Morning Notes -7/19/2022

Good Morning:

• It is best to refer to yesterday’s discussion for key levels and targets, as not much has changed.
• Everything seemed fine as the market traveled north to grandmother’s house yesterday, but then…
• They closed the gates at the brick wall – 3805-3830. And so it remains the obstacle to conquer.
• How do they coordinate this? I often wonder. As the market hit 3905, Apple came out with their earnings warning {along with Russia announcing their  “Force Majure” contract termination cutting Germany off from future energy).
• It is like they were waiting to block and tackle yesterday.
• And on the other side, the Fed’s plunge protection team seemingly picked up the rear guard.
• It was almost as if the spin backward was as well-timed as a ballet and so was the rescue.
• And the triangle now formed on the daily chart is normally a “2” or a “4” continuation wave pattern – rarely a bottoming formation – but the news anomolies make the pattern somewhat contrived.
• And the pattern forces us to consider the possibility of one last down thrust before this particular “leg” of the bear completes. We believed that the down leg completed at the June 17th low.
• But a retest assumes the “powers that be” affirmatively derailed yesterday’s rally attempt. It might only have been briefly interrupted by the news, and could resume its course today.
• And the truth is nobody knows for sure, but a retest of the June 17th 3639 low is at least on the table, and that has not been my preferred view up through yesterday..
• And if you project a “measured move” from the 3850 triangle apex (about 180 points), you can forecast a move to 3670 – slightly higher than the June low.
• But if the rally resumes – you can also project north to 4030 – up and through the air pocket discussed yesterday.
• Meanwhile, Gap Rules are in order this morning – so apply them, and we will see how it goes.
• As per this morning’s live show, We will be in the Trading Room about 30-minutes after the Open.

AF. Thornton