NASDAQ futures are coming into Monday gap down after an overnight session featuring extreme range and volume. Price briefly worked above the Friday high before settling into balance.
On economic calendar we have ISM non-manufacturing/services data at 10am, then a 3- and 6-month T-bill auction at 11:30am.
Last week markets began strong but by Tuesday sellers stepped in. The selling accelerated through the week before finding a strong responsive buyer late Friday. The last week performance of each major index is shown below:
*note the relative strength of the Russell
On Friday the NASDAQ printed a double distribution trend up. The day began with a gap down to a new low on the week. The rest of the day was spent steadily campaigning higher.
Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6805.50. This sets up a move to take out overnight high 6833. Look for sellers up at 6845 and two way trade to ensue.
Hypo 2 sellers gap and go lower, take out overnight low 6742.50. Look for buyers ahead of 6700 and two way trade to ensue.
Hypo 3 stronger buyers trade us up to 6872.25 before two way trade ensues.
Sometimes interesting things happen inside a data set. A rare quirk that makes you remember the specific rules of your system. Today’s IndexModel reading is the exact same as the hybrid Exodus score, so the spread between the two is zero.
This has never happened.
If the IndexModel score were one one hundredth lower, it would trigger the bunker buster signal—my favorite signal—an alert of ultra-violent markets that knife lower and ultimately form a tradeable low.
But instead the model is neutral.
I have been bearish based off of extreme model signals many moons ago, back on February 4th. I laid into Jerome Powell pretty hard last week, and I feel bad now. He is probably a decent dude, I just saw the uncertainty he introduces to the market, and being bearish, I overly-criticized him to fit my narrative.
That being said he does look soft as pudding, and he is a new character on the scene.
Our authoritarian leader is adding to the uncertainty by meddling with huge economic levers. I had to dust off the old macro-economics book and chart out a few tariffs as a refresher. Overall I think it is a bad idea. We do not like central planning in America. It seems to work for China. They will literally force an entire village of humans to move into apartments in some other city. And it works.
Like some good central planning would be to force everyone in Flint to move to Detroit. Detroit has everything they need and it is a waste of time, people living out in Flint. There is no good reason for humans to live in Flint.
But we do not like central planning in America. Libertarians really don’t like central planning. I thought republicans didn’t either, but who knows anymore how those bible freaks like to get off.
With algos whispering in my ears, and global economic saber rattling, I am taking the upcoming week real slow, and while I suspect we are in the middle of a correction, I am cautiously optimistic about next week.
Exodus members, the 172nd edition of Strategy Session is live, go check it out!
NASDAQ futures are coming into Friday gap down after a session featuring extreme range and volume. Price worked lower overnight and as we approach cash open price is hovering below the Thursday low.
On the economic docket today we have U of Michigan sentiment at 10am.
Yesterday we printed a double distribution trend down. The day began gap up, which was quickly filled, then after some violent two-way action price gave way to selling.
Then we went into balance. But right after lunch President Trump announced a saber-rattling steel and aluminum tarrif directly targeting the Chinese, who are enjoying the end of their annual holiday, Chinese new year. It sent markets careening lower into the end of the day.
Heading into today my primary expectation is for sellers to press down to 6600 before two way trade ensues.
Hypo 2 buyers attempt back into Thursday low 6689 but are rejected, sending us down to 6600 before two way trade ensues.
Hypo 3 buyers regain Thursday low 6689 and work up to 6764 before two way trade ensues.
NASDAQ futures are coming into Thursday gap up after an overnight session featuring extreme range and volume. Over 100k contracts traded as price worked deep down into last Friday’s trend up. At 8:30am initial/continuing jobless claims data came out mixed.
Also on the economic docket we have ISM manufacturing at 10am.
Yesterday we printed a neutral extreme down. A violent morning auction eventually gave way to sellers who briefly poked below the Tuesday low. Then a strong bid came in and worked up through IB high. Then we traversed the entire range again, eventually closing on the lows.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6881. From here we continue lower, down through overnight low 6823, setting up a move down to 6791.25 before two way trade ensues.
Hypo 2 buyers press up through overnight high 6898.75 and tag 6906.75 before two way trade ensues.
Hypo 3 stronger sellers close the gap down at 6789.25 before two way trade ensues.
It is feast and famine at the house of RAUL, I’ve always said that.
When I was young twenties, a jovial lad full of unfounded optimism and pomp it would be some kind of mistake, the regular injustices subjected upon yours truly.
Then I realized mistakes were the day-to-day. That life was one struggle after another. And that it was a matter of how you handled yourself during the shit storm that defined you. That it was either accept cubicle life and bi-weekly stipends or nut up and make something of yourself.
I had a flat tire tonight. I had a flat tire after an important business meeting in the city.
I do not live in the city.
Are you kidding me?
Live in Detroit? For what? The restaurants? Maybe…but is it worth the exorbitant taxes and potential murder?
At best, maybe, I rent a small space. A small pad strategically positioned for foolishness. But to own…they have a long way to come…the Gilberts and Illiches…before Detroit becomes a respectable place to own land.
I left my important meeting. LISTEN I TAKE MANY IMPORTANT MEETINGS OK? I am cultivating greatness. They want to build a SOHO house here.
It takes more than buying SANGAMO at $3 to make a respectable nut in this world. You have to pander…and kiss..and joke…and rip…and bla bla bla…convince people to sign checks in your direction.
This is something you have to do…otherwise you will end up a pathetic desk jockey earning 75k with 2 maybe three weeks of freedom a year.
Is that what you want? To help J.P. Morgan earn another 2-3 hundred million a year?
Live is short. Real short. A blip if you are hopeful. A twitch if we are being realistic.
So I want my twitch to be filled with thrills.
Maybe in the meantime I can convince a few others that it isn’t worth it to shape yourself into the the proverbial ‘productive member of society’.
Oh yes, that word…so offensive, with the hard -g.
Funny how humans can take a sound and make it so hurtful…if you let them.
I cannot stand humans. There I said it. The smell…the panic and rush they have when racing through Whole Foods. Pathetic.
Whatever. Listen. I had a flat tire tonight deep down in the hood. In a place where a lesser man, like a Jerome Powell, would freak out and call an Uber Black…a place where a Jerome Powell would worry about being shot. Deep down in the hoods of Detroit.
Which is ironic. Because since I arrived back home here in the murder mitten I have been lining up this joke—that anyone making fun of the pot holes hasn’t played enough video games. Because video games sharpen your ability to react to obstructions.
Anyhow my tire went flat on the east side in a place famed to be the most violent in town. Jerome Powell would have dialed 9-1-1 and stayed inside his locked car until police officers—-women and men who have much more important things to do—arrived and carted him to safety.
Which is fine. Lifes been good to Jerome so far. But I had to handle that shit on my own. Tire iron in fist, heater on hip, come at me. The tire was fixed manually. The ride home uninterrupted.
Whatever. It doesn’t make me a better citizen then Jerome Powell.
I am home now and still bearish. It will take a spring miracle to make me bullish.
Or two weeks of nothing…like sideways nothing. Then I will be bullish again. Hopefully between then and now Jerome Powell can learn to stop spilling Federal Reserve secrets and start behaving like Queen Yellen bitch slayer so all us open market investors can continue making money.
Hopefully Jerome Powell stops catering to the money market account crowd. The private equity crooks.
We have to stay objective even if we have no real way of trusting our leadership.
Worst case we flea to Canada and commit to snowboarding.
I have to make this communique brief as I’m juggling five plates and have two more that need to start spinning.
I just got back in town. I just got back after three-four weeks living on the fringe of society, burning donkey shit in the desert to keep warm and shit. And if you think that means I have less visibility on the financial markets then you, then you will be quite perturbed when I tell you quite the contrary.
This is not the type of market I initiate risk in. First of all my benevolent robots, my only consul in the art of financial war, my loyal leaders, the ones who never flinch and always offer only the highest level of objectivity. Those kind robots, they saw something. Here is the note I issued, on their behalf, three weeks and three days ago:
CORRECTION-LIKE BEHAVIOUR. There words, not mine. I am simply a vessel which they speak through, much like your God spoke to the disciples while they wrote the bible.
So there’s the robots.
Then there is something all investors can agree sucks—uncertainty. Uncertainty at the top, no less. Anyone with a brain knows that capitalism is what makes the world turn. That banks are the foundation stones of capitalism. And that the Federal Reserve is the lender of last resort—the ultimate banker—the banker of bankers, or king of kings as they said in biblical times.
I am being told to trust Jerome Powell. To love Jerome Powell. To tithe my savings at the feet of Jerome Powell.
This is what I see when I look at Jerome Powell. I see a private equity goon like Fred Wilson, the type of guy who amassed incredible financial gains before dumping his flotsam on the general population via IPO. I see a fucking attorney, ready to send me a nice letterhead asking for a gratuitous retainer. I see a consultant who is suited and booted before 10am.
I do not trust anyone wearing a suit before 2pm, as a rule of thumb.
Also he answers questions. Janet Yellen did not answer questions. She told drawn-out stories like all nice grandmas do. Grandma Yellen was kind. Grandma Yellen gave us butterscotch candies even while we were being little shits, running Tesla and Google to unspeakable valuations.
Jerome Powell goes to the House Financial Services committee and in no time he’s answering questions, look:
Wow bro, why don’t you just tell them everything about our precious QE? The greatest tool the Federal Reserve ever created, a tool developed by Benjamin ‘blunt’ Bernanke. He needs to learn to be more vague. Until he does, and he will, uncertainty.
All that being said, I have not reduced risk. That is not entirely true. I did scale part of my SANGAMO position last week. I sold 1/3 of the position from inside a frozen RV. I sold it because it took out $25 and that was the plan ever since it was trading at $3. This is not a fucking game. This is good business.
While we firmly believe in the core thesis of CRISPR, that super rich folks like Jerome Powell, with extravagant lake houses and families, that these rich people do not want to die—that they will invest their dollars in any idea that promises immortality—that these rich people control a vast percentage of the world’s investable money—and that they do not want to leave the mortal world because it is a pretty dope place for them to hang out and do cool shit—that they will funnel money to CRISPR ideas like SANGAMO. While we believe this core thesis, we are also realistic and know that all true advancement is out on the horizon, on the proverbial ‘4-years from now’ timeline, a place where scientists dream and scheme…and often fail—realistically.
AND WE ARE HERE TO CONDUCT GOOD BUSINESS. Good business in the financial markets comes down to PLAN AND EXECUTE.
It is not pretty. No one will have sex with you because you are good at taking 100,000,000 data points, parsing and analyzing them, and churning out a statistical advantage on a Microsoft Excel spreadsheet. There will be no cheering fans when you flawlessly execute.
Is that what you need? To be recognized? And for what? To what end?
In the words of Lily Allen, “I want to be rich and I want lots of money. I don’t care about clever. I don’t care about funny.”
Said money will be used to obtain land as far north as my constitution will allow. Said land will be equipped with enough solar, batteries, and robotic facilities to ensure I can sit back sipping mead while the malaise of human propagation happening in major city centers goes full pitch fork, egging each other over meaningless freedoms like assault rifles and opiates.
So like I was saying, I am not reducing risk. But I am also not assuming new risk. The morning reports, the ones prepared every morning from inside mothership, are showing me an orderly market that is behaving with my price levels, the best price levels in the game, and that we are balancing just below record highs.
These aren’t exactly bearish conditions.
Nevertheless, I am a bit bearish. I am giving sellers another 10-12 days to show up before I start mashing the buy button.
NASDAQ futures are coming into Wednesday gap up after an overnight session featuring elevated range on extreme volume. Price made a new weekly low overnight before discovering a bid and trading back near the Tuesday midpoint. At 8:30am GDP data came out better than expected.
Also on the economic docket today we have pending home sales at 10am and crude oil inventory and 10:30am.
Yesterday we printed a double distribution trend down. The day began with a violent two-way auction which eventually gave way to selling once the world heard Jerome Powell speak to Congress for the first time. The selling continued, methodically, right down to the open gap left behind from last Friday—down at 6909.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6917.50. From here sellers continue lower, down below overnight low 6893.25. Look for buyers just below at 6890.50 and two way trade to ensue.
Hypo 2 buyers gap-and-go up through overnight high 6945.75 and continue higher, up to 6977 before two way trade ensues.
Hypo 3 stronger buyers trade up to 7000 before two way trade ensues.
Tue Feb 27, 2018 9:17am ESTComments Off on New Fed overlord Powell to testify to Congress Tuesday, here is the NASDAQ trading plan
NASDAQ futures are coming into Tuesday flat after an overnight session featuring elevated volume and normal range. Price was balanced overnight and traded along the upper quadrant of Monday’s range. At 8:30am Advance goods trade balance and Durable goods orders both came in below expectations. At 9am the Case-shiller home price index came out better than expected.
Also on the economic docket today we have consumer confidence at 10am. At the same time, new Federal Reserve chief Jerome Powell will begin testifying to the House Financial Services Committee. This will be our first time hearing how the new Fed chair handles Q&A in Congress.
There are also 4- and 52-week T-bill auctions at 11:30am.
Yesterday we printed a double distribution trend up. The week began with a gap up and early drive higher. The morning featured a bit of two-way action before buyers ultimately stepped in and initiated new risk, slowly trending the market higher for the rest of the day.
Heading into today my primary expectation is for buyers to work up beyond overnight high 7009. From here buyers continue higher, up to 7018.50 before two way trade ensues.
Hypo 2 sellers press down through overnight low 6977.25, setting up a move to target the naked VPOC at 6960. Look for buyers ahead of 6946.50 and two way trade to ensue.
Hypo 3 stronger sellers work a full gap fill down to 6923.50 before two way trade ensues.
The very kind and resourceful iBankCoin field team has navigated our land yacht to the snowy northwest. As of this writing four bald eagles have been spotted and logged into the national registrar by our devoted naturalist, Doctor Roberto Bregante—a Mayan native with an occasionally violent disposition whose anscestors occupied these lands long before European settlement.
As we traverse these rich lands I’ve made contact with Mothership, which is hardwired to the interwebs at a geographical point between the trading markets in New York and Chicago. Mothership is constantly receiving information from over 6000 remote sensors strategically placed throughout the financial complex.
These sensors collect raw information which Mothership parses and analyzes. Said information is married to data stored inside the Exodus cloud. All these data form the bias model which forecasts direction of the next five trading days. Sometimes the model peers further into the white fogs of the future and whispers prophetically about longer term events as objectively as possible.
Right now the model sees a correction lasting many many weeks, perhaps even months. This is only based off two samples from the entire model history, which began in November 2014.
The model is a true testament to humans improving their lives with AI augmentation. Something simple and pure and real.
Unlike competitive figure skating. So much about ranking figure skaters is human and subjective and therefore flawed. Did the boy smile enough? Was he fierce when the song was fierce? Is his country a kind one or one with authoritarian leadership?
Despite many measurable and technical score points, there is far too much human subjectivity to consider the number scores pure.
We seek purity on the RAUL blog. Through the instagrams and snapped chats and tweets I also seek to inspire. For some, the theater of a brilliant ice dance invigorates the spirit and inspires. Which is fine.
Anyhow the model lads, it is neutral heading into the upcoming week after being wildly bearish last Sunday. On a longer horizon, 4-6 weeks perhaps longer, we expect correction behavior.
The Weekly Strategy Session inside Exodus covers these matters in detail. And both last week and this week’s report are improtant reads if you want a clear vision about upcoming conditions and what to look for before initiating new intermediate/long-term risk.
Lucky for you, all of you, there are free trials of Exodus from now through Valentine’s day. Therefore you can access the reports in their entirety. I would be humbled if you took some time to check it out and tell me what you think. Especially if you think I’m wrong and that the best move next week was to BTFD.
Meanwhile I am back in nature lads, with a team of researchers, thrill seekers, and scientists. A trip to places many would describe as enchanted. Follow me on Instagram username vincalim you’d like to see some of the oddities along the way.
And I couldn’t have timed this trip any better because all my robots are calling for correction.
And until then our job as humans is to establish a controlled grip on our facilities. Not too firm a grip but steady and prepared for chaos. One of our favorite tools for ensuring a prepared mind is objective observation of the financial markets. A power shift is happening now. Decentralization. Less power to the government. More to private enterprise. The stone cold bankers at JP Morgan have formed a triumvirate with Amazon and America’s favorite privateer Warren Buffet to fix healthcare—one of societies biggest sore spots. Whether they succeed, as always, is TBD.
But we need to act now. Not when we know if capitalism has fixed what politicians cannot. We need to act, or not act, to extract wealth from the financial markets. Said wealth will then be converted into real assets like land. Northern land in mountainous territories. High ground is insulated from the malaise of human propagation.
Because it is hard to live in those unforgiving regions. But with the right gear they become happy oases of pure nature.
Therefore our job is to collect our thoughts and prepare for battle inside the financal complex. We know who we are up against—the Chanoses and the burrito eaters. The sheiks, the Chinese, and those crypto-loving Koreans.
The competition is institutionalized at a young age and trained to mathematically outperform your average football-loving American.
Oddly enough, rabidly successful teams like the Patriots have all enacted some form of moneyball analysis. It has become abundantly clear that competing at the highest level in any game, from skis to /6e’s to chess or kung fu requires a statistical foundation.
Data does not lie.
Which is why we set out every Sunday to collect and parse out the best data available and use it to prepare for any chaos to come. And the models lads, they are calling for conditions many perceive as chaotic. The model is calling for a correction.
We are at a pivotal moment in history. AI is on the Moores’s parabolic arc and climbing. The good folks at Microsoft and Google are doing incredible work in quantum that will only serve to accelerate this truth. Our Obama-era Fed chair is out. Our sweet grandma from Brooklyn is being replaced by Jarome Powell, an old white man from Washington DC with an estimated net worth that ranges from $19-$112 million.
God bless America.
Chinese New Year is right around the corner and the gambling halls in Vegas favor the steady Patriots by 4.5 points. An unexpected victory from the birds might be enough for society to finally snap and take to the streets with aluminum bats and ski masks, hellbent on altering the course of American history.
Their biggest enemy is the cold. For 1000s of years cold weather has successfully thwarted attempts at revolution, from the fires of Byzantium to the French gallows. Which is why it is our job to avoid all these chaotic times from the comforts of the north, letting nature insulate us from the recurrences of fanaticism.
All that being said, it is with great pleasure to announce I am headed to the mountains. February is without question the worst month down on the Michigan flats. It is time I seek steeper lands and deeper snow packs to hurl myself down. I am returning to the fringe life. We have rented an RV and will be chasing powder until further notice.
During this time stock market communications will be limited. The way I see it, we are due for a correction and the models are calling for a correction, and if we are correcting, then what purpose does it serve me to ring my hat over a violent market? My time is better spent becoming one with winter nature.
If you would like to follow my adventure, be sure to follow me on Instagram, username vincalim. I will be posting all sorts of content from the highlands.
Models are bearish lads. We could establish a trading low at some point next week. But a longer view suggests a correction is in the cards for the next several weeks.
Exodus members, the 168th edition of Strategy Session is live. Go read more specifically what the model is calling for and see in much less colorful words what we are specifically looking for before we initiate new long.