Compression ahead of FOMC announcement, here is Wednesday NASDAQ trading plan

NASDAQ futures are coming into Wednesday gap up after an overnight session featuring elevated range on extreme volume.  Price worked sideways-to-higher overnight, balancing along Tuesday’s midpoint for much of the globex session.  As we approach cash open, price is hovering in the upper quadrant of Tuesday’s range.

On the economic calendar today we have an FOMC meeting announcement at 2pm followed by a Fed Chair press conference at 2:30pm.

Yesterday we printed a normal variation up.  The day began with a gap up that sellers quickly resolved after the open.  Said sellers were met with strong responsive buying ahead of the open gap left behind last Friday morning.  Buyers then worked price to range extension up, traveling up to the Monday midpoint before settling into a chop along the upper side of the daily midpoint.  Late in the session sellers asserted themselves and returned price back down near the lows.

Heading into today my primary expectation is for buyers to drive higher off the open, taking out overnight high 8394 and tagging 8404 before two way trade ensues. Then look for the third move after the FOMC announcement to dictate direction into the close.

Hypo 2 stronger buyers trade up to Monday naked VPOC 8420 before two way chop ensues.  Then look for the third move after the FOMC announcement to dictate direction into the close.

Hypo 3 sellers work into the overnight inventory and close the gap down to 8364.  From here they continue lower, down to 8334.75 before chop ensues.  Then look for the third move after the FOMC announcement to dictate direction into the close.

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring extreme range and volume.  Price worked lower overnight, trading down a few ticks below Tuesday’s midpoint before finding a responsive bid around 6am New York.  Then at around 8:13am Commerce Secretary Wilbur Ross spoke optimistically about finalizing changes to the U.S.-Canada-Mexico trade agreement, sending futures spiraling higher.  As we approach cash open, price is hovering below the Monday midpoint.

On the economic calendar today we have 4- and 8-week T-bill auctions at 11am followed by a 10-year Note auction at 1pm.

Yesterday we printed a double distribution trend down.  The day began with a slight gap down that buyers drove higher into.  Said buying stalled just above overnight high, just after tagging the open gap left behind on the last trading day of November.  From then, onward price rotated lower, suggesting that the conviction sellers spotted on December 2nd were still active and defending their entry.  Price methodically traded lower, closing near low-of-day.

Heading into today my primary expectation is for sellers to press into this trade deal spike, closing the overnight gap down to 8356.25.  From there we continue lower, down to 8330 before two way trade ensues.

Hypo 2 stronger sellers reverse the entire trade deal spike, trading down through overnight low 8297.  Look for buyers down at 8291.25 and two way trade to ensue.

Hypo 3 buyers press up through overnight high 8383.50, working up to 8400.  Look for sellers up at 8404.50 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Monday gap down after an overnight session featuring normal range on elevated volume.  Price drifted lower overnight after briefly trading up beyond last week’s high.  As we approach cash open, price is hovering a few point below Friday’s midpoint.

On the economic calendar today we have 13- and 26-week T-bill auctions at 11:30am followed by 2-year FRN and 3-year Note auctions at 1pm.

Last week kicked off with a slight gap down then a fast drive lower. The drive erased all of the pre-Thanksgiving rally before catching a bid and slowly rotating back near the midpoint.  Tuesday featured a strong gap down and early on it looked as if we may take out November lows.  However a responsive bid stepped in and droev price higher, ending the session just below the Monday low.  Wednesday gap up which was consolidated (sideways) though Thursday, and by Friday afternoon, after a gap up and slow rotation higher, we were right where we started the week off.  The Russell, a bit higher.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a double distribution trend up.  The day began with a gap up and small drive higher.  The move consolidated sideways for a few hours before buyers reasserted themselves, eventually trading a few ticks below the weekly high before ending the week near session high.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 8400 then look for a continued move higher, up through overnight high 8415 before two way trade ensues.

Hypo 2 stronger buyers press up to 8440.50 before two way trade ensues.

Hypo 3 sellers work down through overnight low 8380.50 and continue lower, trading down to 8326 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

This morning I was strolling around one of my favorite neighborhoods in Detroit—savoring the stillness of Sunday morning, admiring the charming urban decay that resides mere blocks away from million dollar estates—and it reminded that none of us truly own land. This particular neighborhood has maple trees that are well over 300 years old. If any living thing were the true owners of said land it would be them. We are merely the keepers, tending to them, shaping them to suit our vision.

That got me to thinking about other things we think we own, shares in immortal entities like Alphabet, Inc (Google parent). All part of the grande illusion I suppose…a system our brains have been trained onto through the use of coinage at one point, coinage now represented as numbers on servers at banks and elsewhere.

It is all enough to make us way out of touch with the real world. The earth. Our decaying bodies.  Then there is this linear concept of time we can so self-righteously perceive. What is time if not just another human earthling perception? Einstein proved time to be a arbitrary human construct with his theory of relativity. But the reality is time is some thing real, and of all the things we don’t own, it is the thing we borrow the least amount of.

Which is why we ought to seek out ways to use our borrowed time to progress ourselves and the society around us.  Will we only leave messy, burnt out, half-assed, half-completed projects in our wake?  Or will there be something tangible for the next humans to build upon and thrive?

And in the meantime are we L-I-V-I-N’?  I have written before that the two most natural human states are resting and making love. Someone countered that “fight or flight” is just as natural.  I disagree.  It may be necessary at times, like in an unprovoked wild animal attack, but human interaction only triggers this necessary response if being in or encountering another living thing in a state of disease. Being diseased (dis-eased) is the symptom of something anything but natural—most often symptoms that arise when humans lose touch with the real world.  Saying fantastic things like ‘it was the will of the gods’ and other nonsense. So while fight-or-flight is innate, and sure…natural, it is nowhere near as natural as making love or sitting still.

Then why am I working right now?  This is my intellectual state.  Is it natural?  Not really.  This inquisitive behavior sort of flickers up when I need to put on my modern living hat and earn fiat American dollars. I like to think we are awakening from these illusions of necessity, these generally accepted social constructs, and in a fragmented sort of way we’re all trying to find our way back to reality. I work enough to participate in the fate of humanity, to progress alongside it as I see fit.

As long as I exist I will strive to help people break free from working more than they sleep or have sex. As for having enough coins to keep bankers from taking my work spaces away, the ones I borrow for now, tending to and improving upon, I will earn just enough fiat American dollars to keep those diseased mongrels away.

Models remain bullish into the second week of the final month of the decade.

RAUL SANTOS, December 8th, 2019

Exodus members, the 264th edition of Strategy Session is live, go check it out!

NASDAQ futures are coming into the week flat after an overnight session featuring extreme volume on elevated range.  Price was balanced overnight, rotating a few points beyond last week’s high before slowly moving down back near the Friday low.  As we approach cash open, we are off the low by about 10 points and flat verses last week’s close.

On the economic calendar today we have ISM employment/manufacturing at 10am followed by both 13- and 26-week T-bill auctions at 11:30am.

Last week we rallied.  We came into the week gap up and drove higher.  The rally extended through Wednesday.  Thursday markets were closed in observation of Thanksgiving.  Friday was a half day and price slowly rotated lower.  The last week performance of each major index is shown below:

On Friday the NASDAQ printed a normal variation down.  The day began with a gap down, down near the Wednesday midpoint.  Buyers made a slight move higher, but were unable to fill the gap.  Instead sellers pressed range extension down through noon.  As the market came to a halt around 1:15pm New York, a slight ramp occurred, sending price back up to the midpoint.

Heading into today my primary expectation is for buyers to work higher, closing the Wednesday gap 8453.75 and trading up through overnight high 8457.25 before two way trade ensues.

Hypo 2 sellers press down to 8400 before buyers step in and two way trade ensues.

Hypo 3 stronger buyers trade up to 8479.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

I am probably going to write about death a bunch this month.  For starters, today in the murder mitten the weather is a particular kind of glum that occurs when a thick grey soup settles the entire sky making the city cement unable to differentiate itself from the sky.  There are no shadows only shades of taupe where the airy pea soup is thinner or thicker.

But before we go into mortality and all the wonderful meditations around it, I want to acknowledge a few readers of this here old Raul blog. Mr. Numbersgame, I have not been ignoring your comments from the You gotta know when to hold’em post.  I intend to read them when I am in the mood to receive the thoughts and give them my full attention.  Thank you for taking the time to write them out.  Mr. Bernankenstein, several weeks you have left comments on the Exodus Strategy Session saying “thank you”  and calling me the Spanish milk.  I appreciate those comments, thank you.

Today is the first day of the final month of this decade so back to death.  As a sit here, near the peak male age of 34, and reflect on all the chances I’ve taken before now, it is a wonder I am still alive at all.  There were times when I would take a chance on something, often feats of physical absurdity, without giving much of any thought to the payoff, or reward, of taking such risk.  Climbing the outsides of ten-story buildings just to take in the view.  Careening down motor highways on a wheeled board with no brakes.  Somersaulting off cliffs into dark waters.  These days I rarely venture out, but when I do it always involves driving because metro Detroit is so grotesquely spread out in every which way. Every drive, especially heading into the madness that is the holidays, features a moment where some kook sickened with the hurrying syndrome, doing the devil knows what on their mobile device, flings their car to-and-fro.  I watch and wonder what could possibly have them some mentally twisted and bent to behave that way?  But as they say, if you see it, you be it.  So perhaps there is a glimmer of myself in these maniacs.  So much rushing, for what? We all end up the same.

It can seem pessimistic to talk about cycling from life-to-death, or it can be seen as a call to action.  To do what matters today, for all people, to ease this human condition, brief as it may be.  To use our reasoned choice and our reasoned choice alone to change the things we can and make them better.  Patient with the long term goals, urgent with short-term execution.  And being kind along the way.

That is all I can think of for now.  Hope your Thanksgiving was nice, that genocide of birds for their meat, makes you wonder who the savages are.

Models are bullish heading into the first week of the last month of the decade.  Cheers.

Raul Santos, December 1st, 2019

Exodus members, the 263rd edition of Strategy Session is live, go check it out!

NASDAQ futures are coming into the last full trading session of the month with a slight gap up after an overnight session featuring normal range on elevated volume.  Price worked higher overnight, tagging a new all-time high. As we approach cash open, price is hovering near the high, above the Tuesday range.

There are several economic events today, all of low impact. Chicago purchasing manager 9:45am, PCE core and pending home sales and 4- and 8-week T-bill auctions at 10am, crude oil inventories at 10:30am, 7-year note auction at 11:30am and Fed Beige Book at 2pm.

Yesterday we printed a normal variation up.  The day began with a slight gap up that was resolved during an open two-way auction.  Buyers eventually stepped in and worked the market range extension up.  The afternoon was spent rotating back to the daily midpoint before a late-session ramp returned price to the day’s high. The overnight stat was never taken out.

Heading into today my primary expectation is for buyers to gap-and-go higher, trading up through overnight high 8430.25 on their way to 8450 before two way trade ensues.

Hypo 2 sellers press down through overnight low 8390.50 before two way trade ensues.

Hypo 3 tight chop from 8405.25 to 8430.25.

Levels:

Volume profiles, gaps and measures moves:

I have little by way of commentary to add to the current economic narrative on this last Sunday in November.  Which is fine, less is truly more when it comes to investing.

The lot of yous would be better off fully investing your portfolios long equities and forgetting the pass codes to your brokerage accounts.  But yet many persist, trying their hand at active management, shorting companies like Amazon and expecting the whole system to revert back to some symbolism of reality they perceive more true than the collective reality demonstrated by Big Tech valuations.

Which is fine, as long as you aren’t a dick.  If you are a dick or jerk or whatever, that is fine too—the final outcome of such behavior ought to be no surprise though.  People will drift away.  Maybe that is fine too.

Oh wow this blog entry has taken a morose turn.  Listen, we are from the school of thought here on the old Raul blog that people are in general good.  And since humanity, despite their blood lust and greed, is in general good, that means their creations will continue to grow.  Big Tech is their most impressive creation to date.

It was not long ago, not long ago at all that World Wars were a thing.  Marching by foot and horse into foreign lands and claiming them as your own.  Now the war is economic.  Which is much less violent but a war nonetheless.  Less blood lust, same greed.  To gain control of foreign lands, all of them.

The war is being won by companies like Microsoft and Google parent Alphabet, Inc.  Because they have no sworn allegiance.  They have a seat at the proverbial “table” without the messiness of being public servants of tyrants.  Their only obliged responsibility is fiduciary.  Economic warfare.  War for moneys.

And while we call the entire notion of money into question with bitcoin and barter systems, there is no denying that this Grande Illusion has served to placate some of the most restless factions of our society.  Money and drugs.

This is all fine.  The economy is strong and owning capital goods like property and stocks and bonds and classic cars is a decent way of participating in the economic expansion.

So as we near the end of the decade, I am inclined to channel my own hedonism into making good food, enjoying spirits with family and friends, and allowing my investments to work while I idle around town spreading holiday cheer.

What is your plan this holiday season?

Final note—models have all flipped neutral into this last, holiday-shortened week of November.  With no systematic reason to push bets, the plan is to scalp key levels and otherwise chill.

Raul Santos, November 24th, 2019

Exodus members, the 262nd edition of Strategy Session is live, go check it out!

NASDAQ futures are coming into Friday with a slight gap up after an overnight session featuring elevated range on extreme volume.  Price worked higher, taking out Thursday high around 10pm New York and sustaining trade above it until about 8:45am when chatter about a China/U.S. trade deal crossed the news feeds and caused a poke back down into Thursday range.  As we approach cash open, price is hovering a few point above Thursday’s high.

On the economic calendar today we have markit composite/manufacturing/services PMI at 9:45am followed by University of Michigan’s final November reading of sentiment at 10am.

Yesterday we printed a neutral day.  The day began with a gap down and open drive lower.  Buyers stepped in ahead of the Wednesday low and trade was choppy before sellers made a move down through overnight low.  Sellers were again unable to trigger a move down through the Wednesday lows, instead we rallied back up through the range and went neutral by a few points, stopping shy by 2.5 points of an overnight gap fill however, before settling back to the midpoint by end-of-day.

Heading into today my primary expectation is for buyers to drive up and away from the Thursday high 8289 setting up a move to take out overnight high 8313.50.  Look for buyers to tag the Wednesday naked VPOC at 8325.75, then look for sellers up at 8339.50 and two way trade to ensue.

Hypo 2 sellers press into overnight inventory and reclaim Thursday range, setting up a gap fill down to 8274.  Then we continue lower, down through overnight low 8265.25.  Look for buyers to defend around 8250 and two way trade to ensue.

Hypo 3 sellers are stronger, taking out Wednesday low 8231, setting up a move down to 8200 before two way trade ensues.  Stretch targets on a full-on liquidation: 8159.25 then 8188.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Thursday flat after an overnight session featuring extreme range and volume.  Price was balanced overnight, holding Thursday range.  As we approach cash open, price is hovering above the Wednesday midpoint.

On the economic calendar today we have existing home sales at 10am, 4- and 8-week T-bill auctions at 11:30am and a 10-year TIPS auction at 1pm.

Yesterday we printed a double distribution trend down / neutral day.  The day began with a gap down that buyers went to work resolving early on.  Buyers even pushed range extension up for a moment, tagging the Tuesday naked VPOC before sellers came in.  Sellers drifted price back down near the session low before a strong liquidation drive pushed price down.  This selling served to resolve last Thursday’s open gap before discovering responsive buyers who worked price back up to the midpoint by day’s end.

Double distribution neutral day.

Heading into today my primary expectation is for buyers to work up through overnight high 8308 setting up a move to tag the naked VPOC at 8324 before two way trade ensues.

Hypo 2 stronger buyers trade up to 8339 before two way trade ensues.

Hypo 3 sellers press down through overnight low 8240 setting up a move to tag 8200 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves: