Archives October 2022

A.M. Notes – 10/5/2022

SpotGamma Option Mile Markers
SpotGamma Option Mile Markers
Tier One - SPX Gamma by Strike
Tier One - SPX Gamma by Strike

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

Interim Update – 10/4/2022

Good Morning:

  • The Founder’s Group executed a Navigator Swing Buy yesterday (officially announced at 3672.50).
  • The signal gripped, and the market will gap open at our first target. Gap Rules apply.
  • We will monitor for continuation. But if and when the 3751.25 level is conquered, short-covering will kick into higher gear,
  • We have no evidence that this is THE bottom, just a tradable short-covering bounce. We still have more Fed speak today, which could help or hurt – we don’t know for sure.
  • The next big major report is the employment report on Friday, which is where we expect this short-covering rally to end, and the market turn south again. We will see how well our crystal ball works.
  • For today, we are carrying forward a 3715.75 stop on our swing position.
  • Global events have more potential than normal to derail our best-laid plans.

A.F. Thornton

Interim Update 2 – 10/3/2022

The Founder’s Group issued a Navigator Swing Buy signal earlier this morning at 3672.50. The market must close above Friday’s Regular Session high at 3684.50 for the signal to validate. The original signal presented at 3613.50, but the Founders waited for more confirmation – including a break of the short-term downtrend line and a couple of closes above the mean on the hourly chart. 

We have no evidence that this is THE bottom, just a tradable short-covering bounce. We still have potential Fed speak ahead today, which could help or hurt – we don’t know for sure. It is not unwise to wait to execute until the close – which would confirm our 3684.50 validation requirement or not.

The Founder’s Group chose to be early, using a 15-minute trailing stop. The market still has to move through last Thursday’s Gap resistance. But if the market follows through, our first target is 3750.

A.F. Thornton

Interim Update – 10/3/2022

Election Deniers

I don’t know about anyone else, but I think election deniers seriously damage our country and, perhaps, should serve jail time for treason. Watch the short video below and tell me what you think about the “Big Lie?”

As an ironic side note, Hillary Clinton’s stealthy hiring of Igor Danchenko and Christopher Steele’s use of eager Russian sources to find dirt on her political opponent Donald Trump are ironic ways to warn about the dangers of Russian election interference.

But they all do it – they all lie in the government. And they are all Hippocrates. Whether an R or D follows the name is irrelevant these days. Someday, the government will tell us something important – and we won’t believe them because they have no credibility. Remember the “Boy who cried wolf?”

Next Swing Buy Signal

The market seems to be meeting my expectations this morning, but we still need to see what comes from the emergency Fed meeting. A close above Friday’s regular session high at 3684.25 triggers a new swing buy signal, and the price seems to be closing in on the signal.

Who said this?

“Do we want to have here, in our country, … “parent number one, parent number two and parent number three” (they have completely lost it!) instead of mother and father? Do we want our schools to impose on our children, from their earliest days in school, perversions that lead to degradation and extinction? Do we want to drum into their heads the ideas that certain other genders exist along with women and men and to offer them gender reassignment surgery? Is that what we want for our country and our children? This is all unacceptable to us. We have a different future of our own.”

“… This complete renunciation of what it means to be human, the overthrow of faith and traditional values, and the suppression of freedom are coming to resemble a “religion in reverse” – pure Satanism. Exposing false messiahs, Jesus Christ said in the Sermon on the Mount: “By their fruits ye shall know them.” These poisonous fruits are already obvious to people, and not only in our country but also in all countries…”

” Friends, today, we are fighting for a just and free path, … in order to leave dictate and despotism in the past. I am convinced that countries and peoples understand that a policy based on the exceptionalism of whoever it may be and the suppression of other cultures and peoples is inherently criminal, and that we must close this shameful chapter…

Ron Desantis  Vladimir Putin – 09/30/2022

The Real War at Hand

Whether sabotaging pipelines or disseminating propeganda, it is becoming increasingly obvious that the World Economic Forum (“WEF”)and Davos crowd is the true enemy of the free “normal” world. Thus far, Davos has successfully conquered the United States in the 2020 Presidential election coup. 

But thankfully, there is hope. Russia, China, India, and Hungary have taken a stand. More countries will follow. Even in yesterday’s Brazilian election, the battle for the soul of that country also looms.

Interestingly, the Davos crowd ran the same play as here in the U.S. in an attempt to steal Brazil’s presidential election yesterday. The election was mostly electronic, with no audit trails to examine. If you want to know how they do it, read “The Parallel Election – a Blueprint for Deception.”

Bolsenero, the traditional values candidate, came in second. But Bolsenaro, fortunately, did well enough to trigger a runoff. As we have learned here in the U.S., traditional candidates do so exceedingly well that the other side has to cheat (e.g., 80 million votes for President Orwell). 

As in the 2020 U.S. election with Trump, all the down-ballot conservative candidates running with Bolsenaro won. But inexplicably and defying any sense of statistical probabilities, Bolsenaro came in second. So the sophisticated Davos-inspired cheating operations continue unabated.

Don’t get your hopes up for the midterms here, either. Despite overwhelming odds favoring traditional patriots, many of the same people are in charge of elections as in 2020. Why would they stop cheating now – when the left risks losing all their power and dreams? The left is already priming the “suppression polls” trying to convince everyone it is a close election. But the truth is that Republicans are 21 points ahead of the Democrats in unbiased polls. But yopu cannot get away with cheating if you don’t pretend the election is neck and neck close.

We are in the battle of a lifetime unless you like what the Orwell Administration and their Davos puppetmasters have delivered since January 2021. And it would not surprise me to eventually learn that Davos unleashed the China Virus in the first place. Nothing surprises me any longer.

Don’t buy the propaganda about Russia. Trust your insticts. Who are the real bad guys in this world right now? Instead, read Putin’s speech. Watch what he does. Putin nailed Davos and the left in his speech. 

Also, recall that Putin was one of Klaus Schwab’s chosen ones (Klaus heads the World Economic Forum in Davos). Putin left the nest in disgust. 

And, is there any doubt who installed the Ukrainian government in the color revolution of 2014? Does the name George Soros ring a bell? Who do you think helps fund the WEF?

I rest my case.

A.F. Thornton

Founders’ Trading Notes – 10/3/2022

Good morning:

We are coming into Monday morning with nuances that will make day-trading unwise today. The nuances include an emergency Fed meeting and multiple Fed governors speaking. Given all we see and while we came into the new calendar quarter neutral, we are on high alert for a swing buy signal for swing traders.

The bear case currently rests on four pillars — excessive valuations, inflation, a hostile Fed, and a looming (if not already underway) recession. I am sympathetic to all four and lean bearish myself, but the end of the world is unlikely at hand.

As an example. various leading indicators of inflation such as commodity prices have been waning lately. But note OPEC is planning to cut production.

There is evidence in positioning, short interest, put volumes, surging CDS, and rising cash levels that we are approaching panic levels. The risk is not so much that the bears are wrong as they appear overly eager.

For day trading today, I would ride a rally up to +1.5% on the upside and then look to short. Or, if the price drops by -3% on the downside first, I might consider shorting. Anything in between is neutral.

The 5-day EMA at 3663.75 would be the first pillar to conquer.

A.F. Thornton

Morning Subscriber Notes – 10/3/2022

Good morning:

We are coming into Monday morning with nuances that will make day-trading challenging today. We are on high alert for a swing buy signal for swing traders.

The bear case currently rests on three pillars — excessive valuations, inflation, and a hostile Fed. Most are quick to add a fourth, “Recession.” While I am sympathetic to all four and lean bearish myself, I would also caution that the end of the world only occurs once for each of us.

There is evidence in positioning, short interest, put volumes, surging CDS, and rising cash levels that we are approaching panic levels. The risk is not so much that the bears are wrong as they appear overly eager.

For day trading today, I would ride a rally up to +1.5% on the upside, and then look to short. Or, if the price drops by -3% on the downside first, I might consider shorting. Anything in between is neutral.
News:

• The Fed has scheduled an emergency board meeting at 11:30 EST. Panicking British, Japanese, and Chinese Central Banks motivated the emergency. The Fed may have to slow down its rate hikes amid signs that the corporate bond and U.S. Treasury markets could break.
• Oil prices are surging again as OPEC looks to cut production. Armageddon or inflation? It is always something, right?
• A plethora of Fed Governors will speak today, coincidence?
o Bostic at 9 EST
o Barkin at 11:45 EST
o Mann at 14:00
o George at 14:15
o Williams at 15:10
• I am unsure if the Fed will adjust the speech times per the emergency meeting. But the Fed is set up to communicate whatever comes out of the meeting.
• US ISM reports come out ½ hour after the opening, including prices paid and manufacturing. The consensus is around fifty-two. Lately, we have seen mixed economic reports, with the economy slowing but no symphony of indicators yet.
• The PCE (inflation) number Friday was unhelpful – and contributed to stunting the morning rally.
Strategy:
• We went into the weekend neutral as the calendar quarter ended Friday, but nothing has changed. The bears have not made material progress for seven sessions. I still see them as trapped.
• It only makes sense to be short at these levels if you expect a crash. And the shorts could be right, but I don’t like the odds.
• I see a falling wedge structure on the daily chart, normally portending a rally.
• The market is holding near recent lows on a boatload of shocking news – last week alone, we saw (i) three central banks around the world hiccup, (ii) Russia annexing part of Ukraine, and (iii) the sabotage of the pipeline that brought Europe 30% of its energy. Bond markets were teetering everywhere.
• The stock market had a negative week, but it should have crashed already if it were inclined to do so. Is it another Fed pivot hope floor? That could easily give way depending on any Fed announcements after today’s emergency meeting.
• Unless the market crashes soon, equity indexes may deliver another rip-your-face-off short-covering rally. Given that the final calendar quarter of the year starts today, FOMO could kick rapidly into high gear on a rally. That is my base case – even if there is too much news risk to day-trade today.
• But as all of you know, I keep an open mind and will switch on a dime if necessary.
• Overnight traders ran the stops under Friday’s low and brought the price back into Friday’s range. The bears did not make any progress.
• Sentiment indicators are in the zone for a short-covering rally as well.
• Per the Weekly Auction Analysis chart, we have a low volume node at 3590 or so, which is also the 200-week moving average and makes this a logical place for a bounce. An air pocket lies below 3590 (with two ancient unfilled gaps), giving prices a quick ride down to 3375 if the index fails.

Summarizing my thoughts this morning, the market has trapped the shorts unless we have an all-out crash which is not manifesting in Globex. I also see a buy algo operating at this writing. There is hope that the bond markets are forcing the Fed to slow down and make a “we will maintain stability” announcement per today’s emergency meeting. We will know more after the Fed Governors hit the speaking circuit. But the next cycle low of any significance is ideally due the third week of October – so today would start a short-covering bounce only – absent a major policy reversal by the Fed.

A.F. Thornton

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