AF Thornton | Archimedes Methodologies

Interim Update – 4/1/2022

Apr 1, 2022 AF Thornton 0 Comment

S&P 500 Continuous Futures RTH Data – Wedging onto Morning Reversal in the Green Zone?

On the bearish side today and per Spike Rules, we now have acceptance below yesterday’s spike low into the close. And the Index is trading below the 5-Day EMA (Red Line), and the Navigator Sell Trigger (Purple Line). Also, we are trading below last week’s high which would leave a spike reversal on the weekly chart if the market closes below 4539. And we are trading below the 4525 Volatility Trigger.

On a positive note, there is a falling wedge into the green zone Daily Expected Move low just above 4600. So a price reversal is imminent, and we will see how far up it carries us.

Intraday action can look bad at lunch and then completely reverse by the close. So it is the close that counts, and we will see where that takes us. Since price has been inside the falling wedge all morning, at best there have been some scalp trades but nothing traders could ride very long.

I am not trading today, but I will pass along these few thoughts.

Have a great weekend!

A.F. Thornton

Founder's Trading Journal

Morning Notes – 4/1/2022

Apr 1, 2022 AF Thornton 0 Comment

Good Morning:

Only a catastrophic March jobs report coupled with even more negative data could shake the Fed’s determination to pursue a 50bps rate hike in May.
We got a modest miss, so we expect a 50bps hike next month.
The Fed will focus on wages, up 5.6% over the past year. With real inflation running around 15%, this should keep the rest of us down and out where our esteemed ruling class likes us.
And that left March’s monthly candle looking like the market explored only slightly above February’s candle before being rejected. It was a bull bar nonetheless, but suggestive of a potential trading range forming.
Also, keep in mind that 4539 is last week’s RTH high. If we close below that level today, we will have a spike reversal candle on the weekly chart.

And while I am the first to caution about gleaning too much from the last day of a calendar quarter or month, the S&P 500 failed on a reconnect with the 5-day EMA, closing slightly below it and triggering a formal sell signal on the Navigator Algorithm.
Let’s see how it goes this morning, but the fat, squatty, 45-degree angle overnight profile would suggest that traders won’t easily conquer 4550 or so if we travel north.
Volatility-wise, we are still looking at a small range today of plus or minus 28 points from the open. Support is at 4525, then 4500, with resistance at 4550 and 4600.
The 5-day EMA is inside the range and remains at a critical resistance level. It is about 4545 before the Open. But put it on your charts, as the EMA is dynamic, and we cannot quote an exact level. It changes with the price action.
I hope you noticed that the expected ranges I quote for the day and week hold up exceptionally well. But yesterday, they competed with my other prediction.
Some 60/40 funds were rebalanced in the last hour, causing a significant drop in equities and a big bond jump. Rebalancing explains the two red stock market candles on the final two days of March. We expected as much.
But that also leaves Spike Rules in play this morning.
Depending on the context, I mark the range in quartiles from green to red and initiate long trades in the first and short trades in the top quartile.
While the expected range today would see the market closing above 4500. The next downside target would be the 21-EMA at 4460.
President Biden decided to release half of our strategic oil reserves at 1 million barrels per day through May.
Of course, he is trying to bring down prices at the pump as the only thing lower than his poll numbers is the shale deposits he adamantly opposes.
The release, like so many things he does, is unwise. We are not in any kind of genuine emergency, other than Congressional midterms coming up where the Dems appear to be on course to being wiped out – absent more cheating.
You will recall that President Trump filled the reserves to overflowing when the price of oil fell below zero in May 2020. It does not get much better than that.
I will have a lot more to say about our global position in the monthly letter.
Here is a teaser, were you ever on a losing team growing up? When I realize that 146 countries have signed on to the Belt and Road Initiative with China, I feel like I am on the losing team.
From the pure number of Countries lining up with China, it is starting to get lonely as the U.S., Canada, and a few countries left in Europe. Here is a good link with some in-depth discussions. With Russia now on board with China, you will see a new monetary system, and we will not be part of it.
April historically is the best month in the stock market. So let’s get to it and try to have some fun in this otherwise glum environment.
I just posted all subscriber charts.

A.F Thornton

P.S. Have you read about China’s Belt and Road Initiative? Am I out on a limb here, or is China’s global influence and reach getting scary. How do you feel about Chinese missiles in Cuba or South America? Email me and tell me what you think.

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Morning Notes – 3/31/2022

Mar 31, 2022 AF Thornton 0 Comment

Good Morning:

BluPrint is ending another positive quarter, as we are now in our third year of triple-digit gains, leaving the benchmark S&P 500 in the dust.
I won’t forget this quarter, though, as I sat out January with the dreaded China Virus and missed one of the best shorting opportunities in a long time. And the last month of website construction and improvements has been enough to put me in the insane asylum.
Nevertheless, gains for the quarter have been exceptional both for day and swing traders. And I am thankful we came into the year 100% in cash.
I will publish the latest numbers in the upcoming Navigator Oracle™ Monthly Market Letter.
The key to our success is, and always will be, executing trades and maintaining positions based on objective, market-generated information using the Navigator Algorithms™ as our base. Opinion matters little in our world, except as filler while awaiting our next signal.
I am surprised we have done so well, considering current market challenges. The first quarter involved a lot of news-driven swings. Even an algorithm can be tossed around by news.
And for all the fretting about coming tightening and reduction in liquidity, there has been nothing save for a minuscule 25 basis point Fed hike. The balance sheet continues its upward trajectory.
You can produce record earnings despite economic shutdowns and restrictions when you hand out free money in the trillions. Is it sustainable? Not without more free money. This party is coming to an end, although buybacks as a form of liquidity will help maintain a bid under the market for now.
Historically, April is the strongest month of the year. If it isn’t this year, it may simply be the news of the day countering expected seasonal trends in this unusual time.
The crowd believes that rates are headed higher, but the charts say otherwise. Rates appear to be peaking in the short term. Bonds are short-term oversold.
It is hard to argue with the strong price action in the stock market except to suggest that it is short-term overbought.
As expected yesterday, the S&P 500 danced around the 4600 call wall, hitting our marks perfectly up and down. The call wall did move about 50 points higher to 4650. Still, the market is a bit overheated, and direction is difficult to discern until the quarter officially ends today and we get past the weekly expiration tomorrow.
I expect more of the same today as yesterday – a dance around 4600 until expiration tomorrow afternoon.
Look for resistance at 4612. then the WEM high at 4625. We could temporarily overshoot the WEM high up to the 4650 Call Wall but expect the WEM high to act as a magnet should that happen. Support should continue to come in at 4575 and then 4550.
The expected move for today is about the same as yesterday, plus or minus 29 points from the open.
Key A.M. Trade Levels and Charts have been posted for subscribers.

Now that you know my views, what do you think? Email your thoughts to me directly.

A.F. Thornton

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Morning Notes – 3/30/2022

Mar 30, 2022 AF Thornton 0 Comment

Good Morning:

It has been a couple of frustrating days dealing with our website and trying to improve speed and security. You should see a noticeable speed improvement. Security issues occur behind the scenes – but with the international cyber threats from unfriendly actors, we can never be too careful.
The number of Chinese and North Korean bots constantly trying different ways to hack into websites is astonishing.
Interestingly, there has been a noticeable reduction in Russian attempts since the sanctions took a number of them off the Web. Maybe we should keep them off permanently.
And then – have you tried to get help with anything online these days? I recall complaining about all the automated phone systems when they became prevalent. Remember voice mail jail?
Now, you don’t even get a voicemail jail – you have to email – and wait, wait, and wait.
When working on a website, or any technical programming, you are often stuck until the issue is resolved.
This is a huge step backward from the old days in my view.
Meanwhile, while I was tinkering with the site, the market sailed 50 points past my original target of the February 2nd highs around 4475.
As I indicated, anything above 4600 is overbought in my work.
I have counseled everyone that you will see orderly climbs in bull markets as the market zig-zags higher, but corrections are sharp and steep.
In a bear, it is the opposite. So if we are in a bear, the sharp, steep rise we just experienced is typical. Perhaps it is more typical in the early bear stages because traders are ingrained in buying every dip.
I can track the short-covering panic in the options market in droves.
But it likely takes a behavioral psychologist to unpack the FOMO (Fear of Missing Out) buying that must be happening as we approach the quarter-end tomorrow.
April typically records the strongest gains of the year, which makes the current situation even more interesting.
Technically, there was little justification not to grab final profits on our longs last Friday. A pullback will come, and we can decide when and where to re-add. This is just not a place where I want to trade long.
Shorts, nonetheless, are tempting on a true pivot lower or sell signal.
It remains to be seen if the negotiations between Russia and Ukraine will truly lead to a “peace dividend.”
There should be some rebalancing into bonds today and tomorrow by the big balanced mutual funds, which could give us a pullback.
The bottom line is that stocks appear to be disconnected from fundamentals. Or, the fundamentals are better than we think. That is why the price action is more important than our opinion. The price action has been strong. and there is some confirmation in call buying and risk on behavior – now that we are a few sessions out from all the short-covering.
The volatility index (VIX) has been absolutely crushed in the rally of the past few weeks. As a result, the daily expected move in the S&P 500has dropped to between plus and minus 27 points with volatility this muted.
Pinning behavior should continue around the 4600 Call Wall with resistance at the 4625 WEM high, then minor support at 4575, and more significant support at 4550.
Above 4600 should still be considered overbought and likely leads to mean reversion until additional call buying moves the Call Wall higher.
I don’t day trade into a month or quarter-end. There are too many cross currents. Many had shorted this rally into last Friday, and I get why they would do so.
Then, the market just ripped higher Monday and Tuesday. This is typical of what happens around quarter and month-end. You can get your head handed to you as a small trader. Been there and done that, so I swore off the need to trade into these periods.
Remember the famous Kenny Rogers line – “you have to know when to hold them and fold them.”
We tagged the WEM High at 4625 yesterday, another reason to avoid longs here.
Given the structure and failure of the overnight session to make new highs, there is potential for sellers to get active below the overnight low at 4602. This could also lead to a break of the tight rising wedge pattern on the daily chart.
If it breaks, monitor for continuation and note the support below as set forth above.
Context is important as anything on the downside runs completely counter to the current narrative, which is to buy.
All subscriber charts are posted.

Now that you know my views, what do you think? Send me your thoughts to my private email.

A.F. Thornton

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Morning Notes – 3/29/2022

Mar 29, 2022 AF Thornton 0 Comment

Good Morning:

The rally continued overnight, pushing the 4600 level, about 25 points above our original projections from last week.
Anything above 4575 is a bonus, given our original projections.
The 4600 level also marks the area where call trading may influence the movement of the S&P 500 again.
For this rally to continue, we want to see the Call Wall (now at 4600) roll up to higher strikes, which would indicate that calls are filling in at strikes overhead.
On the downside, due to the large gamma strikes now below, it would take a few days of selling to hit 4500.
Below 4500, the air pocket remains, but the risk of breaking into that zone over the next few sessions seems materially reduced due to lower forecast daily ranges of plus or minus 30 points.
Again, this rally reflects the crazy behavior we often see around the quarter-end. The stock market seems divorced from reality and interest rates.
For money managers, what the quarter-end holdings look like on their customer statements and quarterly S.E.C. filings sometimes takes precedence over common sense. Managing money can be a very short-term oriented endeavor at times.
The rally may also reflect anticipation of a peace deal in Ukraine. Even if a deal materializes, the stock market will have to step back and refocus on inflation, Fed Policy, and interest rate concerns.
Key A.M. Trade Levels and Charts are up. I am marking 4600 and then 4610 as resistance and 4550 then 4520 as support.
The market’s behavior reminds me of the final blow-off rally right before the 2000 dot-com bubble top.
However, keep in mind that stocks have historically performed better than one might expect in the initial stages of inflation. Also, while I get that the yield curve may be inverting, the recession that follows doesn’t usually get underway until after the inversion has come and reversed.
In other words, there usually is quite a bit of delay between these “leading” indicators and any recession that ultimately follows. We see the same phenomena with Consumer Confidence as pointed out yesterday.
Again, we are on the sidelines until the picture is clearer. I view the short-term price action above 4600 as overbought.

A.F. Thornton

Founder's Trading Journal

Afternoon Notes – 3/28/2022

Mar 28, 2022 AF Thornton 0 Comment

Good Evening:

I have been wrestling with the website since the market closed. It can be like looking for a needle in a haystack when a problem arises.
I will save forward commentary for the morning.
I got so frustrated dealing with the website problems, I am almost tempted to take the next few days off until the calendar quarter ends.
Today, the S&P 500 ended just short of my 4575 target set last week. The market got a news boost when there were some positive developments in the Ukraine peace talks.
If you followed the morning numbers, there were a few nice trades.
An opening drive was rejected at 4552. Then, the index traded sideways while put sellers came out in force and crushed the VIX.
On the heels of a second attempt at 4552, alongside Russia-Ukraine peace talks news, the index exploded higher. Call buying in the Nasdaq 100, alongside continued put selling in the S&P 500 bolstered the price rise.
The S&P 500 ended just below the 4575 upper bound I highlighted in the morning commentary.
I still believe it to be risky to trade in these last few days of the quarter. I have had my fingers burned more than once over the years.
Subscribers get the chart above with the zones already filled out each morning. All you need to do is follow the price into the green zone, buy, and then sell in the red zone.

A.F. Thornton

Founder's Trading Journal

Morning Notes – 3/28/2022

Mar 28, 2022 AF Thornton 0 Comment

Good Morning:

My view remains that the S&P 500 futures are on the way to testing the February highs at 4575, with resistance at 4552, which is the important 62% retracement of the recent decline.
If there are several closes above the February highs, the market is likely to test the all-time high from January. That could establish the top of a new trading range or lead to new all-time highs.
Meanwhile, Junk Bonds may be rolling over. Junk prices typically lead the stock market.
Last week’s Consumer Confidence meltdown figures virtually ensure that a recession looms. Similar declines in the past always led to recessions. But it will be a while before it actually arrives – perhaps months from now.
Also, interest rates are testing their long-term downtrend lines this week. A break of the 40-year trend could be negative for stocks.
Day trading for the next few sessions may not be advisable unless you are trading a particular strategy. The end of the month and calendar quarter is Thursday.
Institutions will be reshuffling and rebalancing large funds, creating unexpected cross-currents that may distort usual market indicators.
The balanced overnight activity also led to some price exploration of new swing highs.
The overnight low stopped just a little past halfback, which tells us that buyers are still in control and that the low might be weak.
Today’s volatility forecast anticipates another tight trading range (0.69% up or down from the open). If you are going to day trade today, support is at 4510 and 4500. Resistance is at 4552 and 4575.
I posted Charts and Key Levels for subscribers. The Weekly/Monthly Navigator will be combined and available later this week.

A.F. Thornton

Founder's Trading Journal

Afternoon Notes – 3/25/2022

Mar 25, 2022 AF Thornton 0 Comment

I want to keep it short tonight, as I have to write the weekly letter tomorrow with more detail.
We had a good day and some more nice profits. But we are back to 100% cash for the weekend.
We are approaching a critical inflection point, especially with bonds. If bonds break their long-term downtrend, they would eventually take down the stock market.
There are some nuances in the options market that brought us this rally, similar to how the options market contributed to the January rally. But if we run out of fuel here, there is nothing to catch us below as the hedge wall expired on March 15th.
I like to stick with the S&P 500 for trading but will dabble in the QQQ and other sector funds from time to time.
I wanted to take profits on our latest positions at the expected move highs today, as mentioned this morning.
I did so early in the day, as you can see below:

You do not want to miss this weekend’s update to the Navigator Oracle™. The issue promises to be one of our most important market discussions in many years.
Suffice it to say, things are not ok, and it will take many years to pull ourselves out of the mess our corrupt elites have delivered to us.
The implications for stocks, bonds, and commodities have never been more profound.

Until then,

A.F. Thornton

Founder's Trading Journal

Morning Notes – 3/25/2022

Mar 25, 2022 AF Thornton 0 Comment

Good Morning:

Big tech may no longer be the cat’s meow as it competes with “food” and “gas” as the most profitable future investments. Maybe corn isn’t the sexiest investment, but the price of corn and wheat will astound all of us in six months.
Volatility continues to contract as the Vix futures curve normalizes and risk appetite grows again. We were able to take some call positions yesterday without fear of a volatility crush.
Resistance at 4500 should now be solid support. The daily expected move comes in around 30 points or so above and below the open. Resistance should come in around 4535-4540, also the Weekly Expected Move high.
After the first resistance, we have another slight speed bump at 4562. and then it is on to the February 2nd highs at 4580. I can’t see much farther than 4580 at the moment, nor do I expect gains much beyond the WEM today.
I am inclined to take profits at the WEM highs on both the QQQ and SPY positions (about 4530-4540 on the S&P 500 index). At the very least, we may take leveraged SPY and QQQ calls back to cash ETF positions.
I will enjoy my weekend better not worrying about some geopolitical event. Let’s see how it goes.
I won’t be trading today but will monitor while sipping Pina Coladas on the beach. Limit one before the market closes…
Other than high gas prices, looming food shortages, rising interest rates, and the threat of nuclear World War III, try to relax and enjoy your weekend.
I will cover all the issues still on the table and more in the Navigator Oracle Weekly Letter™ coming out for subscribers on Sunday. and available to the public on Monday.
Morning charts are up for Navigator Day Traders™.

A.F. Thornton

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Afternoon Notes – 3/24/2022

Mar 24, 2022 AF Thornton 0 Comment

Good Afternoon:

The Federalist’s Sean Davis aptly summarizes where things stand today:

“We’re about to face massive energy and food shortages, and Biden’s solution is to ban drilling and put expensive and inefficient solar panels and windmills on what’s left of American farmland that hasn’t been bought up by China, Bill Gates or BlackRock,” he wrote on Twitter.

Add housing to the list, as BlackRock is buying that up too. Remember the Great Reset promotional video – “you will own nothing and be happy.” They didn’t tell us that BlackRock would own everything instead. I am not happy.
And then BlackRock’s CEO Larry Fink told shareholders in a letter today, “the Russian invasion of Ukraine has put an end to the globalization we have experienced over the last three decades,” Daaaaa! “A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption.”
Should we laugh or cry? First, they are coming for our money and will be tracking EVERYTHING. Bitcoin, is this your moment? Oh, and welcome to the Surveillance State.
But the good news about globalization is that the interdependence between and among countries probably led to fewer conflicts and wars. I would not be isolating Russia after 20 years of American culture becoming part of their land. The move is a huge step backward. Sanctions have never worked anyway.
As Bob Gates deftly observed, Biden has been on the wrong side of every foreign policy issue in the last 40-years. No point in breaking such a great record now.
As one example, Mcdonald’s is closing 850 stores in Russia. The average lifespan of a Russian has now increased by seven years. Just kidding, but isolating Russia or any country is not the best solution. But who would expect the wokesters to be smart?
Now that all of the important nations are isolated from each other, could we close our Southern Border, please?
Is this really a good time to reinvigorate Iran with another bad nuke deal? Oh, sorry, that is another part of the population control agenda. My bad.
Also, none of us want that globalist, commie “Great Reset” either. We want our jobs back too. We want our Country back. If we have to experience inflation, could we do so benefitting our own country with jobs? I am tired of sacrificing for the wokesters and their grand, corrupt, boondoggles.
Ironically, we are getting a New World Order, but not the one Davos wanted. This world order will be divisible by at least three global regions.
The Great Reset crowd and their woke nonsense led to Russia invading Ukraine in the first place. I would not want George Soros and the Davos wack-jobs living or working next door to me either – especially with Biolabs.
A recent survey of 100 Russians found that they all knew the definition of a “woman,” unlike Supreme Court Nominee Ketjani Brown Jackson.
The same 100 Russians had absolutely no doubt about what should happen to purveyors or producers of child porn either.
President Putin would prefer Russia stay “woke” in those ways. President Xi likes the same plan for China.
Please make no mistake, considerable animosity toward Russia and China emanates from the Davos snowflakes who see both countries as significant obstacles to their Great Reset, utopian, collectivist dream.
In the Great Reset utopia – you slave – they master. No wonder they are so excited.
Part of the Great Reset is population control. The Russian conflict grants the World Economic Forum Davos a two-for-one. If we have a nuclear war, Russia is no longer an obstacle and it helps with population control.
If we wipe out China and Russia, even though only three or four of us might be left alive, the wokesters hope we can join the woke cause with no opposition.
Anyway, I am still thinking of identifying as a minority woman to get an SBA loan. Be prepared, I am one ugly girl!
Today, the market stayed inside our sandbox, closing just slightly above our second resistance at 4510.
4500 is still the most significant strike on the options chart – so it is a magnet of sorts through April expiration (but with a sizable JP Morgan position expiring on March 31st).
The market tried to hold the 200-day line and the Weekly Mean on today’s lows. So it was a struggle for the first few hours. But the market held the line for the second time and regained most of what it lost yesterday.
Swing traders took positions today on the pass back up and through S&P 500 (SPY) at 447. I am still targeting the February 2nd highs near 458 (370 on the QQQ), but the WEM high sits at 454 and may stunt our growth before tomorrow’s weekly expiration.
Leveraged accounts used April monthly SPY and QQQ at the money calls. Non-leveraged accounts used the SPY and QQQ ETFs at 45% each.
Again, we will be managing these positions tightly as the market continues to climb the wall of worry or at least until we have some adults running the country again.

A.F. Thornton

Word of mouth is crucial for growing our trading community and providing education and support for your trading decisions. Please feel free to share this with your friends and family if you find the information beneficial.

All posts by AF Thornton

Interim Update – 4/1/2022

Morning Notes – 4/1/2022

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Morning Notes – 3/31/2022

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Morning Notes – 3/30/2022

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Morning Notes – 3/29/2022

Afternoon Notes – 3/28/2022

Morning Notes – 3/28/2022

Afternoon Notes – 3/25/2022

Morning Notes – 3/25/2022

Afternoon Notes – 3/24/2022

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