Morning Notes – 8/8/2022

Good Morning:

• Not much has changed from last week’s commentary, as the market has consolidated for the past seven sessions.
• The WEM for this week is 4060-4235, and the DEM is 4110-4185.
• Short-term resistance above is 4180, then 4200, and then 4235. Support is at 4150, then 4135, and then 4120.
• The consolidation appears to be forming a rising wedge pattern, typically leading to a price reversal.
• Bolstered by several momentum divergences and exhaustion warnings, I would expect this latest run to be out of batteries very soon.
• We will learn a lot more about the sustainability of the intermediate bear market when the price sets down again.
• We are neutral going into today’s session and look forward to the next inflation report Wednesday when the CPI comes out for July.
• Meanwhile, global risks continue to increase as conflicts boil between the US, Russia, China, and Iran.
• The Democrats passed their latest graft and corruption legislation in the Senate over the weekend. 
• Among the provisions is doubling the size of the IRS. 
• No doubt the left will weaponize this agency against its political opponents just as Obama did. 
• The agency will become the largest in the US Government. Funny, I thought we had a border crisis.
• Combined with all the money going to Ukraine (with only 35% of the weapons getting there), the Democrats and radical left have done everything except helping the poor, middle-class, and other Americans they are supposed to represent.
• This country is imploding from within and on the verge of World War III, so batten down the hatches while you still can. I do not think this is reversible.
• If you are long, use a couple of hourly closes below the 5-day EMA as your stop line.
• Watch for a True Gap Open and apply Gap Rules if it manifests.

A.F. Thornton