Looking at the intermediate trend, the broad market (as measured by the S&P 500 Index) is still trying to find its footing at a double bottom around 4300. There are definitely buyers between 4250 and 4300, as we have seen for two sessions and overnight. But the trend remains down, and the Navigator Algorithms remain in cash, eluding several very close, potential buy signals. We continue to operate on the assumption that the market is in the process of establishing a trading range for the next several months.
For day traders, keep the intermediate trend in mind. While the S&P 500 held its recent lows yesterday, tech and the NASDAQ 100 put in new lows. Part of the decline was due to Facebook’s precipitous decline in the wake of what appears to be a CIA-type psyops game run against them. I am reminded about what China did to Jack Ma and Alibaba.
Our intelligence apparatus is likely trying to show Zuck who is really in charge. A whistleblower (attempting to enhance the left’s desired dissent censoring programs) combined with a mysterious global outage for all of Zuck’s apps is hardly coincidental. In the apparent leftist coup attempt underway in our country, Facebook needs to snap to it or face the consequences.
Zuck will learn that it is treacherous to deal with the devil. Just because you help the leftists take over does not mean they won’t eat you when your usefulness wains.
For day trading today, continue to focus on the swing low around 4260 as both the gateway to lower prices and a short-covering trigger. If sellers cannot move the market sustainably below 4260, the shorts will have to cover, and that may be all that traders will need to begin moving the markets back up the down channel for now. If we take out the overnight high at 4314.75 with some follow-through, the market can begin to repair yesterday’s single prints, and I become more bullish.
The situation between China and Taiwan bears monitoring. It remains both a wildcard and a hotspot. Your downside needs to be guarded and measurable if you are long. So many of our computer chips come from Taiwan that any conflict will devastate the financial markets.
The Navigator Algorithms remain in their cash position established on October 10th, and that remains our official swing trading position. I will, however, admit to personally nibbling in some of the downswings, but I don’t have much green to show for it quite yet.
A.F. Thornton