April 2022 | Archimedes Methodologies

Founder's Trading Journal

Morning Notes – 4/4/2022

Apr 4, 2022 AF Thornton 0 Comment

Good Morning:

Inflation caught up with food prices in Germany, which are set to rise 50% at the major grocery stores today.
Russia cut at least one gas pipeline to Europe over the weekend. The UK is most affected, but all of Europe must find a way to energy independence soon.
There has been no progress in a Russia / Ukraine settlement or cease-fire.
There is a lot of chatter about the inverted yield curve and recessions. Both the yield curve and low Consumer Confidence would validate a recession in the near future, but it has not arrived as yet.
Volatility picked up a bit after Friday’s weekly expiration. I am expecting plus or minus 34 points from the open today (about .75%).
The bulls still have the edge at the moment, but 4500 is critical support.
Upside resistance is at 4550 and then 4600.
4600 is where dealer flows begin to support the market.
4500 is where dealer flows become negative for the market.
Between the two key levels is somewhat of a void. But whichever level breaks will lead the next direction up or down.
Even though each of these levels is further away from the current price (about 1%) than the volatility estimate (about .75%), I would not be surprised if we tag one of the levels today.
The Weekly Expected Move range this week is 4450 (about where the 21-day line sits) to 4620 which is near last week’s high).
The weekly candle for last week was a bearish spike reversal. However, it needs to be confirmed today by a lower close to be valid.
I have been a bit under the weather the last few days, so I will be keeping it brief and won’t be trading today or tomorrow.
Obviously, there are a lot of issues on the table right now but stick with the usual plan. Swing Traders need to stay in cash for now.

A.F. Thornton

Founder's Trading Journal

Interim Report – The After Trade – 4/1/2022

Apr 1, 2022 AF Thornton 0 Comment

So here is the image of the market from this morning when I alerted you that we were coming into a turn. All of the colors and levels went to our Navigator Day Trader subscribers pre-market,

We initiated the trade at the bottom of the green zone. There is a Tick, VIX, and Momentum divergence on the low, alerting us to the coming pivot.

Here comes the turn – right off the bottom of the green zone.

We take the profit as we come back up to the Volatility Trigger. The profit is about $825 per contract after spreads and costs. Your profits depend on how many contracts you did. Even on a micro, it is $82.50 per contract.

I don’t really know or care what the market does from here. I would theorize that the support of the Volatility Trigger and 5-day EMA are now resistant. So we made the easy money; why worry about another trade on a Friday afternoon?

So now you see how this works for Navigator Day Trader subscribers. They paid for their monthly subscription two times over in a single session on one contract. And we mapped the entire day out for them ahead of time.

You can learn more about our subscriptions here.

A.F. Thornton

Founder's Trading Journal

Interim Update – 4/1/2022

Apr 1, 2022 AF Thornton 0 Comment

S&P 500 Continuous Futures RTH Data – Wedging onto Morning Reversal in the Green Zone?

On the bearish side today and per Spike Rules, we now have acceptance below yesterday’s spike low into the close. And the Index is trading below the 5-Day EMA (Red Line), and the Navigator Sell Trigger (Purple Line). Also, we are trading below last week’s high which would leave a spike reversal on the weekly chart if the market closes below 4539. And we are trading below the 4525 Volatility Trigger.

On a positive note, there is a falling wedge into the green zone Daily Expected Move low just above 4600. So a price reversal is imminent, and we will see how far up it carries us.

Intraday action can look bad at lunch and then completely reverse by the close. So it is the close that counts, and we will see where that takes us. Since price has been inside the falling wedge all morning, at best there have been some scalp trades but nothing traders could ride very long.

I am not trading today, but I will pass along these few thoughts.

Have a great weekend!

A.F. Thornton

Founder's Trading Journal

Morning Notes – 4/1/2022

Apr 1, 2022 AF Thornton 0 Comment

Good Morning:

Only a catastrophic March jobs report coupled with even more negative data could shake the Fed’s determination to pursue a 50bps rate hike in May.
We got a modest miss, so we expect a 50bps hike next month.
The Fed will focus on wages, up 5.6% over the past year. With real inflation running around 15%, this should keep the rest of us down and out where our esteemed ruling class likes us.
And that left March’s monthly candle looking like the market explored only slightly above February’s candle before being rejected. It was a bull bar nonetheless, but suggestive of a potential trading range forming.
Also, keep in mind that 4539 is last week’s RTH high. If we close below that level today, we will have a spike reversal candle on the weekly chart.

And while I am the first to caution about gleaning too much from the last day of a calendar quarter or month, the S&P 500 failed on a reconnect with the 5-day EMA, closing slightly below it and triggering a formal sell signal on the Navigator Algorithm.
Let’s see how it goes this morning, but the fat, squatty, 45-degree angle overnight profile would suggest that traders won’t easily conquer 4550 or so if we travel north.
Volatility-wise, we are still looking at a small range today of plus or minus 28 points from the open. Support is at 4525, then 4500, with resistance at 4550 and 4600.
The 5-day EMA is inside the range and remains at a critical resistance level. It is about 4545 before the Open. But put it on your charts, as the EMA is dynamic, and we cannot quote an exact level. It changes with the price action.
I hope you noticed that the expected ranges I quote for the day and week hold up exceptionally well. But yesterday, they competed with my other prediction.
Some 60/40 funds were rebalanced in the last hour, causing a significant drop in equities and a big bond jump. Rebalancing explains the two red stock market candles on the final two days of March. We expected as much.
But that also leaves Spike Rules in play this morning.
Depending on the context, I mark the range in quartiles from green to red and initiate long trades in the first and short trades in the top quartile.
While the expected range today would see the market closing above 4500. The next downside target would be the 21-EMA at 4460.
President Biden decided to release half of our strategic oil reserves at 1 million barrels per day through May.
Of course, he is trying to bring down prices at the pump as the only thing lower than his poll numbers is the shale deposits he adamantly opposes.
The release, like so many things he does, is unwise. We are not in any kind of genuine emergency, other than Congressional midterms coming up where the Dems appear to be on course to being wiped out – absent more cheating.
You will recall that President Trump filled the reserves to overflowing when the price of oil fell below zero in May 2020. It does not get much better than that.
I will have a lot more to say about our global position in the monthly letter.
Here is a teaser, were you ever on a losing team growing up? When I realize that 146 countries have signed on to the Belt and Road Initiative with China, I feel like I am on the losing team.
From the pure number of Countries lining up with China, it is starting to get lonely as the U.S., Canada, and a few countries left in Europe. Here is a good link with some in-depth discussions. With Russia now on board with China, you will see a new monetary system, and we will not be part of it.
April historically is the best month in the stock market. So let’s get to it and try to have some fun in this otherwise glum environment.
I just posted all subscriber charts.

A.F Thornton

P.S. Have you read about China’s Belt and Road Initiative? Am I out on a limb here, or is China’s global influence and reach getting scary. How do you feel about Chinese missiles in Cuba or South America? Email me and tell me what you think.

Share with Friends and Family

Word of mouth is crucial for growing our trading community and providing education and support for your trading decisions. Please feel free to share this with your friends and family if you find the information beneficial.

Archives April 2022

Morning Notes – 4/4/2022

Interim Report – The After Trade – 4/1/2022

Interim Update – 4/1/2022

Morning Notes – 4/1/2022

Share with Friends and Family

Subscribe!