I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
2,892 Blog Posts

Stocks Recover Morning Weakness after Hawkish Comments from Yellen

The reflation trade continues to thrive Tuesday despite hawkish commentary from Fed Chair Yellen during her visit to the Senate banking panel.  Yellen spent much of her time making sure investors knew the March 15th meeting is live.  Despite her hawkish tone, traders at the CME are only pricing in a 17% chance of a rate hike when the Fed next convenes:

Her testimony hit the bond market and sent stocks higher after US markets got off to a weak start Tuesday morning.  Inside Exodus, courtesy of the Risk Appetite index, we can see the wide-reaching effect of her statements—investors are shifting away from debt:

Meanwhile banks are celebrating the prospects of higher rates as well as the discussions surrounding Dodd Frank.  While Yellen deflected several Senatorial attempts to digress into a political discussion, she demonstrated an open mind revising the legislation.

Turning your attention to the complications of the market, it’s inner workings, there was a capitulation sell algo strike on the NASDAQ at 11:06am that coincided nicely with the turn:

Overall, the tape is bullish, and continues to be bullish despite Yellen striking a hawkish tone today at the Senate.  What does that tell you?  It tells me investors expect the new administrations tax and trade reforms to have a more significant impact on the business climate than the rate hikes by the Fed.


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Investors Continue To Love The NASDAQ; All-time Highs Holding Going into Valentine’s Day

NASDAQ futures are coming into Tuesday flat after an overnight session featuring normal range and volume.  Price held above the Monday midpoint and inside Monday’s range overnight on balanced trade.

On the economic calendar, beware Janet Yellen speaking to the Senate Banking Committee at 10am.  We also have a 4-week T-bill auction at 11:30am.

Yesterday we printed a double distribution trend up.  The week began with a gap up and buyers were eager to drive price higher off of it.  Price worked higher, up through open air, tagging the Exodus Strategy Session measured move target before finding some responsive selling and settling into two-way trade.

Heading into today my primary expectation is for buyers to work up through overnight high 5261 and continue to probe higher, up through Monday high 5261.50.  No upside targets exist.

Hypo 2 sellers push down through overnight low 5252.25 and work lower to 5234.50 before two way trade ensues.

Hypo 3 stronger sellers close the weekly gap down to 5227 before two way trade ensues.


Volume profiles, gaps, and measured moves:

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More Selling Pressure in Nvidia; Target Achieved

Last week a short-term trade opportunity arose in Nvidia Corp after earnings prompted a sharp sell.  Large rotations are rarely a one-off experience, and with the help of our good friend Leonardo Fibonacci we can establish and shoot for a target in a simple manner.


Nvidia has had an incredible run over the last few years, and while a bit of selling pressure is coming into the name, the long term chart has a long way to go before it merits reason for concern.


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Option Expiration Week Begins With New Highs

NASDAQ futures are coming into the week gap up after an overnight session featuring normal range and volume.  Price worked higher overnight, mostly after 6:30am.  Before then it was balanced.

The economic calendar is light to start the week–only a 3- and 6-month T-bill auction on the docket, both at 11:30am.

US markets worked higher last week, across the board.  Here is the performance of each major index last week:


Last Friday the NASDAQ printed a normal variation up.  Price opened gap up, just above the Thursday high.  Sellers worked down into the the gap, closed it, revealed buyers and we spent the rest of the day auctioning higher.

Heading into today my primary expectation is for buyers to probe higher into open air.  Look for sellers up at 5261.50 if we tag it.

Hypo 2 sellers press into the overnight inventory and close the gap down to 5227.  This sets up a move to take out overnight low 5226.75.  Look for buyers just below at 5224.75.

Hypo 3 strong selling moves in, sustains trade below 5223.25 setting up a move to target 5210.



Volume profiles, gaps, and measured moves:


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iBC Labs Is Once Again Bullish

Greetings and hello from the battery room inside Exodus.  All systems are calibrated, the furnaces are filled with coal, and the cogs greased.  Upon incorporating the data generated last week by billions of dollars’ worth of trades into the working auction theory model, a bullish signaling was generated.

If you recall, the model ran bullish for four consecutive weeks, then flipped neutral last week.  Now it is firmly entrenched in the bull camp, prepared to saunter higher at an aloof rate while underlying stocks occasionally explode higher.

Interestingly, as Fly noted yesterday, Exodus is dialed into the market well right now—spotting its opportunity in a flawless manner.  Had you simply adhered to the signalling inside Exodus, you wouldn’t have grown skeptical of the market last week, like me.

However, and in part thanks to the hybrid scoring system inside Exodus, my foray into shorting the market last week came to a sudden end Thursday when the bull snorted and heaved higher.

The only problem is I raised come cash on Monday.  Said funds will need to be reallocated.  This will not be easy at these elevations.


iBC Labs is back to bullish heading into OPEX week.  Look for a shakeout early on, but by Wednesday bulls assert their dominance.


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Sellers in Control of Nvidia, Despite Strong Tape

Quick look at the chart for $NVDA.  Sellers dominated the resistance levels they were supposed to and the likely rotation from here is lower.  A softening of the tape early next week could help, but either way this ticker looks weak short term.



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Onward and Upward: NASDAQ Continues To Stroll Higher

NASDAQ futures are coming into Friday gap up after an overnight session featuring normal range and volume.  Price worked higher overnight, achieving new highs before settling into two-way trade.

The economic calendar is light as we wrap up the week.  At 10am we have U of Michigan Confidence, at 1pm the Baker Hughes rig count, and at 2pm a Monthly Budget Statement.

Yesterday we printed another double distribution trend up.  After opening flat a strong buyer drove the market higher in the morning and buyers continued bidding the market, turning initiative in the afternoon and pressing value higher before two way trade ensued.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 5212.  From here we take out overnight low 5209.25.  Look for buyers down at 5194 and two way trade to ensue.

Hypo 2 buyers press up through overnight high 5227.25 and continue exploring higher prices.

Hypo 3 strong sellers press down through 5194 and sustain trade below it setting up a move to target the open gap at 5191.25 then 5189.25.  Stretch target is 5175.75.



Volume profiles, gaps, and measured moves:


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Ben Kallo Is Buying Tesla Shares Ahead of Earnings in a Very DGAF Manner

Ben Kallo is a smart feller and loyal disciple to the venerable Elon Musk (all Praise and Glory to The Leader) and the man had some good things to say about Tesla heading into earnings this morning, see below:

Baird analyst Ben Kallo said he is a buyer of Tesla shares ahead of Q4 results, which he believes will be another de-risking event for the company. Although he said there could be short-term noise as expectations are calibrated, he recommends owning the shares. He expects an update on the Model 3 and Gigafactory production ramps, which he believes will drive the shares higher. Kallo reiterated his Outperform rating and $338 price target on Tesla shares.

And just like that, with a stroke of his analyst pen, the stock surged higher Thursday.  $TSLA is set to report earnings February 22nd after market close.

Kallo suggests you make plans now for the post-earnings champagne uncorking and sanctimonious celebration that’s sure to follow.



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NASDAQ Continues To Rally – New Highs Overnight

NASDAQ futures are coming into Thursday flat after an overnight session featuring normal range and volume.  Price worked to new highs briefly, around 6am, before flattening back out.  At 8:30am Initial/Continuing jobless claims data came out mixed.

Also on the economic docket today we have Wholesale Inventories at 10am and a 30-year bond auction at 1pm.

Yesterday we printed a double distribution trend up.  A gap down was sold early on but quickly formed an excess low suggesting the presence of strong responsive buying.  We then rallied up through the Tuesday high and sustained above it.  A late-day ramp higher was faded.

Heading into today my primary expectation is for sellers to press into the overnight inventory and close the small gap down to 5191.25 then continue lower through overnight low 5186.25.  Look for buyers down around 5175 and two way trade to ensue.

Hypo 2 buyers continue exploring higher prices, take out overnight high 5201.75 and probe higher.  Open air.

Hypo 3 stronger sellers trigger a liquidation down to 5157.75 before two way trade ensues.



Volume profiles, gaps, and measured moves:


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A Closer Look at The Inner Workings of The Market, Up Here at All-Time Highs

Not many spend time to understand the complications of the stock market—all the small mechanics behind price and time.

Today they tell a story of health and virility.

But that small slip lower we experienced last week followed by an overexertion from the bull, el toro, created context, or a story, that merited exploring a short bias.

Leaning short was effective several times this week, intra-day.  Yet we pressed higher.  When we came into my favorite Fibonacci extension, which is a fun place for algos to run stops, the level became a last stand for short sellers.

Sellers either defend the level or lose the first full week in the second full month under our new Authoritarian Regime.

It made sense to also go swing short, so I put some QID on the books.


The market confirmed it was a decent entry.  We sold off on Tuesday from those levels.

But alas, here we are, lingering above my Fibs.  And the longer we do, the more likely this leg of the rally is the real deal and not just a petty stop run.


So my bias intra-day keeps pivoting.  This afternoon it was long.

The complications, the context, the story—whatever you want to call it, can form an objective set of observations for making market decisions.  Presented with the right facts, any one of you could make the right decision.

Just for fun I ran through all my afternoon observations over on the old snapchat.  Check it out if you want, username vCali.

Disclaimer: lots of random stuff on my snap story too

I’m keeping the QID to stay swing short the NAS for now, but it’s on its heels.


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