Morning Notes – 6/14/2022

Good Morning:

• I am fortunate to have a great business partner that helps keep my feet on the ground. I think of him as my business wife. I am lucky to have a real wife that does the same thing.
• My business partner and I discussed some of my macro concerns yesterday, and he said, “don’t put that in the Notes; you will sound crazy.” I promised I wouldn’t, as I had similar concerns.
• But then we had to remind ourselves that when we first discussed the Davos crowd, their “Great Reset,” and their video, “You Will Own Nothing and be Happy,” we thought that was crazy too. It was hard to swallow. That was two years ago.
• We discussed then that this group of prominent government and corporate leaders at the World Economic Forum wanted to crash the economy, take control of the food and water, and eventually price us out of single-family homes and energy as part of their Climate Agenda. This Davos crowd also wanted to push us to get chipped and convert to digital government currencies to firmly establish their social credit system and surveillance state.
• Of course, my partner told me, “no way that will happen here – this is America! I saw his point, and I wanted to believe him. I needed reassurance. But I knew what I knew. 
• I read voraciously, and I have well-placed global contacts. Most importantly, I know how to connect the dots.
• Neverthless, my business partner and I are still shocked by what has transpired, even though we saw it coming. It is like a bad dream.
• Did you know that Bill Gates now owns 80% of farmland in our country? What is the current price of a single-family home? What is the interest rate on a new mortgage? How much is gasoline per gallon now? 
• By the way, how is Bitcoin working out as the new Gold? Isn’t it proof that you can sell ice to Eskimos? I think I will stick with the old Gold. In the end, Central Banks will steal Bitcoin and blockchain technologies for their purposes, just as they suppress the price of Gold so as not to interfere with their worthless paper currencies.
• Then we ask ourselves, with the Great Reset well underway and the “new” economy coming, should we be accumulating Gold Coins or bullets? I wonder which one will have the most value for bartering in the coming collapse? You know what they say, “diversify!”
• No, I am not watching too much “Infowars” and Alex Jones. Though I must say, Jones now looks like a seer. And you know we are in trouble when Alex Jones has become an excellent mainstream news source.
• Anyway, how is everyone enjoying the “Great Reset?” How about the “Fourth Turning?” I am sorry that everything I had predicted and worse has come true. And it will get worse before it gets better if it can ever get better. The rest of this decade will be difficult – so prepare yourself.
• Meanwhile, back at the ranch, yesterday was brutal for the indexes, though expected. The overnight futures market has not taken us to new lows, which is at least slightly encouraging. Of course, it is possible nobody is showing up until New York opens.
• On the charts, the overnight S&P 500 futures traded in the middle of yesterday’s price action below the gap, having no success at even tagging either end of yesterday’s range. And it would not surprise me to see the market move into rotation as it awaits the Fed decision tomorrow at 2 pm EST.
• So the overnight range is a suitable bull/bear breakout threshold today. As upside resistance, the top of the overnight range is at 3807, then the Gap from yesterday begins at 3820.
• On the downside, support lies at the bottom of the overnight range at 3750, with additional support at yesterday’s low, around 3735.
• Interest Rates are climbing fast. In less than 24 hours, the consensus has gone from 24% to 95% of economists expecting a 75 bps hike tomorrow. Partly, this is due to the Fed’s favorite leaker at the Wall Street Journal floating the trial balloon.
• Some rumors even circulated yesterday that the Fed would go to 1%. In the meantime, mortgage rates climbed to 6.1% yesterday, double the level from January. Consumer Confidence hit the lowest level ever recorded last Friday. 
• Yet, Uncle Joe is mystified by his low approval ratings, the lowest recorded for any President at this point in his term.
• As we wander the next few sessions, don’t forget that the street is incredibly short here, so we are looking for the short-squeeze coming from tomorrow’s rate announcement. 
• But we could easily see panic and a spike low before the squeeze kicks into gear. But the shorts will not panic buy and cover when they are still making money, as they did yesterday.
• I would put “panic” spike-low support at 3250, near the 50% retracement of the entire Covid rally from March 2020. That was where the market broke to new highs from the 2018 to 2020 expanding triangle and consolidation. It is also where the most volume congregates since the March 2020 lows – the so-called high volume node as identified in the chart yesterday.
• I fully expect we will flirt with 3250 and eventually 2500 before this bear ends, but it does not necessarily need to happen now. It is simply the case that 3250 has a good chance of catching the S&P 500 in a panic.
•  I hope I am not being too conservative in the estimate because the next macro high volume node is at 2700, with the largest node over the past few years at 2100.

Would someone tell me how George Orwell saw this coming so many years ago? Is this all life imitating art? Or is George Orwell’s “1984” where the Davos crowd and World Economic Forum got their ideas in the first place?

A.F. Thornton