Raul Santos, December 12th, 2021

And now the 368th edition of Strategy Session. Enjoy:


Stocklabs Strategy Session: 12/13/21 – 12/17/21

I. Executive Summary

Raul’s bias score 3.05, neutral. Rally through Wednesday morning. Then look for third reaction the FOMC announcement to dictate direction into the second half of the week.

II. RECAP OF THE ACTION

Choppy and flat early Monday before a late-day rally. Pro gap up Tuesday. Most everything held the pro gap for the rest of the week, closing on a strong note, except for the Russell which faded into the weekend.

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

Rotational Report:

All sectors pinned higher after being pinned lower two weeks back. Key Tech sector leading higher. Utilities and staples a bit stronger than bull like to see while discretionary was sort of in the middle of the pack.

slightly bullish

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

Concentrated Money Flows:

The bullish skew fifteen weeks back was negated four weeks ago. Then we had three consecutive weeks of heavy sell flows, with two weeks back being the most extreme we’ve seen yet.

Last week the ledger skewed slightly negative, but we saw a nice pocket of semiconductor groups on the positive side of the ledger.

neutral

Here are this week’s results:

III. Stocklabs ACADEMY

Quad-witching, expect shenanigans

Consider the upcoming week to be pretty much year-end. There are likely to be fewer participants even this week as folks log off for some holiday relief.

That said, the tape could be thin and vulnerable to big moves. We had the Fed announcement Wednesday and by Thursday we’ll likely set direction into the weekend. Friday could be full of shenanigans or the prevailing drift of late Wednesday could carry into the weekend.

We don’t know.

But this context is not the type to press too aggressively.

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:

Rally through Wednesday morning. Then look for third reaction the FOMC announcement 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]:

Ether has clear reading, the others are not discovery down

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 in balance, the more order flow energy to push the discovery phase.

Market are most often in balance.

Every week this newsletter uses auction theory to monitor three instruments, the Nasdaq Transportation Index and the PHLX Semiconductor Index. Readers are encouraged to apply these techniques to all markets.

Transports could be settling into an old range zone. Or with how they held the Fibonacci retrace, they could be setting a higher-low in a continued discover up phase.

See below:

Semiconductors could be in a sloppy discovery up, or balance. We can clearly see that it is not in discovery down.

Ether will be monitored going forward as a third contextual component. The ethereum network currently has a market cap just under $500B. The PHLX is about $3.5T. Therefore while we analyze ether alongside semiconductors, we ought to give more contextual weight to semiconductors than ethereum.

Ethereum is showing a clear balance. See below:

V. INDEX MODEL

Bias model is neutral for a second week after signaling Bunker Buster two reports back. The Bunker Buster before the most recent one was forty one weeks ago.

Heading into the second full week of December neutral. No bias.

Here is the current spread:

VI.12 month Hybrid Oversold

On Wednesday, December 1st Stocklabs went hybrid oversold on the 12-month algo. This is a bullish cycle that ends Wednesday, December 15th end-of-day. Here is the performance of each major index so far:

VII. 3 month Hybrid Overbought

On Wednesday, December 8th Stocklabs went hybrid overbought on the 3-month algo. This is a bullish cycle that ends Wednesday, December 22nd end of day. Here is the performance of each major index so far:

VIII. QUOTE OF THE WEEK:

“I never look back, except to find out about mistakes…I only see danger in thinking back about things you are proud of.” – Elisabeth Noelle-Neumann

Trade simple, study past performance

Comments »

Gap down in range ;-) here is Thursday NASDAQ trading plan

NASDAQ futures are coming into the second Thursday in December gap down after an overnight session featuring extreme range on elevated volume. Price poked up through the Wednesday high shortly after the close yesterday. Since then it has been slowly rotating lower. At 8:30am jobless claims data came out much better than expected (through seasonality factors may attribute) and as we approach cash open price is hovering along the Wednesday midpoint.

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

Yesterday we printed a normal variation up. The day began with a slight gap down in range. Sellers drove lower off the open, driving down near the midpoint, then they held the mid and made a second attempt lower but failed. This set up a gap fill and poke up beyond the Tuesday high. This was met with sharp selling and price faded down through the mid. Price chopped along the bottom-side of the mid until about 11:15am but could not take out initial balance low. Instead buyers pivoted the mid during New York lunch and just before 2pm we were range extension up. There was one last check back tot he mid before a rally into the bell.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 16,381.75. From here buyers continue higher, tagging 16,459.75 before two way trade ensues.

Hypo 2 stronger buyers tag 16,500.

Hypo 3 sellers press down through Wednesday low 16,251.50 setting up a tag of 16,200.

Levels:

Volume profiles, gaps and measured moves:

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NASDAQ pro gap up // here is Tuesday trading plan

NASDAQ futures are coming into the first Tuesday in December pro gap up after an overnight session featuring extreme range and volume. Price shot higher overnight starting around midnight New York and continuing to rally until about 4:30am. Said rally sent price back up into last Wednesday (12/1) range, and as we approach cash open price is holding a tight balance above that day’s midpoint.

On the economic calendar today we have a 3-year note auction at 1pm followed by consumer credit at 3pm.

Yesterday we printed a double distribution trend up. The day began with a slight gap up in range. Sellers resolved the gap with an early drive lower that also managed to tag the Friday volume point of control but failed to take out the Friday low. Instead a sharp responsive buy hit the tape and after a battle along the mid sellers made an attempt lower but failed again. This triggered a strong move higher before 10:30am. Then we fell back to the midpoint. Buyers held the mid twice setting up a run at range extension up. This move held and we chopped along the high into the close.

Heading into today my primary expectation is for buyers to gap and go higher, tagging 16,200 before two way trade ensues.

Hypo 2 stronger buyers tag 16,316.75.

Hypo 3 sellers work a gap fill down to 15,832.75.

Levels:

Volume profiles, gaps and measured moves:

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Small gap down into first full week of December // here is Monday NASDAQ trading plan

NASDAQ futures down about -40 heading into Monday after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing along the lower quadrant of Friday’s range until about 4:30am when a hard sell pushed into the market. Said sellers stalled before taking out the Friday low. Since then we have flagged below the balance that occurred during the early part of the Globex session. As we approach cash open price is hovering in the lower quad of Friday’s range.

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

Last week featured a gap up and rally all day Monday. There was some sustained rallying early Tuesday before a sharp sell hit the tape late Tuesday morning. Wednesday was sort of choppy early on, then there was a hard fade lower into the close. Thursday was choppy ahead of a strong trend lower Friday.

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

On Friday the NASDAQ printed a trend down. The day began with a slight gap up. After an open two way auction buyers made a brief test up beyond Thursday high. Sellers stepped in and rejected a move up beyond Thursday high, setting up a quick gap fill and drive down through Thursday low. Sellers continued lower, effectively closing some gaps we left behind on 10/26 (nearly to the tick) and 10/27. There was a ramp off the lows into the bell.

Heading into today my primary expectations is for buyers to work into the overnight inventory and close the gap up to 15686.50. From here buyers continue higher, tagging 15,885 before two way trade ensues.

Hypo 2 sellers take out overnight low 15,592 and campaign down through Friday low 15,538. Look for buyers down at 15,500 and for two way trade to ensue.

Hypo 3 stronger sellers tag 15,394.50 before two way trade ensues.

Levels:

Volume profiles, gaps and measured moves:

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Watches will be stolen and that is okay

Really quick note and then I need to prepare for opening bell. This was my second time in Miami for Art Basel and I was again confronted by obscene crypto wealth. This time it was fewer lambos with custom bitcoin paint jobs, more chaps with jewelry. So a bit of a step down maybe. Nevertheless money was being flaunted and to be honest, being flaunted by dudes I could easily twist into a pretzel.

Note—this is not my nature. I have no interest in harming anyone. But I also couldn’t care less about protecting these folks either. That is not my job.

My job is to extract as many fiat american dollars as possible from the global financial complex. Said dollars are to be converted into real goods like greenhouses and pole barns that aide me in my quest to feed as many humans as possible delicious fruity snacks.

So when a report surfaced online that two crypto bros had woken up in their hotel rooms beaten and relieved of their fine watches and other valuables by some hot Russian women (and perhaps some bowler hat wearing comrades) all I could think was, of course. Similar attackes happened in the financial markets at about the same time. The crypto futures markets were manipulated while Sam was on an airplane and many others were taking their favorite chemicals and disco dancing, liquidating many a leveraged account.

You/we could cry foul, assume a victim mentality, and ask for help from the shitheads at the SEC or some other authority assumed to be helpful. Or we can chalk it up as a learning experience and stick to the game. A game that jades sometimes but rewards humility in spades.

I’m from Detroit. The last thing we do here is show wealth. That’s a recipe for having your life challenged. We drive beat up whips and wear work clothes. There is no sense standing out. Blend in. Extract wealth. And by living this way we never need to feel the like we need to keep a gun on our person like a little trashy bitch.

Alright for now.

Raul Santos, December 6th 2021

Now here is the 367th strategy session, enjoy:


Stocklabs Strategy Session: 12/06/21 – 12/10/21

I. Executive Summary

Raul’s bias score 2.35, medium bear. Equities are choppy but stabilize early in the week, perhaps after a brief test lower and then rally into the weekend.

II. RECAP OF THE ACTION

Gap up and rally Monday all day long. Some sustained rallying early Tuesday before a sharp sell hit the tape late morning Tuesday. Wednesday sort of choppy early on, then a hard fade lower into the close. Thursday choppy before a strong trend lower Friday.

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

Rotational Report:

All sectors pinned lower except Utilities. Full-on risk off move.

bearish

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

Concentrated Money Flows:

The bullish skew fourteen weeks back was negated three weeks ago. We’ve had three consecutive weeks of heavy sell flows, with last week’s being the most extreme we’ve seen yet.

bearish, but nearing excessive

Here are this week’s results:

III. Stocklabs ACADEMY

Enough pity, back to work

In the past I have nailed the move from RCS to bunker buster for a huge victory on a short. This time I didn’t. Lessons were learned. Humility gained. Will be better for it next time. At least I’d better be.

Now IndexModel is neutral and Stocklabs is oversold. It is time to start working the long side of the tape, perhaps by Tuesday or even late Monday we could set a tradeable low.

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:

Equities are choppy but stabilize early in the week, perhaps after a brief test lower and then rally 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]:

Seeing all three states at once

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 appear to be in a short term discovery down phase inside an intermediate term discovery up phase. The next likely thing I expect to see is a bounce, and then perhaps a new balance form.

See below:

Semiconductors appear to be holding range/balance along the highs.

V. INDEX MODEL

Bias model is neutral after signaling Bunker Buster last week. The Bunker Buster before the most recent one was fourty weeks ago.

Heading into the first full week of December neutral. No bias.

Here is the current spread:

VI.12 month Hybrid Oversold

On Wednesday, December 1st Stocklabs went hybrid oversold on the 12-month algo. This is a bullish cycle that ends Wednesday, December 15th end-of-day. Here is the performance of each major index so far:

VII. QUOTE OF THE WEEK:

“It can ruin your life only if it ruins your character.” – Marcus Aurelius

Trade simple, keep working

Comments »

Rate hike pushed out to September // Powell, consumer confidence on deck // here is Tuesday NASDAQ trading plan

NASDAQ futures are coming into the final day of November gap down in range after an overnight session featuring extreme range and volume. Price ticked up beyond the Monday high around 9:30pm New York Monday evening and then fell down through the Monday midpoint on heavy selling that lasted until about 1am. Sellers weren’t able to take out the Monday low, instead price stablized after returing to the Monday midpoint. Around 4:30am Fed fund futures over at the cme indicated that participants were no longer expecting a July 2022 rate hike, pushing the expectation of a 25 basis point hike out to September:

At 9am case shiller home price index came out in line with expectations, and as we approach cash open price is hovering above the Monday midpoint.

Also on the economic calendar today we have Chicago PMI at 9:45am and then consumer confidence at 10am. Also at 10am Fed Chairman Powell is set to speak. Then at 11:30am there is a 52-week T-bill auction.

Yesterday we printed a double distribution trend up. The day began with a gap up near the Friday high, leaving some of the panic of Friday down in the hole. There was a two-way battle for the first few hours. Buyers made an early surge towards the Friday high and stalled just before taking it out. Price fell down through the mid but could not go range extension down. Instead buyers heaved price to a range extension up and out of the Friday range. This triggered a rally that checked back to the scene of the omicron news, paused then continued higher, trading up beyond last Tuesday’s high as we chopped along the high into the close.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 16,402.25. From here buyers continue higher, taking out overnight high 16,441. Look for sellers up at 16,459 and for two way trade to ensue.

Hypo 2 stronger buyers trade up to 16,500 before two way trade ensues.

Hypo 3 sellers press down through overnight low 16,238.50 setting up a move down to 16,200.

Levels:

Volume profiles, gaps and measured moves:

Comments »

NASDAQ nearly erases omicron losses // here is Monday trading plan

NASDAQ futures are coming into the second-to-last day in November up a quick +180 after an overnight session featuring extreme range and volume. Price drove higher Sunday evening and then balanced for several hours, balancing along the upper quadrant of Friday’s range. As we approach cash open price is hovering along the overnight high.

On the economic calendar today we have pending home sales at 10am followed by 3- and 6-month T-bill auctions at 11:30am.

Last week we saw an early Monday rally to record highs faded aggressively the rest of the day. Then continuation selling Tuesday. Relief rally Wednesday (into Thanksgiving). Covid-variant news hits tape very early Friday morning and price trended lower into the weekend.

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

On Friday the NASDAQ printed a trend down. The day began with a gap down into the Wednesday midpoint. After a test higher failed to close the overnight gap sellers stepped in and began driving lower, effectively taking out the weekly lows by about 11am. Then there was a brief bounce before sellers continued pressing the tape lower, effectively closing us on the lows during the shortened holiday session.

Heading into today my primary expectation is for buyers to gap-and-go higher, tagging the omicron gap up at 16,358.50 before two way trade ensues.

Hypo 2 buyers stall out around 16,300 and two way trade ensues.

Hypo 3 sellers press down to 16,100 before two way trade ensues.

Levels:

Volume profiles, gaps and measures moves:

Comments »

Circling the wagons

I was jarred awake around 3:33am by a dream about an ultra-violent storm. I’ve noticed the ferocity of natural disaster dreams have become more visceral as I grow older. It’s funny, I often quip that elder Raul will, “put the fear of a 40mph wind in you.” That surly old Italian is ornery and always looking at trees like they’re gonna fall. The winds in my dream have a real pressure to them. Maybe I’m having little strokes in my sleep.

We don’t know.

What we do know is early Friday morning the royal ‘they’ hit the newswires with a new covid-19 variant out of Africa. I am still super skeptical we needed to do all this pandemic cosplay to begin with. Before I lose you to this divisive topic, let me go back to one more fact and then I’ll do one more joke and then we’ll move on. Fact—Bill Gates goes on Netflix in 2019 on a show called Explained and warns that we are hella not ready to handle pandemics. And then bing-bang-boom, a pandemic whips up. Whatever.

Joke—Friday morning I was so shook, for a variety of reasons, that I was finally motivated to go have my booster shot. Pfizer. Got a 6pm appointment at the nearest CVS. Smoked reefer on the way and didn’t wear a mask during the jabbing. Wore a sweater with nothing underneath so I had to reveal ma belly to the pharmacist. Because the whole thing is so absurd. I only did the original inoculation because my yoga studio required it. My favorite mountain resort (revelstoke) now also requires proof of vaccination. They got me with the passport feature. Prior to these restrictions, and mind you I life like a mad degenerate sex fiend, I didn’t take any medicines. Not even a multivitamin. I grow and cook super freaking healthy food and consume a lot of it. It’s like feeding a team of horses and rabbits. I eat 7-to-20 times a day, from a giant food bowl of vegetables. Lately I eat eggs like a snake, 4-to-9 eggs per week. And enough cheese and ale to make a monk blush. I haven’t had fish meat in a while because I just haven’t bothered to pick any up. The only drugs that make it into this body are reefer, caffeine, hootch, and the occasional LSD or mushing room.

But now my body is tainted with the covid inoculations. Made my odor shift from brine to sweet. My cock is an absolute deviant, demanding relief at least 4x per day. My hair and beard are going down past my neck like Rumpelstiltskin, and strangers on the internet are telling me my heart is going to explode any minute.

Will it? Again, we don’t know.

What I do know is that dream brought me to attention, and I sat down and started looking at 30-year charts of Apple and Microsoft. I am very frustrated with myself. For weeks, weeks, 18 weeks…I waded through signal after signal from the IndexModel, which has been sending out bearish signals way more than usual since the Stocklabs fundamental score came to life. And I’ve been writing about it in my diary. About how maybe I need to tweak the system, but that I’d better stick with it for now. And I stuck with it, right up until last week. Last week I intervened because it was Thanksgiving. And the fucking sentiment of a big american family meal fucked me out of a good trade that I needed.

Listen, actively trading is so simple but it can be also fucked. Opportunities are slim. Over-trading is the enemy. Doubting yourself and your process is certain death.

Heading into next week we have a Bunker Buster. This signal hasn’t fired in a long time but it did today. My play is to not trade these weeks. Instead I focus on accumulating my absolute highest conviction long-term investments.

What are those?

Good question. I will be asking that of myself all week. But first I will flush out some of the low-conviction stuff I’ve been holding. Then I will redeploy. All this whilst traveling down to Miami to nerd out with the NFT nerds.

Winter is here.

Raul Santos, November 28th 2021

And now the 366th edition of Strategy Session. Enjoy.


Stocklabs Strategy Session: 11/29/21 – 12/03/21

I. Executive Summary

Raul’s bias score 2.28, medium bear*. Price accelerates to the downside early in the week, perhaps fueled by commentary out of Fed Chairman Powell Tueday morning. Eventually look for the markets to form a sharp, tradable low and rally into week’s end. Non-farm payroll data due out Friday might be what ultimately pivots price higher.

*Bunker Buster triggered, see Section V.

II. RECAP OF THE ACTION

Early Monday rally to record highs is faded aggressively the rest of the day. Continuation selling Tuesday. Relief rally Wednesday (into Thanksgiving). Covid-variant news hits tape very early Friday morning and price trends lower into the weekend.

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

Rotational Report:

Key sectors leading to the downside.

bearish

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

Concentrated Money Flows:

The bullish skew thirteen weeks back was negated two weeks ago. More strong sell flows last week.

slightly bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Absolutely kicking myself

I can be my worst critic, and rightfully so when I commit errors that jeopardize my livelihood. I have been plagued by overconfidence my entire trading career. It is most often after things go well that I lose discipline.

Change is hard. The older I become, the more empathy I have for this struggle. We switched from Exodus to Stocklabs a little over a year ago, but the real switch in the data happened August 1st. That is when the fundamental score came back to life after being pegged at 3.2 for 23 weeks.

It resulted in IndexModel generating way more bearish signals than it ever had. I am still unsure what to think, which sucks big time.

While all this data gathering and weekend researching may seem odd and low-value-added to most readers, it has been my rock. It give me the confidence to enter an arena with the most sophisticated and resource-rich competition in the world.

However losing confidence in it is a slippery slope.

I stuck to the system all the way up until last week (last week’s Section III title: “human intervention”). And then last week happened, and I am absolutely furious with myself.

Something has to change. Or maybe nothing needs to change at all.

One thing is clear—emotionally I am not in the place I need to be to work with my normal risk.

I raised a bunch of cash Friday. Probably selling into the proverbial hole. I am totally fine with that. I know where I am emotionally and I need to figure some things out before I start running hot.

This week we have a bunker buster. This has always been a difficult signal for me to trade. It calls for an acceleration to the downside that eventually results in a tradeable low. I find it is best to spend these weeks accumulating long-term positions.

Therefore my plan is to retool my portfolio a bit. I have cash to deploy. I have leverage I can deploy. But first I feel the need to purge, and then I will circle the wagons around my absolute top conviction tickers.

I’ve never done well trading/investing in too many things at once. It’s all fine and dandy until the entire risk universe goes risk off. Then you’re scrambling around like a lunatic.

Fortunately I am not spread out too much right now, but I will say I am spread out too much.

Time to circle the wagons, clarify my research, and dial back into trading the NASDAQ extremely well—but no active trading this week.

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:

Price accelerates to the downside early in the week, perhaps fueled by commentary out of Fed Chairman Powell Tueday morning. Eventually look for the markets to form a sharp, tradable low and rally into week’s end. Non-farm payroll data due out Friday might be what ultimately pivots price higher.

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]:

Still looks like discovery

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 about -500 points off their high and coming into an old resistance zone. Primary expectation is for buyers to defend this region and for discovery up to continue.

See below:

Semiconductors are off the highs but still appear to be in discover up.

V. INDEX MODEL

Bias model is signaling Bunker Buster. The last Bunker Buster was thirty nine weeks ago.

Bunker Buster calls for an acceleration of volatility that eventually concludes with a sharp low being printed that holds for several weeks.

Here is the current spread:

VI. QUOTE OF THE WEEK:

“What matters to an active man is to do the right thing; whether the right thing comes to pass should not bother him.” – Goethe

Trade simple, trust the process

Comments »

Economic data rattles the early tape // here is Wednesday NASDAQ trading plan

NASDAQ futures are coming into the final day before Thanksgiving down about -115 after an overnight session featuring extreme range and volume. Price was balanced overnight, balancing along the Tuesday midpoint until 8:30am when a slew of economic data hit the tape. GDP came out in line with expectations. Durable goods order slightly below the low end of expectations. Jobless claims better-than-expected. As we approach cash openprice is hovering in the lower quadrant of Tuesday’s range.

Also on the economic calendar today we have new home sales and consumer sentiment at 10am followed by crude oil inventories at 10:30am. Then the FOMC minutes are due out at 2pm.

Yesterday we printed a normal variation down. The day began with a gap down below range. After a brief test lower buyers drove into the gap and closed it. Sellers rejected a move back into Monday range shortly thereafter setting up a selloff that lasted through to mid afternoon. Buyers stepped in ahead of last week’s low, down in the lower quadrant of Monday’s range and we ramped higher for the rest of the session, eventually crossing the mid and closing above it.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 16,268.75. Buyers continue higher, taking out overnight high 16,356. Look for sellers up at 16,371.50. Then look for the third reaction to the FOMC minutes to dictate direction into the close.

Hypo 2 sellers press down through Tuesday low 16,118. Look for buyers down at 16,100. Then look for the third reaction to the FOMC minutes to dictate direction into the close.

Hypo 3 stronger sellers tag 16,041.75. Then look for the third reaction to the FOMC minutes to dictate direction into the close.

Levels:

Volume profiles, gaps and measured moves:

Comments »

Choreographed sell-off abates // here is Tuesday NASDAQ trading pan

NASDAQ futures are coming into this Tuesday before Thanksgiving with a slight gap down after an overnight session featuring extreme range and volume. Price first probed lower overnight, probing down near last Wednesday’s low before catching a bid. Since then we are about +100 points higher and as we approach cash open price is hovering just below the Monday low.

On the economic calendar today we have PMI composite flash at 9:45am, a 2-year note auction at 11:30am and a 7-year note auction at 1pm.

Yesterday we printed a double distribution trend down. The action was methodical, almost appearing choreographed. The day started out with a drive higher. Buyers drove higher for the first 45 minutes, tagging the weekly ATR high band. Before buyers could push a range extension up responsive sellers stepped in and made a hard move down through the midpoint, setting up an early range extension down and gap fill. Seller than continued lower and closed the Thursday gap. Buyers showed up here and began sort of grinding price back towards the mid but they never made it there. Instead sellers made a second leg lower, effectively tagging the weekly ATR low band as we closed out the session.

Heading into today my primary expectation is for buyers to press up through overnight high 16,414.50 before two way trade ensues.

Hypo 2 stronger buyers trade up to 16,459.25 before two way trade ensues.

Hypo 3 sellers press down through overnight low 16,274 setting up a move down to 16,227.

Levels:

Volume profiles, gaps and measured moves:

Comments »