Mon May 7, 2018 8:57am ESTComments Off on NASDAQ gap up beyond last Friday’s range, here is the Monday trading plan
NASDAQ futures are coming into the week gap up after an overnight session featuring elevated volume on extreme range. Price campaigned higher overnight, trading up to prices unseen since about three weeks back before coming into balance.
The economic calendar is light this week. Today we have 3- and 6-month T-bill auctions at 11:30am and consumer credit at 3pm.
Last week was choppy. Sellers took action early in the week. Price moved methodically lower. Buyers stepped Tuesday afternoon and again Thursday. Friday the NASDAQ showed divergent strength and made preliminary attempts to break away from a muti-week consolidation. The last week performance of each major index is shown below:
On Friday the NASDAQ printed a trend up. The day was spent auctioning higher and working through some key contextual levels that suggest the tech-heavy index may be breaking up and away from a multi-week correction.
Heading into today my primary expectation is for a choppy open. Look for buyers to eventually step in and move up through overnight high 6833. Look for sellers up at 6845.25 and two way trade to ensue.
Hypo 2 sellers work down into the overnight inventory and close the gap down to 6776 and continue lower through overnight low 6772.25. Look for buyers around 6766 and two way trade ensues.
Hypo 3 stronger buyers campaign up to 6857 before two way trade ensues.
It is a thin thread that holds our society together. Hard winds pressed through the north and challenged that reality over the weekend. At times gusting up to 60+ miles-per-hour, wind and wind alone took out electricity in most of the mitten’s thumb.
winds up to 60mph I've opened all hatches to the mothership we're runnin' wide open the volume of air coming through is incredible pic.twitter.com/ZLF40ukCix
Saturday morning I woke up to a pleasant silence. Mothership maintained a comfortable 74 degrees through the night and a gentle breeze was blowing through the rear port. It was so quiet that morning that after rolling around, soaking in the gentle wake up call from busy birds, I began to worry that perhaps power had gone out. Then, as if on cue, my dish washing robot kicked on and began thrashing Friday night’s plates and pans with boiling hot water. Mothership was operational.
Last fall, in keeping with our current political climate, I began building a wall. The east side of Detroit is plagued with corrupt politicians and a variety of wild dogs, and I wanted to create a small libertarian oasis where I could walk around in the nude, tending to my grapes and fruit trees. This has been a dream since I spied the old German couple across the street as a boy. Elder RAUL always speculated that the “old krauts” were Nazis on the run, and this skepticism always made me curious of them. One day I caught a glimpse of their shriveled-old bodies picking fruit off trees in their yard, fully nude, and I thought they had it all figured out.
I know most Americans don’t have a stomach for nudity due to their Regan-era morality and general fear of sexuality (Free The Nipple!). So I set out to build a wall. It is, of course, going to be the most beautiful wall anyone has ever seen. Phase II of wall building is underway, and you will be happy to know the wall was unfazed by mother nature’s wind lashing:
I received a distress call from elder RAUL around 9am Saturday. He was without power and several of the robotic systems I had built to augment his up north lifetsyle were still and lifeless. He seemed to be calm, but also so calm I worried he was harboring a great deal of anxiety. I loaded the tactical deployment vessel with a generator, ample fuel, and several contractor-grade extension cords. Then I pushed north.
About a third of the way up the main corridor, the gravity of the situation began to set in. There were many electric poles snapped in half like dried up twigs:
There aren’t many street lights along the way but they were all out. Black from top-to-bottom, red-to-green. I passed a set of hoop houses that appeared shredded. I stopped in to see if I could help. I walked up to the nursery owner, Theresa, having light conversation with her team. She told me it was a pretty wild situation Friday, and at one point she opted to close up the house, have a whisky, and go to bed.
Her morning was less pleasant than mine, but she gracefully handled the wreckage. She gave me a barefoot tour of the facility, offering advice along the way for growing plums in Michigan. What seemed like major damage to my eyes turned out to be relatively small. The inventory was a little beat up, but she had taken out an insurance policy last season and appears to be coming out of the wind relatively unscathed.
I love chaos. When I tell people this they often think it is because I love destruction. That is not the case. It is because chaos creates opportunity, both professionally and introspectively. A natural disaster brings out the real character of people and provides us the chance to see what we are made of. Sometimes those challenges reveal something about ourselves that may be unsettling. Which is fine. It means we have found a path to growth and improvement.
By the way the cows were in good spirits and it appears none of them blew away:
None of the pinwheels in the distance showed any sign of damage. During the last major windstorm a pinwheel destroyed itself after the brakes failed. It was rumored to travel more than two miles, spinning like a ninja star across the planes, leaving four foot deep gouges along the way like the footprints of a marching Pink Floyd hammer.
If you’ve made it this far, you may be wondering what any of this has to do with NVIDIA earnings? Electricity, my noble reader, is what runs through the semiconductors and brings them to life. Exodus has put out many rare readings over the last month that whispered of bearish times. The relevance of those readings expires at close of business Thursday. At the same time, NVIDIA will be reporting earnings.
Back in early February, there were even more rare readings, but these were from IndexModel. They spoke of a correction that could play out one of two ways. The second way was a drawn-out, time-based correction. Here is the specific note from our February 4th Strategy Session:
After the 9/11/2016 reading a bid was established the very next day, but the next three months were spent churning sideways in what appears in retrospect to be a time-based correction.
Three months. And here we are lads.
The bears have FOUR MORE DAYS to present themselves and keep this correction going. Otherwise, come Friday, all bearish bets are off and we are going balls-to-the-wall long into summer, in a full DGAF manner.
So NVIDIA is the final arbiter.
So it is written, so it shall be.
Trade accordingly.
As for me, I am going to be spending the first few days of the week in nature. I need to further assess the effect these winds had on the local watershed and bird populations. #developing
Exodus members, the 181st edition of Strategy Session is live. Check out what is going on with the PHLX Semiconductor index, and how we can observe it going forward to make better life decision.
I had done all my homework. I was prepared to pivot. I owe a ton of credit to Jeff Kohler aka The Option Addict for teaching what I call the ‘divergent index’ trade. He taught it during one of his many workshops here at iBankCoin. Anyhow, I grabbed ahold of the long side Tuesday around lunch and rode it right into settlement. Right into Apple earnings and the NASDAQ spike that followed.
Fuck. I nearly threw up from the gains.
By the way, if you aren’t following me on Twitter (@indexmodel) you are missing out on action items I highlight during the trading day. I have spent the last few months reining in my tweets, to keep them as relevant and actionable as possible. If I’ve ever added value to your trading day, please consider giving me a shout out on Twitter. I need to spread my brand of hustle and positivity and not putting other investors down.
Thursday, more of the same. Nailing key price levels and taking in NASDAQs.
Meanwhile my buy-and-hold portfolio was destroyed. Three of my positions are down big on the week, $MTCH $TSLA and $SNAP. I never expect much from Snapchat, and now Match is up against Facebook too. I still have to fully assess the Match/Facebook/Snapchat situation before taking any action (buying more, cutting the losses).
As for Tesla, it is suffice to say everyone is completely unhinged on both sides of this stock. I remain permanently bullish. It used to upset me to see people trash talking Our Leader (all Praise and Glory to Elon!) and I would defend His name. These days I just stay quiet and continue accumulating shares.
On the hustle front, I made some powerful connections down in Detroit at the Fintech Association meeting. Sometimes I wonder if I am selling myself short by just trading my own accounts and tossing ham around on the interwebs. My understanding of the Fintech world is much deeper than most. I debate returning to the fray.
But then again, Mothership is looking better than ever. I moved nine arborvitaes, installed three smoke bushes, and I have laid the groundwork for a regulation size bocci court accented with a three tier pineapple fountain. Where I live is becoming less house, more office by the day. It makes going to work downtown or in Birmingham a bit less appealing.
That’s all I have to say. The week flew by and many good things happened. Some bad too. I wish only the good to you and your people this lovely May weekend.
May the fourth be with all my sci-fi nerds. Happy Cinco de Mayo to my fellow mexi-degenerates. And GOD BLESS AMERICA.
NASDAQ futures are coming into Thursday gap down after an overnight session featuring elevated range and volume. Price was balanced for most of the evening, chopping along the Wednesday low until about 8am when it pushed down into the Tuesday, May 1st range. At 8:30am initial/continuing jobless claims data came out better-than-expected.
Also on the economic agenda today we have ISM non-manufacturing/service composite, durable goods, and factory orders at 10am.
Yesterday we printed a neutral extreme down. The day began flat and choppy, with sellers making an initial push down to 6666 early on, then a secondary push to put us range extension down before flattening out at the daily mid ahead of the FOMC rate decision. Feds left their benchmark borrowing rate unchanged via an 8-0 vote. Third reaction after the announcement was down. First reaction pushed us neutral, and we eventually traversed the entire range and closed on the lows.
Neutral extreme.
Heading into today my primary expectation is for sellers to gap-and-go down. Look for a battle at 6600 to ultimately give way to more selling, down to close the gap at 6554.75. Look for responsive buyers at 6545 and two way trade to ensue.
Hypo 2 buyers work into overnight inventory and close the gap up to 6632.50. Look for sellers at 6641.50 and two way trade to ensue.
Hypo 3 stronger sellers trigger a liquidation down to 6532.25 before two way trade ensues.
NASDAQ futures are coming into Wednesday flat after an overnight session featuring elevated range on elevated volume. Price sprung higher in the initial hours of Globex, propelled by strong-as-ever earnings from the world’s largest company, Apple. Then we came into balance, hovering inside last Friday’s range. At 8:15am ADP employment data came out better than expected.
Also on the economic agenda today we have crude oil inventories at 10:30am and an FOMC rate decision at 2pm. The gambling halls down in Chicago are currently placing a 94.3% probability that the Fed will leave their benchmark borrowing rate unchanged.
Yesterday we printed a double distribution up. The day began gap down and with an attempt lower. Responsive buyers quickly stepped in and closed the gap. Then we traded sideways while the rest of the market sold off. Just after New York lunch a rally started to materialize, and we rallied clean through end-of-day and into Apple earnings.
Heading into today my primary expectation is for sellers to push down to 6666 before two way trade ensues ahead of FOMC rate decision. Use third reaction analysis after the decision to determine direction into end-of-day.
Hypo 2 buyer work up through overnight high 6740 setting up a move to target 6757.25 before two way trade ensues ahead of FOMC rate decision. Use third reaction analysis after the decision to determine direction into end-of-day.
Hypo 3 stronger buyers work up and close the open gap at 6777 before two way trade ensues ahead of FOMC rate decision. Use third reaction analysis after the decision to determine direction into end-of-day.
NASDAQ futures are coming into Tuesday gap down after an overnight session featuring normal range and normal volume. An uncommon sight over the last few months, to see such normal metrics. Price was balanced overnight, probing below the Monday cash low but overall remaining in the holding patter that began around noon Monday.
On the economic calendar today we have construction spending at 10am, ISM employment/manufacturing data at 10am, and a 4-week T-bill auction at 11:30am.
After the bell, the largest public company in the world, Apple, is set to report earnings.
Yesterday we printed a normal variation down. It was shaped like a lowercase letter-b, which suggests a long liquidation took place without sellers ever becoming truly initiative. This short-term phenomenon often occurs near the end of a move, and unless sellers continue pressing into the tape, remaining short becomes a precarious endeavor.
Heading into today my primary expectation is for sellers to gap-and-go lower, down to 6580.75 before we pause and wait to hear Apple earnings.
Hypo 2 buyers work into the overnight inventory and close the gap up to 6612.75 then continue higher, up to 6660 before two way trade ensues ahead of Apple earnings.
Hypo 3 stronger sellers become initiative and work down and close the gap at 6554.75 that we left behind on from last Wednesday. Look for buyers at 6545 and two way trade to ensue.
Mon Apr 30, 2018 8:55am ESTComments Off on NASDAQ heads into the week gap up, Apple earnings Tuesday, here is the Monday trading plan
NASDAQ future are starting the week gap up after an overnight session featuring normal volume on elevated range. Price was balanced overnight, trotting along inside of last Friday’s range. At 8:30am personal consumption data came out in-line with expectations.
Also on the economic agenda today we have Chicago purchasing manager at 9:45am, pending home sales at 10am, and both a 3- and 6-month T-bill auction at 11:30am.
Last week was choppy. Sellers stepped in late Monday morning and became initiative into Tuesday, trending markets lower. They pressed into the open Wednesday and discovered a strong responsive bid ahead of major tech earnings, earnings which ultimately served to propel the NASDAQ higher into Thursday and Friday morning. Then Friday morning sellers stepped in again before we balanced early Friday and traded sideways into the weekend.
The last week performance of each major index is shown below:
On Friday the NASDAQ printed a normal variation down. The day began gap up, likely in part from tech earnings that came out Thursday evening. Sellers stepped in and worked the market lower for much of the morning before we balanced and traded sideways into the weekend.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6668.50. From here we continue lower, down through overnight low 6660.50. Look for buyers down at 6648 and two way trade to ensue.
Hypo 2 buyers work up through overnight high 6712.50 setting up a move to target 6757 before two way trade ensues, effectively negating last Friday’s conviction seller.
Hypo 3 stronger sellers sustain trade below 6640 setting up a move to target 6617.25.
And I woke up in a calm mood. Then I read blogs by my favorite trading psychologist Brett Steenbarger and a zen-like state washed over me.
There will be no mixing words today, the models are bearish. Everything is aligned to expect downward action next week. Literally, everything. From visceral cues like the moon and May and 60 years of Korean conflict ending, to 30 different data points we observe every Sunday as part of the Sunday Strategy Session. To exacerbate the situation, we have a Fed rate decision Wednesday afternoon and employment data Friday morning. The gambling halls down in Chicago are favoring camp unchanged heading into Jerome Powell’s third meeting as Chairmen of USA’s Federal Reserve, an establishment that remains at the head of the free world, for now.
I initiated a bearish bet against Canada Goose recently. It has been wrong so far. You will find no shortage of stock market commentators who can point to the left side of a price chart and tell you what happened and why. But rare is the anticipatory eye for charts. We have discussed failed auctions many times on this humble blog, including a promise I made to myself and the reader in 2014 that we will never miss another failed auction. There are 59 posts in my archive that reference “failed auctions”. In practice, to trade them, requires stepping in front of a potential locomotive strength counter force. If you trade a failed auction after it confirms, you will miss a bulk of the move.
Anyhow, failed auction theory and some other things are what put me short $GOOS. For a long-form of my reasoning why, you can click here.
Listen, I will not be selling any of my positions in May. When I buy a stock, it isn’t in an attempt to take advantage of some capricious price oscillation. I do it because I love the company’s mission and trust their management team. And I marry that company, many companies, like some kind of Mormon polygamist whose only wives are immortal corporations.
Anyways I know most readers of finance blogs are not really interested in my ethos. They just want to be told which acronym to buy or sell, assuaging all responsibility for the win/loss onto someone else. Fuck, that sentence makes me angry.
I truly believe that if you are reading my blog then you are the type of person who wants to own the responsibility of their financial well being. Otherwise you wouldn’t stick around through my far-out Sunday diatribes.
What I will be doing ahead of May, and as soon as Monday morning, pre-market (I do need to wring my hat Sunday night even looking at Globex, thank you) is hedging. First using futures, then inverse ETFs. I am not sure which ones yet, and I am open to suggestions.
In fact, I would very much appreciate if you would tell me in the comments below what your favorite bearish ETF is.
Models are bearish lads. Historic rhythms are curiously cautious. Trade accordingly.
Exodus members, the 180th edition of Strategy Session is live inside Exodus. Go check out all the specific cues we are watching this week.
Fri Apr 27, 2018 9:22am ESTComments Off on Amazon saves the NASDAQ, here is the Friday trading plan
NASDAQ futures are coming into Friday gap up after an overnight session featuring elevated range and volume. Price was balanced overnight after surging higher Thursday afternoon on strong earnings from Amazon. Microsoft and Intel also reported positive earnings. Tech is alive and growing. Prices continued higher around 8:30am after US GDP came out better-than-expected.
It also appears the world issues with North Korea have been resolved, in a large part due to President Trump.
The only other economic event today comes at 10am when University of Michigan releases their final April reading of sentiment.
Yesterday the NASDAQ printed a double distribution trend up. The day began gap up and with sellers unable to work lower. Instead buyers sustained price above 6631 setting up a move to target 6700 (hypo 2). Price continued higher after the bell.
Heading into today my primary expectation is for sellers to work into the overnight inventory. Look for buyers ahead of 6755 and a move higher, up to 6777 before two way trade ensues.
Hypo 2 buyers gap-and-go higher, sustaining trade above 6800, setting up a move to target 6843 before two way trade ensues.
Hypo 3 sellers press a full gap fill down to 6736.25. Look for buyers ahead of 6700 and two way trade to ensue.
NASDAQ futures are coming into Thursday gap up after an overnight session featuring elevated range and volume. Price was balanced overnight, moving higher initially after Facebook reported earnings, then rallying again after 3am. At 8:30am advance goods trades balance, initial/continuing jobless claims, and durable goods orders all came in better than expected.
At 1pm the US Treasury will auction off $29 billion in 7-year Notes.
Amazon, Microsoft, and Intel are set to report earnings after-market-close.
Yesterday we printed a normal variation up. The day began with sellers driving the market to a new weekly low. This discovered a responsive bid early in the day and we spent the rest of the day chopping sideways before ramping higher into the bell.
Heading into today my primary expectation is for sellers to work into the overnight inventory and close the gap down to 6554.75. Look for buyers around 6532.25 and two way trade to ensue.
Hypo 2 buyers sustain trade above 6631 setting up a short squeeze up to 6700.
Hypo 3 sellers regain Thursday range, sustaining trade below 6532.25, setting up a move down to 6500.
