Founder's Trading Journal 0 Comment “How about this – a spike low and rebound tomorrow? Then a retest right on the 20-week cycle and options expiration around the 21st?”A.F. Thornton – Last Paragraph Yesterday’s Blog Good Evening:Don’t you hate someone who said I told you so? It was not my most probable guess for today – but apparently, it was what the doctor ordered.Not that I made as much money as I could have. There turned out to be more profits left in the puts we cashed in yesterday, but only if we were quick to the draw this morning. And I could have entered lower on the long side even for some day trades today. I had a good pre-market trade, but that was it today. In a sense, I am haunted by not wanting to give back our incredible year-to-date gains in a wrong-headed move. I need to get over that.Besides, the Navigator Swing Buy signal was the focus of the day, and the spike low. We had been close the last few days, and it finally kicked into high gear at 3601.Then the waiting game began. We had to see if traders would accept prices above 3600. A reversal before the close could have erased the buy arrow. I have seen that happen more than once.So we set the parameter as a buy as long as the market closed above 3651, and it did.There were any number of ways to enter with a stop, etc. But we will use the close at 3681.75 as our official entry.We will buy pullbacks to the 5-day line until another sell signal presents. For now, the Founder’s Group has their stop set at 3645.50 in case we need to give the price some breathing room tomorrow. Be advised that we will change that on a dime if need be.Closes below the five-day line are a good stop proxy if you have no other strategy.We move our stop around, preferably up throughout the day, but you need a subscription for that information. For now, at least you have a general idea of what we are doing.If you have been following the Blog, there should be no surprises about this low, and there is no point in rehashing why we had been looking for it.Could it be THE low? Ollie Ollie in Come Free?Sure, it could be, but I seriously doubt it. Think of it more as taking a break at camp as we continue to repel down the mountain.And what about that retest? Or was this a retest? I will better assess that over the weekend. A good follow-through day would make the analysis moot.And anyway, the Navigator Algorithm knows, and it will tell us what to do next. We will keep it tight – using 60-minute RTH and 120-minute ETH charts rather than the daily chart to monitor the signals.Next stop? Break the downtrend line (happening in Globex already), then revisit the mean at 3740. Solid support lies at 3651, and we start running into resistance at 3770, assuming we can clear the mean at 3740.Regression to the mean is all about this: the “rubber band” principle. We just snapped back after getting too far below the mean on the daily chart.If you did nothing but run a 21-period line in just about any time frame and study it, you would find this an easier process than you might otherwise believe.That is how I start my weekend reviews. A plain candlestick daily and weekly chart with the 21-period line only – nothing else.Of course, I also want to know if a new moon is due and how Mars aligns with Mercury and Venus.Just kidding – I wanted to see if you were still paying attention.Have a great weekend – the next Blog will come on Sunday evening or Monday morning for non-subscribers.A.F. ThorntonP.S. Why would the market rally here other than short-covering? The reasons always become apparent in time. Anyway, it is much too early to draw any conclusions and the bond market still looks like a Mac truck (electric of course) ran into it. Remember – “it’s the bond market, stupid” and electric vehicles have a lot of torque.
Founder's Trading Journal 0 Comment S&P 500 Index Continuous Futures / Today’s Close – 3588.50 / -10.75 pts (-.30%) Published Wednesday Evening Navigator Swing Strategy™ Current Position: Cash/Neutral @3632.50 on 10/11/2022 Stop: Neutral Last Signal: Closes Short Position from 10/5/2022 @3769.50 for 137 points S&P 500 Index Gain/Loss from Neutral Signal: - 44 Points / - 1.20% *** S&P 500 Index Continuous Futures - On The Edge Navigator Algorithm™ Trends Hourly: Neutral Daily: Neutral Weekly: Bearish Monthly: Bearish Navigator Trading Sandboxes™ Click here to learn about Trading Sandboxes and how they work. The table below lists the granular price obstacles a trader will encounter inside the expected move ranges. The DEM and WEM help us narrow our focus for the day and week ahead. We also included a few important price levels outside the range boundaries – for the less probable occasions when the price exceeds the edges. The table reflects the key trading levels for Thursday, 10/13/2022. S&P 500 Expected Move Table of Key Price Reaction Levels To successfully navigate this data, traders need to monitor the price auction with volume profile histograms for the day and a cumulative profile aggregating the last 10-20 sessions. As price travels north or south from level to level, volume tapers off at reversal points, and the process begins anew in the opposite direction. Professionals call this “price discovery.” Founder's Journal and Trading Notes Below are a few relevant excerpts for today from A.F. Thornton’s trading journal. Check out the full notes with a paid Subscription, which also includes access to Mr. Thornton’s live charts in the Founders Trading Room. The full journal contains Mr. Thornton’s daily trading plan and reflections on his daily gains and losses. References to “the Market” below mean the S&P 500 Index. The quoted numbers are from the front month E-Mini Continuous Futures Contract (now December 2022). A few excerpts on today and what to expect tomorrow... “Up until now, the market has repriced itself in light of higher inflation and interest rates. And enough is enough – as the financial system teeters on the edge. The next repricing will be about earnings revisions – or not. The data is not sufficient yet.” A.F. Thornton – Wednesday, October 13, 2022 Good Evening:Well, I wanted to hold onto our puts/short futures positions, but my instincts told me otherwise, with 137 points of S&P 500 futures gains per contract on the table. Yes, you tie up some margin, but that is $6850 per contract in profits in four trading sessions that could evaporate if the shorts panic.The Founders Group sold them yesterday and nailed the 137 points.I could be wrong that the crowd is too negative and the institutions have too much cash here, but I am not long, either. Cash is fine for now. As I always say, pigs get fat, and hogs get slaughtered.And isn’t our job to see what everyone else sees but think about what they haven’t thought?The wholesale inflation numbers disappointed the street this morning, and the Fed minutes were hawkish. Yet the market yawned.Defense of the 200-week line at 3595 remained the ruling reason of the day.I think the market will shift attention to earnings issues now – and the jury is still out on that front.Energy and raw materials are still cushioning the indexes thanks to the Orwell Administration’s latest blunder with Saudi Arabia. Orwell has fewer and fewer friends left in the world.And then there is that October surprise? What will it be? What about midterms?And I still keep asking myself – why aren’t the indexes worse off, with all things considered? If they are not going down, they are likely to go up. Maybe the sellers are exhausted – for the moment.Recall June? A little “M” formed in the lower realm of the chart before we took another spill.Anyway, all these thoughts float through my mind in morning meditation – or is it prayer?Anything is possible tomorrow with the pre-market CPI print. That is the real point. Besides, there are a lot of shorts trapped here if the numbers are at or below consensus, and I don’t like that playground.By no means am I bullish, nor is the bear market over by a longshot. I just find that 3600-ish is not a highly predictable zone where I want to participate. And if I did participate and if a crapshoot inflation report wasn’t on the table, I would favor longs for a short-covering rally.In simple terms, I don’t enjoy getting my face ripped off in a short-covering rally – unless I am long, of course. I wish I had more conviction. The algos flirting with a buy signal on the daily chart isn’t helping my otherwise bearish nature.Oh, I almost forgot, is NATO wise to practice nuclear war games to flex for Russia? How does Putin know it isn’t a cover to take him out?And while you are looking over there, President Orwell wants to install the digital dollar, and there are rumors that the October surprise is President Orwell granting amnesty to all the illegals. Hence, they are eligible to vote in the midterms.And while we are all distracted, do you think China will allow America to arm Taiwan to the teeth, or will they blockade the shipments? You decide.How about this – a spike low and rebound tomorrow? Then a retest right on the 20-week cycle and options expiration around the 21st?Sweet Dreams Tonight!A.F. Thornton BluPrint’s business model for retail services is sharing the buy/cover short and sell/short signals generated by our proprietary Navigator Algorithms™ for the S&P 500 index. Subscribers can implement the signals with the SPY ETF, SPX or SPY options, S&P 500 EMini (and micro) futures, or a combination of these instruments as the context warrants. Futures and options are leveraged instruments that involve high risk, volatility, leverage, and loss. They have different characteristics with comparative advantages and disadvantages. With leveraged futures, you could lose more than your original investment. Past performance does not guarantee that you will achieve similar results, nor do we.A.F. Thornton is not a financial advisor, nor is he your financial advisor. He only expresses his opinion based on his experience. Your financial situation and experience may be different. This blog is for educational and inspirational purposes only. Your investments are solely your responsibility. You must conduct your own research. Click to Learn More About Navigator™ Trading Subscriptions Share with Friends and FamilyWord 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. 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Founder's Trading Journal 0 Comment Good Morning: Yesterday, the Founders Group covered their remaining short positions at 3632.50 – preferring a neutral stance going into today’s publication of the September Fed Minutes and the wholesale Inflation numbers, not to mention tomorrow’s retail inflation reports. One concern is that the 3600 level has been sticky and perhaps even supported by the Fed Plunge Protection team. At this point – it is a bit of a crapshoot trading into these reports, particularly the CPI report on Thursday. Today, the options market is pricing in a 50-point range plus or minus yesterday’s close at 3616.13. Tomorrow’s range is wider; we will report on that after today’s close. Interestingly, today’s range is not greater than the “normal” range we have been experiencing when no economic reports are due. If we bounce here, I expect behavior more like June before another leg down. It is still fine to use the 3655.25 buy stop for short positions if you remain bearish. The market had a lot of good reasons to capitulate yesterday considering European events but didn’t. We can never know the future, but when the market stops falling on bad news, a low could be closer than we think. Also, the market has tended to rally when the VIX approaches 35 lately. Inflation is already expected to be high, so it would take an appreciable miss to drive prices lower – and I don’t rule that out. I do not have strong evidence in either direction. There will be time to reposition later this week whatever the market decides to do. The Key Levels remain the same as in the previous table, adjusting slightly for moving averages. A.F. Thornto
Founder's Trading Journal 0 Comment S&P 500 Index Continuous Futures / Today’s Close – 3625.25 / -28 pts (-0.77%) Published Monday Afternoon, October 10, 2022 Navigator Swing Strategy™ Current Position: Cash/Short @3769.50 on 10/5/2022 Buy Stop: 3655.25 Last Signal: Closes Long Position from 10/3/2022 @3677.50 for gain of 90 points S&P 500 Index from Short Signal: - 161.50 Points / - 3.91% *** S&P 500 Index Continuous Futures - On The Edge Navigator Algorithm™ Trends Hourly: Bearish Daily: Bearish Weekly: Bearish Monthly: Bearish Navigator Trading Sandboxes™ Click here to learn about Trading Sandboxes and how they work. The table below lists the granular price obstacles a trader will encounter inside the expected move ranges. The DEM and WEM help us narrow our focus for the day and week ahead. We also included a few important price levels outside the range boundaries – for the less probable occasions (like yesterday) when the price exceeds the edges. To successfully navigate this data, traders need to monitor the price auction with volume profile histograms for the day and a cumulative profile aggregating the last 10-20 sessions. As price travels north or south from level to level, volume tapers off at reversal points, and the process begins anew in the opposite direction. Professionals call this “price discovery.” Founder's Journal and Trading Notes Below are a few relevant excerpts for today from A.F. Thornton’s trading journal. Check out the full notes with a paid Subscription, which also includes access to Mr. Thornton’s live charts in the Founders Trading Room. The full journal contains Mr. Thornton’s daily trading plan and reflections on his daily gains and losses. References to “the Market” below mean the S&P 500 Index. The quoted numbers are from the front month E-Mini Continuous Futures Contract (now December 2022). A few excerpts on today and what to expect tomorrow... The market caught its breath Monday, with bulls and bears evenly matched and leaving an indecision (Doji) candle on the chart with a slight index loss.The Founders’ Group has high cash positions and some puts – so it was a good day for us.Today’s market could have been worse – and the market managed to hold 3600. Mercifully, the bond market closed for Columbus Day.Buying came in 25 points above the recent low – so there is demand, even if it is primarily the Fed Plunge Protection Team. Sell them all they want – they caused this mess and deserve their mounting losses.I cannot remember such doomsday headlines – I hope they are not right. But it takes abject fear to usher in another tradable low in the current realm.Wednesday is the day – Fed Minutes and CPI are on deck. It isn’t easy to know what happens between now and then, but all the key levels are in the table and marked on the chart above.Markets don’t crash when the crowd expects them to – so we shall see what the markets deliver. With monthly options expiration on the 21st, I expect selling pressure will continue into that date. Recent hikes in gas prices will endure another high CPI reading unless they try to cook the books for the election.And I am still unsure how to gauge the mid-term elections’ impact between now and then – it may have an influence since no side is likely to be happy with the outcome. And we await the October surprise. Marshall law, anyone?Call buying has been scarce – and that remains negative. As I said last week, man cannot live by puts alone. But the WEM low at 3530 or so is supposed to catch us in a fall – at least for the week.Oh, by the way, the cradle trade is not dead, but it is starting to drip like a Weeping Willow Tree.And the 200-Week Moving Average at 3595 is also trying to act as a safety net. Price acceptance below it would be unpleasant.Note the Founders’ Group is keeping the Swing Buy Stop for our Swing Shorts at 3668.50, which still gives us a 100-point profit on each futures contract and something analogous on our puts.This kind of market confounds even the best of us. It will go up when you think it will go down, and vice versa. The bad news is good news. The good news is bad news – at least for the markets.But the trend is down until proven otherwise, and the trend is your friend.Anyway, “it is the Bond Market stupid” to steal a slightly altered phrase.More concerning – it is the U.S. Treasury market. A nuclear bomb might become somewhat attractive if the U.S. Treasury Market seizes up or goes the way of the Bank of England.Strap in – crash or no crash, we are in for a long, dark winter. When the market peaked in 1966 – it went sideways across the channel for 16 years.I have renamed the January peak in the S&P 500 Index “Bliss.” Why? Because I don’t think I will ever see anything like we have experienced the past 40 years to bring us to that high.It is not unlike when people ask me how I knew the 40-year bull market in bonds had ended. Simple, when interest rates hit “0,” I thought the bottom in rates was close at hand.Will it be the same for stocks? I sure hope not.A.F. Thornton BluPrint’s business model for retail services is sharing the buy/cover short and sell/short signals generated by our proprietary Navigator Algorithms™ for the S&P 500 index. Subscribers can implement the signals with the SPY ETF, SPX or SPY options, S&P 500 EMini (and micro) futures, or a combination of these instruments as the context warrants. Futures and options are leveraged instruments that involve high risk, volatility, leverage, and loss. They have different characteristics with comparative advantages and disadvantages. With leveraged futures, you could lose more than your original investment. Past performance does not guarantee that you will achieve similar results, nor do we.A.F. Thornton is not a financial advisor, nor is he your financial advisor. He only expresses his opinion based on his experience. Your financial situation and experience may be different. This blog is for educational and inspirational purposes only. Your investments are solely your responsibility. You must conduct your own research. Click to Learn More About Navigator™ Trading Subscriptions Share with Friends and FamilyWord 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. Facebook Twitter Email LinkedIn
Founder's Trading Journal 0 Comment S&P 500 Index Continuous Futures / Friday’s Close – 3639.66/ -103.50 pts (-2.76%) Originally Published in the Wee Morning Hours of Monday Morning Navigator Swing Strategy™ Current Position: Cash/Short @3769.50 on 10/5/2022 Buy Stop: 3677.50 Last Signal: Closes Long Position from 10/3/2022 @3677.50 for 94 points S&P 500 Index Gain/Loss from Latest Signal: - 129.84 Points / - 3.44% *** S&P 500 Index Futures - Daily Candles - Navigator Algorithm with Navigator Algo Panel Readout Navigator Algorithm™ Trends Hourly: Bearish Daily: Bearish Weekly: Bearish Monthly: Bearish Navigator Trading Sandboxes™ Click here to learn about Trading Sandboxes and how they work. The table below lists the granular price obstacles a trader will encounter inside the expected move ranges. The DEM and WEM help us narrow our focus for the day and week ahead. We also included a few important price levels outside the range boundaries – for the less probable occasions (like yesterday) when the price exceeds the edges. S&P 500 Expected Move Table of Key Price Reaction Levels To successfully navigate this data, traders need to monitor the price auction with volume profile histograms for the day and a cumulative profile aggregating the last 10-20 sessions. As price travels north or south from level to level, volume tapers off at reversal points, and the process begins anew in the opposite direction. Professionals call this “price discovery.” Founder's Journal and Trading Notes Below are a few relevant excerpts for today from A.F. Thornton’s trading journal. Check out the full notes with a paid Subscription, which also includes access to Mr. Thornton’s live charts in the Founders Trading Room. The full journal contains Mr. Thornton’s daily trading plan and reflections on his daily gains and losses. References to “the Market” below mean the S&P 500 Index. The quoted numbers are from the front month E-Mini Continuous Futures Contract (now December 2022). A few excerpts on today and what to expect tomorrow... Today is a semi-holiday – Columbus Day – with the Bond Market Closed. So it will be a light day for us today.We call it the “Cradle Trade.” The market launches a rally and then returns to the Algo Trigger Line. In a healthy market, it would be touch and up from there.And a cradle is what it looks like in Globex. Traders pushed the market below Friday’s low and brought it back nearly to Friday’s half-back on the Candle. Slightly bullish, maybe?And for Today’s Blue Light Special, that pesky bond market and the banks are closed for Columbus Day. Bankers never met even a pseudo-holiday they didn’t like.But we still have the CPI and PPI numbers on Wednesday and Thursday, and bank earnings will get served up soon.Global events continue to haunt us as well.Let’s see how it goes in our 250-point range forecast for the week ahead.Don’t forget the air pocket below 3600. The next significant volume spike (support) is down at 3350.A.F. Thornton BluPrint’s business model for retail services is sharing the buy/cover short and sell/short signals generated by our proprietary Navigator Algorithms™ for the S&P 500 index. Subscribers can implement the signals with the SPY ETF, SPX or SPY options, S&P 500 EMini (and micro) futures, or a combination of these instruments as the context warrants. Futures and options are leveraged instruments that involve high risk, volatility, leverage, and loss. They have different characteristics with comparative advantages and disadvantages. With leveraged futures, you could lose more than your original investment. Past performance does not guarantee that you will achieve similar results, nor do we.A.F. Thornton is not a financial advisor, nor is he your financial advisor. He only expresses his opinion based on his experience. Your financial situation and experience may be different. This blog is for educational and inspirational purposes only. Your investments are solely your responsibility. You must conduct your own research. Click to Learn More About Navigator™ Trading Subscriptions Share with Friends and FamilyWord 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. Facebook Twitter Email LinkedIn
Founder's Trading Journal 0 Comment Good Morning:A stronger-than-expected September Employment Report has dashed the expectations of the Fed Pivot Crowd, almost ensuring another 0.75% rate increase at the next Fed meeting.So the next major report comes in a week, with September CPI (inflation).At this writing, the market is not taking the report well and is trading below the key five-day line.While the possibility of one more leg higher is still on the table, or something more complex with fits and starts, as we saw in late June, the market is on a foundation of shifting sands rather than the solid low bantered about in the media.Our swing accounts are either in cash or short for now per Monday’s sell signal, so stay tuned. Let’s see what happens in the regular session.If any changes to strategy are appropriate, the Founders’ Group will indicate as much.Have a great weekend.A.F. Thornton
Founder's Trading Journal 0 Comment We are on the precipice – and the bottom of the cliff may still be a long way down from here. This is an important but short video on the stock market’s current location, next moves, and timing of the foreseeable cyclical lows. A.F. Thornton
Founder's Trading Journal 0 Comment The Founders’ Group has exited the recent Navigator Swing Buy at 3769.50. More on this later today.
Founder's Trading Journal 0 Comment Good Morning:My tolerance for giving up our swing buy gains is low. I had wanted to see the index hold 3775, and we are slightly below that level in Globex – so my finger is on the sell trigger. All I see is market participants moving their put positions around. If they are not buying calls – the rally is unsustainable.Resistance remains at 3800, with support at 3749, then 3700.A.F. Thornton