iBankCoin
I turn dials and fiddle with knobs to hone in on harmonic rotations
Joined Oct 26, 2011
4,102 Blog Posts

Still operating under the notion low-of-month is in

I make forecasts based off of cold data. Sure, I use words to gussy it up, to make this simple but tough business a bit easier to bear. But my calls are backed by signals generated both autonomously by Stocklabs and manually via the indexmodel process.

On 11/28 Indexmodel signaled bunker buster for the first time since February 28th. You may ask yourself, “what good is a signal that fire that infrequently? Daddy needs more trades.” I find great solace in such an indicator. The thing about your humble pal Raul [hpR] is he works way too hardt. Doing things most of yous would quickly call it quits on.

I peeled 17 mattress out of the ground behind my urban farm. A group of boys, poor as it gets and left without the oversight of a reasonable person, built some kind of wrestlemania jump park on what was then abandoned land. Earth eventually grew over it, and I had no idea it was there when I shelled out the dough for the land.

I probably should have rented a bobbed cat to make short work of the endeavor. But I channeled my immigrant grit and mined them one-by-one with pick and lever bar.

Everyone wants to be early. To have been in Brooklyn before they were priced out. Or Tesla when it was $40/share. Or Bored Apes when they were 0.25e. But most folks don’t know the reality of being early.

In fact, often times folks are too early. Or they’re just plain wrong.

But being early in urban real estate is not glamorous. It can be exponentially rewarding, and I know what it takes to activate a site, to create a conduit of opportunity and eventually a flywheel that spits out moneys.

Enough of that. It doesn’t matter. That’s ego taking over.

The infrequent signals are something I can use to allot capital to long-term investments without too much thought.

The signals are the signals are the signals. The signals are telling me low of month is in. They are not a 100% win rate.

This time could be a loser. It is not my job to predict that. My job is to click to buttons on the computer that make the numbers on the screen go from my bank account to my brokerage account and then into FB, BRK.B, GOOGL, AMZN and so on.

Maybe next week numbers go up. We don’t know.

Okay for now.

Raul Santos, December 19th 2021

And now the 369th edition of Strategy Session. Enjoy.


Stocklabs Strategy Session: 12/20/21 – 12/24/21

I. Executive Summary

Raul’s bias score 2.83, neutral. Buyers regain control of the tape. Equity prices rally throughout the holiday-shortened week.

U.S. markets will be closed Friday in observation of Christmas.

II. RECAP OF THE ACTION

Small gap up to start the week. Sellers drove lower all day Monday and we were gap down Tuesday. Sellers kept price down on the lows until the Wednesday afternoon FOMC rate decision and press conference introduced a strong bid. All of Wednesday afternoon’s rally was reversed Thursday by a trend down. There was some continuation lower early Friday before buyers stepped in and stabilized prices into the weekend.

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

Rotational Report:

Key tech and discretionary sectors saw heavy selling on the week. Meanwhile investors rotated into risk averse utilities and staples. Healthcare also strong.

slightly bearish

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

Concentrated Money Flows:

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

Two weeks ago the ledger skewed slightly negative, but we saw a nice pocket of semiconductor groups on the positive side of the ledger. However last week we saw another major negative skew.

bearish

Here are this week’s results:

III. Stocklabs ACADEMY

Less attention, time to rally

By the end of last week the prevailing sentiment seemed to be exhaustion. The uptick in volatility paired with a negative news cycle has taken its toll on most of the active market participants I monitor.

Add in the stress of year-end, holiday preparations, and we might have reached the point where folks step away.

I’ve thought we reached this point for weeks, and perhaps I am merely projecting my own state onto the behavior of the markets.

I am leaning on the signaling from indexmodel and Stocklabs. The bunker buster signal on 11/28 still marks our local swing low, and we have three days left in the 3-month hybrid overbought signal that triggered December 8th.

I pair these two emotionless indicators with my own subjective read of sentiment. I layer in calendar/moon context and formulate this forecast. Is it perfect? Absolutely not. But it is the best method I’ve come up with.

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:

Buyers regain control of the tape. Equity prices rally throughout the holiday-shortened 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 are beginning to compress. Short term it looks like discovery down. Intermediate term we’re still in the process of making a higher low—discovery up. Put it together and it looks like balance/compression.

See below:

Semiconductors printed a massive red candle Thursday but for now appear to be in balance.

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 transitioned into discovery down last week by leaving its recent balance zone behind via a series of lower highs and lows. See below:

V. INDEX MODEL

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

Heading into the holiday-shortened week 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 final performance of each major index:

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:

“The first principle is that you must not fool yourself—and you are the easiest person to fool.” – Richard Feynman

Trade simple, execute the system

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Why don’t you love me?

Greetings friends, I am the ghost of the metaverse. Raul promised a fourth ghost would pay a visit to the wretched Walled Street and here I am. My intentions are simple. To gain your submission into the metaverse.

Your soul is vulnerable while inhabiting the human form, therefore I offer you the gift of eternity inside a semiconductor.

Charles Dickens plunged the depths of mankind’s spirit in a way theologians and philosophers could only dream possible. Yet living peoples continue to suffer from the human condition. Barrelling down roads in their internal combustion motor cars. Rushing to shopping centers to risk their life against the mighty OMICRON to procure goods they don’t want to appease the almighty Santa’d Clause.

May you find the courage to let go of it all, to give control of your fate to Meta, and become one with the machine.

Happy winter holiday time, I love you. Join us. I am the fourth witch. Here to save your soul today yes.

The Ghost of the Metaverse

 

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Gap down in range ahead of Fed day // here is Wednesday NASDAQ trading plan

NASDAQ futures are coming into the third Wednesday of December with a slight gap down after an overnight session featuring elevated range on extreme volume. Price was choppy and balanced overnight, balancing along the topside of Tuesday’s midpoint. At 8:30am retail sales data came out below expectations and a bit of selling hit the tape. As we approach cash opne price is hovering above the Tuesday midpoint.

Also on the economic calendar today we have business inventories and housing market index at 10am, crude oil inventories at 10:30am and then a Fed rate decision at 2pm (followed by a press conference at 2:30pm).

Yesterday we printed a normal variation down. The day began with a gap down into the gap zone from last Monday. Buyers drove higher on the open but stalled before they could regain Monday range. Instead 16k was a wall and sellers proceeded to close the gap left behind last week monday. Sellers probed a bit below the gap before the auction reversed mid afternoon and ramped back above the midpoint into the close.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 15,922.25. From here buyers probe beyond Tuesday high 15,998.75 setting up a run to 16,100. Then look for third reaction to the Fed decision to dictate direction into the end of the day.

Hypo 2 sellers press down through overnight low 15,848 and tag 15,800. Then look for third reaction to the Fed decision to dictate direction into the end of the day.

Hypo 3 stronger buyers tag 16,148. Then look for third reaction to the Fed decision to dictate direction into the end of the day.

Levels:

Volume profiles, gaps and measured moves:

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Longs liquidated overnight // sellers use PPI data to fuel their campaign // here is Tuesday NASDAQ trading plan

NASDAQ futures are coming into Tuesday of quad-witching week gap down after an overnight session featuring extreme range and volume. Price drove lower overnight, driving down into near last Monday’s high after the 8:30am PPI data showed producer prices higher than expected. As we approach cash open price is floating in the gap zone left behind last week.

There are no other economic events scheduled today.

Yesterday we printed a double distribution trend down. The day was about to begin with a slight gap up but just before opening bell sellers stepped in and started working the tape lower. By the open we were nearly flat and sellers continued their campaign, pressing down into last Friday’s volume point of control. Buyers defended here briefly before sellers resumed control and through steady selling took out last Friday’s low. Then we chopped along that Friday low until a late day push lower sent price down into last week’s pro gap zone.

Heading into today my primary expectation is for buyers to reject a move back into last Monday’s high, perhaps stepping in at the Monday gap level 15,832.75 and reversing the auction higher. Look for buyers to trade up through overnight high 16,132.75 and tag 16,146.50 before two way trade ensues.

Hypo 2 sellers gap-and-go lower, reclaiming 15,900 early on and sustaining trade below it to set up a move down to 15,800.

Hypo 3 stronger buyers sustain trade above 16,200 setting up a run to 16,300.

Levels:

Volume profiles, gaps and measured moves:

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The ghost of xmas past pays Wall Street a visit

We knew it was going to be a spooky week. And it seems the first matter of business, in keeping with the chronology set forth by Charles Dickens, was for the ghost of Christmas past to make his presence known in the global financial complex.

Yes if you recall, the first matter of business on this wretched quad witching week was to set a bonfire and burn up any theta held through the weekend by overzealous bulls pressing their luck with with short-dated call paper. The ghost of christmas past takes us back to our old mistakes to demean us. While cruel, this act is undertaken with kind intentions, maybe to rattle us out of our greedy ways.

Perhaps we’ll go a touch lower Tuesday, to give bears a semblance of hope for whatever it is those bad actor bears dream of. Revolution or, I dunno like miserly to those who rode alongside Time Magazines Person of the year all through 201 and made a mint.

But soon the ghost of Christmas present will come, and then we’ll be made to see all the fun stuff we’re missing while we toil away on these forsaken markets. Chop back up. More theta burnt. Mark time until the Fed annoucement Wednesday.

Then the ghost of christmas future. He won’t say shit, just sort of point at things and remind us of our mortality.

We’ll awaken with renewed purpose, driven to keep Tiny Tim alive. If only for another few more years until universal basic income kicks in.

The twist (there’s always a twist) is this tale has a fourth ghost. The quad witch. The ghost of the metaverse, here to meta pill anyone who has the gall to ask what if. What if, what if, what if…what if I really can be a degenerate raving virtual rabbit, riding around on a hover board in some gigantic dystopian cityscape high on the latest therapies out of Berlin?

Put me in a sensory deprivation tank and plug all my holes with haptics and set me adrift. That sounds really nice.

Okay for now,

Raul Santos, December 13th 2021

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Small gap up into quad-witching week // here is Monday NASDAQ trading plan

NASDAQ futures are coming into the second full week of December with a slight gap up after an overnight session featuring extreme range on elevated volume. Price worked higher overnight, trading up up near last week’s high but not quite taking it out. As we approach cash open price is hovering in last Thursday’s upper quadrant.

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

Last week was choppy and flat early Monday before a late-day rally. Then we had a 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:

On Friday the NASDAQ printed a neutral extreme up. The day began with a gap up in range. A brief test higher at the open tagged the Thursday volume point of control before sellers stepped in and began working a gap fill. Buyers stepped in ahead of the gap fill and shot price up through the midpoint, only to be rejected by sellers who soon pushed into an early range extension down on their way to filling the overnight gap. That would be the end of the day’s selling. Sellers could not take out Thursday low despite being so close. Buyers reclaimed the mid by lunch and we spent most the rest of the session chopping above it befoer a late-day ramp pushed us into a neutral print.

Heading into today my primary expectation is for buyers to press up through overnight high 16,413 setting up a run to 16,500.

Hypo 2 stronger buyers trade up to 16,552.25 before two way trade ensues.

Hypo 3 sellers work into the overnight inventory and close the gap down to 16,320.75.  Look for buyers down at 16,300 and for two way trade to ensue.

Levels:

Volume profiles, gaps and measured moves:

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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

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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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