Morning Notes – 4/11/2022

Good Morning:

• We are opening on last week’s low, a True Gap down triggering Gap Rules this morning.
• But it worsens as we are opening below the Volatility Trigger and the key conglomeration of levels around 4475 discussed in our recent writings. Slight negative gamma will lead to a downward bias.
• We will take out the 5-month EMA, 21-Week EMA, 5, 21, and 200-day lines at the Open. See “Current Stock Market Thesis” and “Navigator Oracle April Market Letter.”
• That is, in a word, “negative” to start the second week of April, normally the best month of the year,
• There is hope, however, as the 50-day line sits around 4420. Also, the WEM low sits around 4400. Maybe those levels will catch the falling knife.
• So let’s peg resistance at 4500 and 4520. I will call support at 4465, then 4450, then 4420, and ultimately the WEM low at 4400.
• The WEM range for the week is 4400 to 4568. Today’s range should be at least plus or minus 38 points from the Open, and I could be light on that estimate as volatility looks higher on the SPY.
• If we break the 4/6 low at 4444, then it is almost certain we will complete a measured move down to 4400. It is, indeed, early to hit that level on a Monday, but recall that this is a shortened 4-day week, with little to no trading on Good Friday.
• No predictions – anything is possible – but I am setting my Sandbox and quartiles from 4400 to 4500 today.
• Remember, we are still in sell signals on the Navigator Swing Trader. Swing Traders should be short or in cash. We have not issued any trades for now.

A.F. Thornton