Founder's Afternoon Notes | Archimedes Methodologies

I highlighted the important levels we set up in the Morning Notes in yellow. The market sold off all day until it pivoted from the lower boundary line late in the day.
There was buying into the last 15 minutes like yesterday, that is a net positive.
Note that price almost tagged the WEM low, and the dealers defended it.
My inner thoughts are focused around whether I am looking for a normal swing low or a crash. If it is the former, all the boxes are checked. If it is the latter, there is more to go.
As I look at the CNN Fear/Greed index, fear achieved 19 today, a level associated with the usual correction troughs. Yet it went even lower – down to 5 – in the March 2020 Covid-19 crash.

The analysis is similar in the VIX volatility index, sometimes called the “fear” index.
It is high enough for normal correction lows, but is not close to the March 2020 Covid-19 crash levels.

There is no easy way to resolve what kind of low we need to squeeze the shorts again. Maybe we will scale in for some longer swing trades. The volatile price action today flat stopped us out of yesterday’s swing trade.
We hear from Fed Chairman Powell tomorrow. I guess that he will say that the Fed will hike at least a quarter-point, and the rest will be data-driven. We won’t find out until mid-March. But it hangs over the market.
1st quarter GDP estimates are being cut all over Wall Street, and the consensus is now close to zero. Consumers have clammed up in the circumstances.
Anything and everything can still go wrong with the Russia-Ukraine situation.
So do we take signals here? Do we wait for a crash? Fear indicators exceeding current levels almost require a crash to drive them higher.
We are dealing with an unprecedented, global red line that Putin crossed. Likely, it will be Putin or the rest of us – and it might take a long time to find out who prevails.
So my dilemma is simple. Do I wait for a crash? Do I start scaling in for another short squeeze? You see the problem. It helps to share it.

Did I forget to say that I am not fond of Fourth Turnings? Tomorrow’s levels will come out in the Morning Notes.

A.F. Thornton

Founder’s Afternoon Notes