SPY 15 update - wave 4 hasn't turned purple yet, which means the algo thinks it might have more room to go. Only 21.5% so far. 

Hard not to picture some great scenes in Wolf of Wall St when reading this   

I think even XBI components are surprised. This is probably the 1st election cycle in the last 30 years where biotechs and pharma weren't the brunt of withering political attacks that drove their stock prices down until after the election. Both candidates and all the congressional peeps now just engage in spending promise competitions. Both presidential candidates are lifelong members of the same party - one still there, the other is now a "populist"...which is a whole lot like how we described the democrat platform 15 years ago. Have to rethink market dynamics in election years...probably to include buying XBI. 

Market acting like kids when parents pull into the driveway - "Hide the candy and toys! Look sad. Daddy's going to be in here soon and we want a raise in our allowances!"  Meanwhile, the kids, being kids, don't realize they've got chocolate smeared all over their faces and Daddy is going to see sad faces and tears, know it's complete nonsense, and give them an allowance raise anyway.  The Fed week in a nutshell. 

IBIT - this chart is interesting but needs some more research and/or time - the ribbon and the MACD aren't ideal yet, but everything is getting close to an all signals go look. If the Fed goes 50 tomorrow, this should fly (open market committee traders will need the printer to go BRRR so they can buy however many bonds it takes to lower the rate that much). 

Interesting. I like MSTR for a potential catch up...I think. To be honest, I don't know diddly about the fundamentals relative to their BTC holdings (does it trade at a discount or premium to its BTC holdings?, etc)...but it sounds interesting. 

IBIT / BTC - crypto doing the banana dance today!

I fat fingered a trade on Coinbase saturday night and bought 10 times as much as I wanted to...but then thought twice about reversing the trade because the coinbase fees are crazy and the trade bumped me to a new fee structure (after raping me on that trade) but hadn't been counted yet (they charge 1.2% per side now at the base level....2.4% round trip!! Madness). Anyway, I'm cheap and I have been wanting to go big and put some coins in cold storage so I just said F it on reversing the trade...even though I didn't like the chart where I bought. Working out so far. LONG term hold.

I recently decided that BTC in a hardware wallet is going to be my equivalent to holding physical gold.  

SPX is only at the 7th green daily candle in a row. Feels like 20 for some reason   

Here's a slightly different take on the 15 min timeframe (1st chart). Second chart is 2 hour.  

Don't shoot the messenger - I'm just passing on someone else's info / algo results. 

It amazes me that people still listen to CNBC at all. It's not like their nearly useless, short form commentary is a new phenomenon. It used to be a matter of not having choice but now there is no shortage of thoughtful, expert level debate and commentary content available - actual 2 sided discussions where they tackle trading, finance and econ issues that can't be understood with 30 second segments (lots of live content if that's your jam). However, you're not going to find this anywhere in your cable TV channel lineup. Cable is a waste of money now except for sports.  

You could make an argument for watching CNBC if you're a long term only investor type since it's an equity sales show at it's core and you get to hear lots of sales pitches all day long. But I don't think there's any argument for traders watching it...especially shorter term traders. There is a ton of actual live trading content available. Why would you listen to equity sales pitches from financial advisors when you could be listening to other traders trading the markets in real time? 

Very complicated question. No one knows for sure in the short term and there's a lot of debate and disagreement on what it even means anymore given the changes in manipulation patterns (e.g. QRA going from a typically 80/20 mix (long term bond sales to short term) to a 20/80 flip (20% long term debt to fund gov debts and 80% short term sales). In theory financials should do poorly with an inverted curve because the whole system is designed around borrowing short and lending long. But right now they are 1000% focused on escaping the CRE debacle without a systemic crash event (they are desperate for lower rates to refi) and will worry about longer term viability if they make it through.  They've been in extend and pretend mode for a couple of years now waiting for tomorrow, but they know they're running out of leash. This is the elephant in the room when it comes to demanding 50 tomorrow - saving the rich bank owners that made bad decisions. 

I'm pretty sure the Fed leaked the 50 hint just to ensure a more positive reaction to 25 - as in, oh, they only did 25 so there's nothing really bad happening behind the scenes to worry about, game on...but we'll see. 

Index under tension
Beggin' you to trap and go

Highway to the Banana Zone
Ride into the Banana Zone

Should be fun trading Wednesday and on from there for probably at least a week after that.  Market historically loses its shit on a 50 or more cut to start the cycle....but comparing this market to anything historical is tough due to the nutty circumstances with fiscal policy (banana zone policy) as we enter the easing cycle. I'm not aware that there are any historical comparisons that fit well enough to make plausible predictions.  So, I'm essentially buying short term straddles expiring a week out (offset a bit...so not exactly straddles) and planning to take profits on the 1st big move Wednesday afternoon almost immediately and then let the other side ride for free. I'm looking for a single if the move continues in the initial direction, but potential home run if we get a big headfake...in either direction.  

I'll admit, I will be absolutely shocked if there isn't a big headfake between Wednesday at 1:45 and the close on Thursday...I just am not convinced on the direction. Banana zone theory suggests we go lower initially and then crash higher...but I didn't trade Argentina in 2017 and have no real experience with this, so who knows. 

Market is just as confused as the Fed. I have a hard time believing, as a whole, the market isn't capable of basic math that shows the real economy (ex the 4% excess Gov stimulus) has been and continues to be in a fairly deep contraction (the move towards 50 all but confirms this).  However, asset prices obviously have a hard time going down with currency being diluted / debased at this rate. It's really an economic horror show if you're a Fed official...especially since they can't say a negative word about where the fault lies (with the treasury, executive and legislative branch).  The Fed doesn't want asset prices to rise rapidly while the real economy contracts. That's a recipe for social disaster...which we are speeding towards rapidly, mostly under the guise of compassion.

The confusing part continues to be that asset prices rise while the economy weakens.  It's just reflexive for everyone to want to sell, but they are forgetting the dilution aspect that is dominating the equation. 

We might actually finally be solidly in the Rao Pauls banana zone (banana, as in banana republic).  He and others like him have been saying that when control of the monetary system is lost, the market will skyrocket 20% or more in a very short time. At least if it happens now, I can explain that it was pretty obvious to see coming when my grandchildren ask about it. I could see price just busting higher next week and not looking back.  The charts and circumstances are lining up very well for a major historical moment -the Fed is hinting at 50, inflation data came in warm, Gov is running a 6% deficit, Gold and other hedges against currency devaluation are crashing higher and equity markets are essentially at all time highs. Market crash seems very likely - crash HIGHER.  

I've tried some broker programs that offer to auto trade strategies over the years and got my ass handed to me every time on what was supposed to be very low risk.  So....I'm due for a win! Haha. Not the way it works, but I'll probably try it out with small size because it's always sounded ideal to me (who doesn't like making money while sitting in a hammock on the beach nowhere near a computer?). I'm seeing more and more people talk about limiting the exposure to their strategies with AI and auto trading. Makes sense. If everyone does the same thing, that thing will no longer work - because math.

If it actually works at scale, you'll probably get approached by an institution that pays you to take it down immediately, sell it to them, and never use or speak about it again. They don't call it "black box trading" for nothing. 

URA - 1st checkback after going crazy off a double bottom? 

Agree about casino. I find it a bit gross and obscene to profit off stealing from the middle class and poor like this, but at least it's predictable these days. I was buying almost zero cost spreads near the bottom that have absolutely exploded.  For example, I had a bunch of

SEP 18 5600 (+1)
OCT 4 5700 (-1)
OCT 4 5800 (+1)

They absolutely exploded higher this week.
I had the same setup going to the downside. Because I had most setup as nearly zero cost and a credit in some cases, I lost very little on the downside put protection, but I could sleep knowing I was good if we opened up down 150 SPX points (or more).

This trade required massive movement in a short time to work. But that's what we've been getting, so it was a no brainer to put it on in size. 

Long story short - dollar strength (over a certain level) has been a consistent sign of dysfunction in the global economy in the era of globalization. I love a strong dollar as a traveling American, but I also get that if you crush your trading partners a global recession will eventually come back to bite us all (I'm definitely not saying I agree with the approach - only that I understand it...to the extent a non phd economist can understand it). 

Fascinating event coming up. Jerome cannot be completely honest about needing 50 (that's 100% honest) but he needs to essentially crash the dollar ASAP (keep crashing it). He's a saint, so the election plays no part in his thinking, but I'm sure the market does (e.g. he doesn't want to spark a crash).  If I was stuck in his position, I would do 25 and hint in very strong ways, just short of coming right out and saying it, that there would be AT LEAST a 50 cut in November. The dollar would dump immediately and the banks and wealthy would cheer. I'm just not sure how he accomplishes that with hints (you know he's not going to say it directly).  And, I still think he is riding a fine line to significant weakness because emotional humans are trading, not machines that realize that QE is either here already or coming quickly.  

Or maybe he's playing 4D chess and leaked the 50 to get some shock value out of the 25 and plans to make up the difference ++ in the background with QE (e.g. many people will be thinking something is very wrong if 50 so they might be shocked in a positive way with a 25, whereas it didn't have that kind of dynamic embedded before the leak).