Interim Update -10/13/2022

Good Evening:

• Don’t you hate someone who said I told you so? It was not my most probable guess for today – but apparently, it was what the doctor ordered.
• Not that I made as much money as I could have. There turned out to be more profits left in the puts we cashed in yesterday, but only if we were quick to the draw this morning. 
• And I could have entered lower on the long side even for some day trades today. I had a good pre-market trade, but that was it today. In a sense, I am haunted by not wanting to give back our incredible year-to-date gains in a wrong-headed move. I need to get over that.
• Besides, the Navigator Swing Buy signal was the focus of the day, and the spike low. We had been close the last few days, and it finally kicked into high gear at 3601.
• Then the waiting game began. We had to see if traders would accept prices above 3600. A reversal before the close could have erased the buy arrow. I have seen that happen more than once.
• So we set the parameter as a buy as long as the market closed above 3651, and it did.
• There were any number of ways to enter with a stop, etc. But we will use the close at 3681.75 as our official entry.
• We will buy pullbacks to the 5-day line until another sell signal presents. For now, the Founder’s Group has their stop set at 3645.50 in case we need to give the price some breathing room tomorrow. Be advised that we will change that on a dime if need be.
• Closes below the five-day line are a good stop proxy if you have no other strategy.
• We move our stop around, preferably up throughout the day, but you need a subscription for that information. For now, at least you have a general idea of what we are doing.
• If you have been following the Blog, there should be no surprises about this low, and there is no point in rehashing why we had been looking for it.
• Could it be THE low? Ollie Ollie in Come Free?
• Sure, it could be, but I seriously doubt it. Think of it more as taking a break at camp as we continue to repel down the mountain.
• And what about that retest? Or was this a retest? I will better assess that over the weekend. A good follow-through day would make the analysis moot.
• And anyway, the Navigator Algorithm knows, and it will tell us what to do next. We will keep it tight – using 60-minute RTH and 120-minute ETH charts rather than the daily chart to monitor the signals.
• Next stop? Break the downtrend line (happening in Globex already), then revisit the mean at 3740. Solid support lies at 3651, and we start running into resistance at 3770, assuming we can clear the mean at 3740.
• Regression to the mean is all about this: the “rubber band” principle. We just snapped back after getting too far below the mean on the daily chart.
• If you did nothing but run a 21-period line in just about any time frame and study it, you would find this an easier process than you might otherwise believe.
• That is how I start my weekend reviews. A plain candlestick daily and weekly chart with the 21-period line only – nothing else.
• Of course, I also want to know if a new moon is due and how Mars aligns with Mercury and Venus.
• Just kidding – I wanted to see if you were still paying attention.

Have a great weekend – the next Blog will come on Sunday evening or Monday morning for non-subscribers.

A.F. Thornton

P.S. Why would the market rally here other than short-covering? The reasons always become apparent in time.  Anyway, it is much too early to draw any conclusions and the bond market still looks like a Mac truck (electric of course) ran into it. Remember – “it’s the bond market, stupid” and electric vehicles have a lot of torque.