NASDAQ coming into the holiday week down a quick -40, here is the Monday morning trading plan

NASDAQ futures are coming into Monday gap down in-range after an overnight session featuring extreme range and volume.  Price worked to a new three-day high overnight before falling back down to into Friday’s range.  As we approach cash open price is hovering just below the Friday midpoint.

On the economic calendar today we have NAHB housing market index at 10am followed by 3- and 6-month T-bill auctions at 11:30am.

Last week the NASDAQ began gap down and with a liquidation lower.  Selling pressure saw prices lower through Wednesday despite some strong responsive bids stepping in along the way.  Finally a strong enough responsive bid came in Wednesday morning that had enough force to turn the auction higher.  We had conviction buying through Thursday and Friday was a balance day.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6893.25.  From here we continue higher, up through overnight high 6934.50 setting up a move to tag the 6950 CVPOC before two way trade ensues.

Hypo 2 sellers gap-and-go lower, driving a liquidation off the open that trades down to 6800 before two way trade ensues.

Hypo 3 stronger sellers liquidate down to the measured move ATR band at 6730.50 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

Last week the signals were mixed and I thought about taking the week off but then I started working intra-day longs after that heavy Monday liquidation pressured prices into a place I couldn’t not do business.  This week is different.  All systems are aligned for a rally.

And it will only take a bit of strength through Monday to invoke the turkey gods whose shadows you can see if you look closely at the horizon during the sun’s rise.

That’s all I have to say about that.  My favorite industries are solar and CRISPR mainly because I invested in both financially and mentally.   They are two small slices of hope in a world pie of despair.

Bullish until otherwise noted.

Exodus members, the 209th edition of Strategy Session is live, go check it out!

NASDAQ futures are coming into Friday gap down after an overnight session featuring extreme range and volume.  Price held inside the upper half of Thursday’s range overnight, spending the majority of the evening rotating lower.  As we approach cash open price is hovering above the Thursday midpoint.

On the economic calendar today we have industrial/manufacturing production at 9:15am followed by long-term TIC flows at 4pm.

Yesterday we printed a double distribution trend up.  The day began flat.  An early two-way auction gave way to selling and we made a new low on the week.  This low discovered a strong responsive bid and we pressed back up through the day’s range, going neutral before lunch.  Then, buyers defended a throwback to the mid point which setup a strong afternoon rally.  Despite sellers stepping in ahead of the Tuesday high, buyers managed to drive price back up near daily high before closing bell.

Double distribution trend up.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 6916.25.  Buyers continue higher, trading through overnight high 6917.75 to target the composite VPOC at 6950 before two way trade ensues.

Hypo 2 buyers press through composite VPOC 6950 and sustain trade above it, setting up a move to target 7000.

Hypo 3 sellers gap-and-go lower, down through overnight low 6806.25.  Look for buyers down near 6800 and two way trade to ensue.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Thursday with a slight gap up after an overnight session featuring extreme range and volume.  Price worked sideways overnight, with all Globex trade contained inside the lower half of Wedneday’s range.  As we approach cash open prices are hovering in the lower quadrant of Wednesday’s range.  At 8:30am advance retail sales came out better-than-expected, Philly Fed data below expectations, and initial/continuing jobless claims below expectations.

Also on the economic calendar today we have crude oil inventories at 11am.  With oil prices down nearly -9% in the past week, the inventory data may be more likely to spark a reaction in the NASDAQ futures.  We also have Jerome Powell speaking about the hurricane Harvey recovery efforts at 11:30am.

NASDAQ traders sticking around after the bell should also be aware that major tech component NVIDIA is set to report earnings after market close.

Yesterday we printed a double distribution trend down.  The day began with a gap up, in range which sellers resolved after a brief two-way auction at the open.  Sellers then continued working price lower, down through the weekly low.  Late in the session a strong responsive bid was discovered that spiked price up to the daily midpoint.  The midpoint was a solid wall of selling, however, and we traded back down near the session low by end of day.

Heading into today my primary expectation is for sellers to press down through overnight low 6751.50 setting up a move to target 6718.50 before two way trade ensues.

Hypo 2 stronger sellers press down through 6700 and sustain trade below it, setting up a move to test down through swing low, down below 6666.

Hypo 3 buyers work up through overnight high 6843.25 setting up a move to target 6900 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Wednesday up a quick 40 points after an overnight session featuring extreme range and volume.  Price worked lower overnight, trading down to prices unseen since October 30th.  Around 4:30AM a responsive bid stepped in and since then we have trade uni-directionally higher, up more than 100 points off the low.  As we approach cash open price is hovering along the Tuesday midpoint.At 8:30am consumer price index data came out mixed.

The only other important economic event scheduled for today comes after the bell.  At 6pm Fed Chairman Jerome Powell will be talking economy down in Dallas.

Yesterday we printed a neutral day.  A neutral day after a normal day, with a long-liquidation lowercase-b profile.  All formations typically seen at-or-near swing low.  Tuesday began with a gap up and very choppy opening auction.  Said chop managed to take out overnight high early on before thrusting lower to resolve the overnight gap.  At this point sellers were unable to press the market range extension down.  Instead we drove higher, going RE up and tagging the composite volume point of control 6950.  Strong responsive sellers stepped in here and defended their Monday morning selling conviction.  This pushed us back down through the entire daily range, putting us into a neutral print.  Bids came in late on the session and pushed price just up beyond the day’s lower range quadrant.

Neutral day.

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6851.50.  Buyers reject a move down through Tuesday low 6818.25 setting up a move to take out overnight high 6899, setting up a move to target the composite VPOC at 6950 before two way trade ensues.

Hypo 2 buyers gap-and-go higher, trading up to 6950 early.  There’s a battle here that ultimately gives way to buyers who drive price up to 7000.  Look for sellers up at 7023.50 and two way trade to ensue.

Hypo 3 stronger sellers close overnight gap 6851.50 then continue lower, down through overnight low 6777 setting up a move to target 6717.25 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

NASDAQ futures are coming into Tuesday gap up after an overnight session featuring extreme range and volume. Price briefly took out the Monday low overnight before rallying back up near the Monday midpoint.  As we approach cash open, price is hovering in the lower quadrant of Monday’s range.

On the economic calendar today we have a 3- and 6-month T-bill auction at 11:30am, a 4-and 8-week T-bill auction at 1pm, and a monthly budget statement at 2pm.

Yesterday we printed a double distribution trend down.  The day began with a gap down near last Friday’s low followed by a drive lower.  Sellers drove clean through the composite VPOC 6950, continuing to probe lower prices until about 11:45am when a responsive bid stepped in at the weekly ATR band 6825.75.  From then onward the market balanced, forming a wide balance from about 6900-6840.  Price moved back down near session low as we ended the day.

Overall the current market profile has a lowercase letter-b shape which is indicative of a long liquidation—a temporary phenomenon often seen near swing low (see market profile chart below).

Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6836.75.  From here we continue lower, down through overnight low 6801.25.  Look for buyers just below at 6795 and two way trade to ensue.

Hypo 2 long liquidation continues, stronger sellers drive us down to 6718.50 before two way trade ensues.

hypo 3 gap-and-go higher, sloppy low.  Buyers work up through overnight high 6909.25 setting up a move to target the composite VPOC at 6950 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

I was going through my archives and realized I haven’t messed your mind up with my CRISPR immortality chatter since April 2017.  Back then I was way out on the fringe of society, living in a van, preferably down by a river when possible.  My exuberance has been tampered several times since then.

I remember being on the final leg of a ski bum road trip across the west, meeting up with some corporate friends at mammoth mountain, who had ridden that nice Italian-sounding CRISPR stock, Sangamo, higher with me since around 3.50.  They were of course stoked to see me, first because they’d caught a fresh dumping of powder out on Chair 9 earlier in the day, and next because there we were, toasting our commanding of the financial markets with fireball and mountain ale.

I had been to seven other mountains before then, including two days at Jackson Hole, having caught powder on all of them, and was thinking with a clarity reserved for the truly satisfied mind.

They wanted to buy more Sangamo.  Whatever, this sounds like a brag at best, a downright fiction at worst.  I told them to instead sell a third or their position from 3.5o and lock in the profits.  I did the same a few days earlier, selling a third of my original position from inside the RV.  Look at this freaking chart:

We scaled 1/3 of our position at swing high.  Santa Lucia, say what you will about charts and timing and technical analysis guff—the right ingredients and you can think clearly, man.  I said to him, a Santa Barbarian mind you, I said, “We know very little about CRISPR science.  All we know is the rich have aspired to immortality since hording religious icons in Byzantium.  They have good reason to live.  Life has been good to them, they have complete command of reality and want to enjoy here on earth the fruits of their power.  That’s all we know.  Scale a third.”

It was a hard sell, selling them on selling but I had been targeting $25 all along. Old swing highs.  Not rocket science.

Anyways, clearly these people harp me as they see their net worth wither away, watching their papered gains on the remaining 2/3rds dwindle away, along with their aspirations for Tesla cars and coastal real estate.

What do we do now, RAUL, you fucking cave dwelling fuck?

I couldn’t care less.  I can live off of canned fish and river water.  Probably longer than a person subjected to the stresses of corporate servitude.  But I like CRISPR…I like selling rich assholes the promise of immortality.

So I would tell them.  I’m holding off until November.  This wasn’t some prophetic vision.  I just feel like I have/had a sense of the overarching sentiment surrounding this whole CRISPR situation.  Money changes people.  It makes them confident.  Which is fine.  Sometimes it makes them overconfident.  Which is fine too, but overconfidence opens up space for a scrappy and resourceful competitor to take.  There is a real balance to nature.

The bill always comes due.

Enthusiasm had returned to science, to immortality, to CRISPR—to the stock market in general.  This chart is quietly passed around by a small circle of traders:

And as you might imagine, I sensed it when people started to panic about Sangamo.  A fall from $25 to $16 in two months (March-April 2018) puts some panic in people.  Hahaha, funny humans.

Anyways, I figured we had to make panic lows.  After which there would be a violent bounce higher before making another new low, which meant another long, bitter, shitty stretch of discouragement was in the cards.  So I figured wait until November, then take it from there.

I pay attention to things most of yous overlook.  It’s a product of consuming raw inputs as opposed to cooked up media bits or other foolishness.  Raw stock market interactions.  That is how I measure the temperature of the collective human mind.  Say what you will about my school of thought.  It lets me slide through the financial complex like a fox, snagging meals along the way.  No ones master.  No ones slave.

Anyways, something caught my interest on last Sunday’s strategy session.  During our first material bounce of the Great Bear Market of 2018 [sarc] the Health Care sector turned out the best 5-day return, look:

So I’m sitting here Monday, trying to take the week off because my signals were crossed, and the stock market is being obliterated.  I remembered the conversation I had with one of my closest confidants, ROBERTO BREGANTE, and how I had informed him that I had begun stalking SGMO—since it was now November and Sangamo was having its shit tossed last week.  I told him resting bid at 10, resting bid at 10…might inch up higher if buyers step in before then.

The truth was I had no resting bid.  I never rest bids unless I absolutely have to.  I was here Monday morning, sending emails and pacing around Mothership and preparing morning trading plans and shit.  When I dialed up a quote on the NAS100 futures at about 11am I was surprised at what all of you had done to the stock market.  I didn’t look for a reason why it happened beyond a cursory scan of Twitter.  I realized nothing horrible had happened, aside from a shite tonne of primitive missiles being fired from the Gaza Strip, a variety of shoddy ballistics fired towards the citizens of Israel.  This is like the Holy Land equivalent of a mass shooting in America.  It has almost zero likelihood of needing to be priced into the stock market.  So I directed my attention back to the NASDAQ futures.

I went long 6833 despite it being my week off.  I was in a jovial mood so I live tweeted the trade.

here I was trying to take the week off $nq_f but too many levels aligned at 6833 to not bid it :-/

— RAUL (@IndexModel) November 12, 2018

Since I was back at the trading turrets on Mothership, I dialed up Sangamo.  And there it was, back at 10, right where I wanted it.  While capturing 65 nasdaq points, I watched to see if buyers would step into Sangamo at $10, and when it seemed they did I added to the position.

This is my first SGMO buy since about 3.50.

I hope this blog entry doesn’t come off as some kind of brag.  I also hope you do not take action based off this blog post.  All I am trying to do is expand upon my thought process when investing.  I feel like you have to bring a unique perspective to a game as competitive as speculating if you intend to produce unique returns.  That being said, everyone is different and their ability to dedicate resources to their way of life or their mind or investment process is different.  When I was a younger lad, I scoured the internet for real people who operated inside the financial complex, starving for information on how they do it.  That is why I blog.  I blog as if leaving a bottled message for 21 year old me.

Godspeed old sport.

Hopefully an entry like this gives you some insight and makes some light bulbs emit lumens into a dark corner of your own mind–expanding your investor mind.

Or not, whatever.  I am longer CRISPR as of today via more shares of that nice Italian sounding CRISPR stock SANGAMO.

ciao ciao kiss kiss

NASDAQ futures are coming into Monday gap down after an overnight session featuring extreme range and volume.  Price first rotated higher overnight, trading up near Friday’s cash high before discovering strong responsive sellers around midnight.  From then-onward we’ve rotated lower unidirectionally.  As we approach cash open, price is hovering along last Friday’s low.

There are no important economic events today.

Last week the markets were strong.  Early Monday the NASDAQ had standout weakness.  Big gap up Wednesday across the board and trend higher.  The Russell marked time, chopping along at its composite volume point of control.  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 and what appeared to be a trend lower, with sellers controlling the tape completely until about 2:30pm.  Responsive sellers stepped in at last Tuesday’s naked VPOC 6988.50 and we spiked back up to the daily midpoint.  Despite buyers working back to the daily midpoint, the week ended with sellers again pushing on the tape.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7052.75.  From here we continue higher, up through overnight high 7103.75.  Look for sellers up at 7117.50 and two way trade to ensue.

Hypo 2 sellers gap-and-go lower, down through overnight low 6985.75 setting up a move to tag the composite VPOC at 6950.  Look for buyers down at 6925.75 and two way trade to ensue.

Hypo 3 stronger buyers trade up to 7141.75 before two way trade ensues.

Levels:

Volume profiles, gaps, and measured moves:

Greetings lads,

Floods coming.

And until then our job is to take to the financial markets with the explicit intent of extracting US fiat dollars.  Said currency should be stockpiled until the amount acquired is sufficient enough to purchase land as far north as our constitution allows.  I’ll tell you, whoever was representing Canada when the line was drawn splitting North America did a solid for the Canadians—they have all the fjords and 70% of the world’s freshwater.

In any case the incessant desire to burn fossil fuel is putting a lid on our planet and as any Simple Jack can observe, water boils faster when you put a lid on the pot.  So altitude and norther latitudes are the only way to avoid blight, famine, and catastrophe for your children.  Your prayers won’t be of much use, but you may want to keep saying them anyway, especially if you live near the coast.

The models I use to drive my short-term trading decisions are sending opposite signals.  One is triggering a long bias.  The other, a short.  When this happens my default play is to step aside.  You see, unlike the Twitter gurus of the world or the full-time gamblers, I do not need to trade every single day to make money.  I only need to trade when a clear edge emerges.  Forcing myself to only trade when I have a directional bias, an intra-day trade setup, and a morning hypothesis to work with is what elevated me to consistent profitability.

It is easy for me to stand on my little iBankCoin soapbox and preach patience, but I know patience is not the panacea for overcoming the learning curve of trading.  Patience is only effective once you have a consistent and rigorous approach to decision making.  And the development of a style and approach can be an urgent matter that demands your persistence and experience (screen time) more than your patience.  I’m wandering off topic.

I spent part of last week out in the real world, interacting with real humans.  I listened to some smart people talking about blockchain and also a mixed bag of industrialists, attorneys, and drug addicts talk about cannabis.  These two industries are very similar to each other in my brain.  They both are new and confusing and probably illegal.  But it seems like lots of money is made when a business ventures into the grey matter between right and wrong.  It really is an ‘either or’ decision for me.  Either I continue investing in cryptocurrency or I rotate all those funds somewhere into cannabis.  I am taking this decision slowly; asking lots of questions; sizing people up.  I’m not sure I trust any of these cannabis actors.

Speaking of the real world, and if you’re enough of a masochist that you made it this far into my Sunday diatribe, you may be interesting in attending my talk this Wednesday, November 14th from 6-7:30pm.  It’s in Detroit.  Here is a link to RSVP: https://www.meetup.com/Detroit-Investors-Traders-StockTwits-Meetups/events/255982115/

We have room for a few more people, so if you will be in the Detroit area this week, come on down.

Anywho, my signals are crossed so I am stepping aside this week.  Cannabis is illegal but hemp seems interesting and perhaps less illegal.  Blockchain and cryptocurrency is super nerdy and totally out of the limelight, which I like.  And Earth is being brought to a slow boil, gently enough that most of us won’t notice and hop out of the pot before it’s too late.

ciao ciao

NASDAQ futures are coming into Thursday gap down after an overnight session featuring extreme range and volume.  Price worked lower overnight after briefly poking beyond the Wednesday trend high early in the globex session.  As we approach cash open price is hovering at the low-end of the upper quadrant of Wednesday’s trend up.  At 8:30am initial/continuing jobless claims data came out better-than-expected.

Also on the economic docket today we have an uncommon Thursday FOMC rate decision at 2pm.  The gambling halls in Chicago are currently predicting a 92.8% probability of no change to the Fed’s current benchmark borrowing rate of 2.25%.

Yesterday we printed a trend up.  The day began with a gap up above last week’s hig, so we were out of balance.  After an initial two-way auction was unable to reclaim last week’s range buyers stepped in and became initiative, driving price higher. Price paused briefly after closing the 10/22 open gap.  Then late in the session a fresh leg higher took shape, trending up into the close and ending at session high.

Trend day.

Heading into today my primary expectation is for buyers to work into the overnight inventory and close the gap up to 7218.50.  From here we continue higher, up through overnight high 7231.  Look for sellers up at 7263.50 and two way trade to ensue.  Then look for third reaction after the FOMC minutes to drive direction into the close.

Hypo 2 sellers gap and go lower, trading down through overnight low 7162 which sets up a move to target 7109.75 before two way trade ensues.  Then look for third reaction after the FOMC minutes to drive direction into the close.

Hypo 3 stronger buyers trade up to 7300 before two way trade ensues.  Then look for third reaction after the FOMC minutes to drive direction into the close.

Levels:

Volume profiles, gaps, and measured moves: