Founder's Trading Journal Afternoon Notes – 3/11/2022 Mar 11, 2022 AF Thornton 0 Comment This is AF Thornton's 15-minute Chart of the S&P 500 Futures on 3-11-2022 at 4-30-pm-EST. The market closed on the Weekly Expected Move low, and bottom of the range. Good Afternoon:Day 16, where is Fauci? No, really, where is he?The “public health” house of Covid-19 cards has collapsed at freefall speed in the last month or so. Every single public health official responsible for (often permanently) damaging our mental and physical well-being with experimental mRNA gene therapy mandates, cruel forced masking, social isolation, and propaganda — down to the county level — deserves the full weight of the legal system pressed on their necks. What they did to children and the elderly is beyond reprehensible.Biden’s Lie of the Day: “Make No Mistake, Inflation is Largely the Fault of Putin.” Of course, they all lie in both parties. But Biden’s latest lie is a whopper, and he isn’t fooling anyone. He forgets that real people put gas in their cars every week. They don’t need a government bean counter to tell them what is happening and when.The true source of the current inflation is the cumulative increase in the money supply measured by M2 since February 2020—an incredible 41.2%. In January, the growth rate of M2, even after three months of tapering bond purchases by the Fed, was still 12.6% over its level a year earlier. That’s about double the rate it needs to be to hit the Fed’s 2% inflation target.Inflation is out of control and will be with us, best guess, until the dollar is gone as the world’s singular reserve currency or the Fed destroys the economy and the stock market with massive interest rate hikes. Inflation will punish the stock market, the real estate market, and the economy at large.But have our illustrious overlords learned anything? I will give you $1.5 trillion reasons that haven’t.It was a clever move at a perfect time. With Ukraine raging and people traumatized over the war, leadership like Speaker Nancy Pelosi (D., Cal.) kept bringing questions back to $14 billion in aid for Ukraine. Members stressed that there was no time to waste — or in this case to read — before voting.And then they voted, $1.5 trillion in deficit spending passed in the middle of the night. Few even read the 3,000 plus page bill. Leadership on both sides held back the bill until the last minute so that nobody had time to read it.Our range trade continued intact today. The S&P 500 traveled back down to close at the 4200 put floor, and Weekly Expected Move Low. The 4200 level has been a solid support level with $3.8B Gamma (combining the SPY and SPX) and the largest of any strike.At the top of the range, $3.0B in Gamma at 4300 is solid overhead resistance over the past week (although pushing a touch through it on the Putin Pop headline this morning).Let’s cover the rest in the weekly outlook on Sunday.A.F. Thornton
Founder's Trading Journal Morning Notes – 3/11/2022 – Expected Moves Mar 11, 2022 AF Thornton 0 Comment S&P 500 Index Futures - These are A.F. Thornton's proprietary expected moves levels for 3-11-2022 and adjusted for Today's RTH Open. Just a couple of quick comments this morning:The market backed way down from the price level at my morning notes.The index rejected the top downtrend line of the falling wedge on the daily chart, even with the Putin Pop, which retraced.The wedge top tracks the falling 21-day line, so the line is also being rejected.I placed the quartile colors on the most likely expected move range for the day.So I see no significant change – the market remains pinned between 4200 and 4300 for now, the fluid range we have discussed the past few days.The index is wedging again and likely will turn higher again soon if you want to catch a quick intraday trade. Wait for an actual pivot.I still see a slight positive bias based on expiration and strike prices into the close.A.F. Thornton
Founder's Trading Journal Morning Notes – 3/11/2022 Mar 11, 2022 AF Thornton 0 Comment Good Morning:I usually arise at about 2:30 am PST. So as I was executing my morning routine, I saw the Putin Pop hit the market at about 3:20 am PST. Initially, the S&P 500 jumped 70 points, right into our resistance wall between 4300 and 4320.Apparently, Putin reported some positive progress in the talks with Ukraine. He is a master of deception, so it is hard to gauge the truth.For all I know, his finance minister came to him and said, “Hey Vlad, do you feel like running a short-squeeze over in New York today?”And that reminded me of what I have been telling you all week. It is too late to initiate shorts here without copiously managing the trade. There are too many outstanding shorts at the moment, and the indicators show that rally risk considerably exceeds decline risk.With all the fear and negative news, you have to be betting on a nuclear event to cash in on shorts initiated from current levels. As I said a few days ago, if that is what you believe, you need to make sure you will still be around to collect.There will be more chances to bet on lower prices ahead. Let’s wait for some higher prices.My quant calculations can go out the window in a news-driven market like this morning, but I will give it a go on some ranges.My best judgment, and it is somewhat speculative, is that we will open at the 4300-4320 resistance area and pin in a tight trading range. As you can see from the chart below, 4300 stands out as an obstacle to higher prices at least through weekly expiration today. This chart of the S&P 500 Cash Index shows the 4300 Gamma-Strike Level as the most prominent on the chart. On the very optimistic side, I can calculate a gamma-adjusted volatility range of about 63 points up or down from the Open. If we open around 4300, that ranges between 4363 and 4237. But that is very optimistic.With the top of the Weekly, Expected Move up at 4453 – there is headroom for more gains today, but it would counter the falling wedge downtrend line on the daily chart, which might still be our best range guide at the moment.Last night (which is the most accurate picture), the options market was pricing a 52 point move from yesterday’s close at 4257.25. That would give us a range between 4205 and 4310.So a lot depends on where the market opens. But there is considerable resistance at 4300 and 4320. The market is likely to pin there for the rest of the day. This chart shows A.F. Thornton's Key Day Trading Levels at 9am EST on 3-11-2022. I will mark the options pricing range from yesterday’s close on the quartile shading. Remember that we will open at the top of the range I would have projected without the Putin Pop.The idea is that you want to take longs in the first quartile of the projected range, which is light green. Traders should take shorts in the top quartile or light red end of the spectrum.In this kind of volatility, it is best to avoid taking positions in the middle of the range.I will update the weekly outlook over the weekend.Next week is the big Fed meeting.The market is ready to rally, and it could start before the meeting, but I still believe that monthly expiration a week from today has the potential to hold the market back.Lately, the rally starts on the Tuesday after expiration. We will have a better idea as we approach monthly expiration next Friday.I would view most rallies at this stage to be “short-covering.” They will be subject to fast reversals.Clarity on monetary policy and geopolitics will drive sustainable gains, but I suspect the significant positions expiring next week are Fed hedges.I will adjust all levels and repost once I have the Opening price.While a lot of the Putin Pop has retraced, the market will open with a True Gap, so Gap Rules apply this morning.If the gap fills easily, it would be bearish, and sellers are likely to return on acceptance within range. If the gap is not filled at all or only filled partially, that can be a long signal for further short covering.Have a great weekend.A.F. Thornton
Founder's Trading Journal Afternoon Notes – 3/10/2022 Mar 10, 2022 AF Thornton 0 Comment This is a 15-minute Chart - S&P 500 Futures for 3-10-2022 with Key Levels. Good Afternoon:The inflation report came out today at 7.9% and within expectations. Still, it was the highest rate in 40 years. The number did not reflect recent commodity or wholesale inflation spikes. It will get worse.A 30+ VIX is supportive of daily SPX ranges between 1.50-3.00%. However, the indexes are relatively stable in comparison to underlying components which are actually very volatile.There was no follow-through to yesterday’s relief rally, so it appears that the market awaits the Fed meeting and announcement next week.The S&P 500 Index stayed within predicted ranges for the day.We were able to capture a nice trade for the day trading subscribers from the Weekly Expected Move low at 4200 and cashing it in near the close around 4262.The WEM low held its ground all week and likely guards further downside into the close and expiration tomorrow.Absent any other catalyst, the market is status quo, sandwiched between 4200 and 4300 for now.I will update the numbers in the morning.A.F. Thornton
Founder's Trading Journal Navigator™ Signals for Day Traders Interim Update Revisited – 3/10/2022 Mar 10, 2022 AF Thornton 0 Comment Subscribers just cashed in a 50 point S&P 500 Futures Trade basde on Interim Alert on this Chart Subscribers closed out a 50 point S&P 500 Futures Trade from the red circle a few minutes ago. I posted an alert when we made the trade here. We entered my green zone and then tagged the Weekly Expected Move low.Some other inside baseball was that I knew there were a lot of puts expiring tomorrow. Due to Vanna (time decay), the crowd needs to cash those chips in ASAP or roll them. Otherwise, profits go “poof.”The dealers have to buy the index futures when the crowd sells puts to accommodate them. That boosts the index.Nothing is foolproof, but it was a nice combo. And you saw it here from trade inception.Afternoon notes will be out in a few hours. I start at 2:30 am PST and I need a break…A.F. Thornton
Navigator™ Signals for Day Traders Interim Alert – 3/10/2022 Mar 10, 2022 AF Thornton 0 Comment S&P 500 Futures are wedging into the Weekly Expected Move Low at 4200. S&P 500 Futures appear to be wedging (falling wedge) into the Weekly Expected Move low at 4200. Watch for a pivot and potential long from the green zone.
Founder's Trading Journal Morning Notes – Key Trading Levels for 3-10-2022 Mar 10, 2022 AF Thornton 0 Comment These are A.F. Thornton Key Expected Move Levels for 3-10-2022. These are A.F. Thornton's Key Trading Levels for 3-10-2022
Founder's Trading Journal Morning Notes – 3/10/2022 Mar 10, 2022 AF Thornton 0 Comment Good Morning:Day 14 – where is Fauci?The U.S. economy is already teetering on fiscal and monetary cliffs.The risks are now compounded by the war in Eastern Europe and record-high (even understated) inflation.In February, the Consumer Price Index for All Urban Consumers rose 0.8 percent, seasonally adjusted, and 7.9 percent over the last 12 months. The number is in line with expectations but does not reflect the parabolic rise in food, energy, and industrial materials over the past few weeks.The Fed has only a few choices at next week’s meeting.The first choice is to keep monetary policy loose and risk an intractable rise of inflation and the complete loss of confidence and credibility of the central bank.The second choice is to tighten monetary policy enough to deflate the massive bubbles in bonds, real estate, and equities.Batten down the hatches as either choice will end in disaster for the stock market and the U.S. economy.The piper must be paid from the Fed counterfeiting trillions of dollars to distort and obliterate free markets.The song “Welcome to My Nightmare” keeps playing over and over in my head. This is a daily chart of the S&P 500 Index with our Navigator Algorithm system dashboard. The Gamma is coiled for a big move. Do I cover my shorts now, or wait until next week’s Fed meeting and options expiration? Things that make you go hmmm. Dealer’s choice?I cannot think of a comparable negative moment in my 35-year career other than 9/11.So, I am going to cash in my shorts now and hopefully, get to put them back on at higher prices before the Fed meeting next week.I am always reminded that Pigs get fat and hogs get slaughtered. This chart shows the Key Options Gamma Levels for the CPI Report on 3-10-2022 There is little change to key levels. Resistance remains at 4300 and 4320 (SPY 430 equivalent). Support comes in at 4146. Consider long positions with a target at 4400 should prices find acceptance above 4300.While I would still be very careful putting on shorts here, my first target would be 4170. With high implied volatility, it doesn’t take much to spark violent rallies. But I am still viewing rallies as “short covering” and subject to reversals until the S&P 500 index closes over 4300. A closing over 4300 could lead to a reduction in volatility, but below 4300 I look for price action to remain fluid. 4400 remains a brick wall, should we get there. I will consider more shorts at that level. I will publish other key levels after the Open. A.F. Thornton
Founder's Trading Journal Afternoon Notes – 3/9/2022 Mar 9, 2022 AF Thornton 0 Comment S&P 500 Index ETF - Daily Chart Good Afternoon:The Russia/Ukraine war rages on as the Biden Regime attempted to explain away the BioLabs that “didn’t exist” in Ukraine.The White House recently deleted archived videos of President Obama at the BioWeapons facilities in Ukraine that the White House tried to deny existed until Victoria Nuland spilled the beans yesterday.Meanwhile, President Clinton is resurrecting the Clinton Global Initiative. Either there must be a new grift operation ready to gear up with Ukraine aid from the U.S. Government, or Hillary must be preparing to throw her hat back in the ring for 2024. Maybe it’s both.Clinton Cash by Peter Schweizer nailed the previous Clinton pay-for-play schemes.“Ukraine crisis is bad, but ‘wait until you see’ flood of climate refugees,” Frozen Botox Face and Climate Czar John Kerry today as he stepped off his Lear Jet. The headlines write themselves.Anyway, attention will now briefly revert to the inflation numbers coming out tomorrow morning. The numbers won’t include the explosion in commodities prices over the past week, but the last wholesale numbers were 10%. Either that boosts consumer prices commensurately, or earnings will shrink. You cannot have it both ways.As predicted, the stock market produced a good relief rally ahead of the report. The market opened at 4249, the first resistance announced in today’s Morning Notes, then briefly rallied just under the second resistance at 4300 before crowning a bit into the close.Today, commodities (including wheat and oil) took a well-deserved hiatus on some profit-taking. It looked like the stock market action reflected some profit-taking and cautionary repositioning ahead of the CPI report.While I saw some encouraging behavior in the S&P 500 yesterday, today, there was considerable shorting again around 4300, and it far exceeded any call buying.I guess that on today’s gap higher, participants with a longer time horizon saw the move as an opportunity to sell/short at better prices; aggressive put buying and call selling persisted all day.The market remains stuck in a high volatility box between 4100 and 4300.No doubt, tomorrow’s report will be the catalyst to break the top of the range or retest the bottom.But even with another rally day, there is a brick wall at 4400 that is unlikely to break until we get clarity from the Fed, and we pass through monthly expiration after that.I would not be surprised to see the market pin around 4400 into monthly expiration.Given participants’ put-heavy, negative-delta positioning, counterparties are pressuring underlying products through their hedging activities.The market remains oversold and poised to deliver further gains if it can climb the wall of worry.The WEM low remains strong support at 4200, and the Put/Wall at 4000 would also take the wind out of further declines.My best judgment is that the market wants to go up the wedge before going down again. Tomorrow promises to be interesting!A.F. Thornton
Founder's Trading Journal Morning Notes – 3/9/2022 – Key Levels Update Mar 9, 2022 AF Thornton 0 Comment This is A.F. Thornton's Key Trading Levels 10am EST - 3-9-2022 adjusted for the Opening Price