Founder's Trading Journal 0 Comment Navigator Algorithms – 100% Invested Bottom Line As the new administration rolls the Trump Agenda backwards, one of the first attacks is on fossil fuels – oil in particular. On his first day in office, Biden canceled the Keystone Pipeline and began a war on fracking and US energy independence. Look for energy prices to skyrocket in the coming months. Besides the nearly 200,000 job losses associated with the rollbacks, prices at the pump are likely to rise significantly.The rising energy prices will also lead to rising utility prices. All of this will serve as “hidden taxes” on the middle and lower middle class who spend a disproportionate amount of their income on these expenses. This dark cloud over the economy is likely to lead to stagflation similar to what we experienced in the 1970’s. Short-term, the overnight futures market sank, perhaps providing us with a secondary entry point today or Monday. Stay alert today for a follow-through signal for those who missed Wednesday’s buy – or a sell signal if we run the stop on our existing position. Navigator Core Algorithms ETH Daily ES The daily trend is up but riding our stop line around the 3818 level. As expected the Weekly Expected Move High at 3849 backstopped the market yesterday. This will either serve as a secondary entry point, or we may run our stop today. Stay alert to further notification.The key issue today is whether price will find acceptance back in the previous six-day balance range between 3750 and 3800. Likely, however, this is a retest of the breakout into the new range above 3800. Narrative Dominant market themes include a vaccination supported, broader-based economic recovery now supported by the new stimulus package. We remain in the strong seasonal strength period for stocks which occurs from October through April. Tech profits continue to be rotated into prior, underperforming sectors. Fed policy remains favorable, although Congress recently took some of the punchbowl away from the Fed in terms of main street lending. Considerable uncertainty surrounds the economic impact of early decisions by the new administration.Investor sentiment remains the biggest concern – particularly a retail option investor bubble. Excessive optimism abounds as manifested in record margin debt, confidence surveys, options speculation, stocks vs. GDP and record IPO issuance. The frothy sentiment exposes weaker hands, keeping the index vulnerable to almost daily liquidation breaks.Stops are more critical than normal in this environment. Make sure all your trend lines are up to date with the liquidation breaks. Volume Profiles Key Economic Reports PMI flash reports, existing home sales, crude oil inventories, and oil rig counts are all due today. Morning Plan As set forth above, the risk this morning is that current prices are ticking back within the 3750 to 3800 balance area from last week. We will open with a solid, true gap lower on the heels of a poor high in yesterday’s distribution. Poor highs typically lead to backing away first and then should be carried forward for repair. In essence, longs with poor location got stuck yesterday and are backing away. Overnight inventory is about 90% net short, and we are currently trading in the lower third of the overnight range. A large unfilled gap is still in play just below the overnight low, with the top of the gap at 3811.25 and the bottom at 3797. Expect the gap to provide support until it doesn’t. Continuing to hold above the gap without entering it is the most bullish outcome and would support a new entry point and continuation trade. Some acceptance within it or a full fill would be less so and would potentially change the current tone a bit, perhaps running our current stop. The overnight selling is old business, taking care of the poor location longs trapped near the poor high. Our early focus is on whether or not they are done or not. Failing to take out the overnight low early would tell us that they are done, and new business can commence, which “should” be new money buyers coming in. Given the inventory position and knowing what we know about the sellers’ nature in the overnight session, there remains a potential for an early fade. We need to pick our spots wisely using either the first one minute high or across back up through the open as the key to reversal after any initial drive lower. If the overnight low holds or the fade is only slightly into the old full gap fill, target the overnight halfback first at 3831. Should the gap get breached and we have very bearish internals and faster tempo, this would tell us that newer sellers are coming into the market and we should target the gap bottom at 3797. A.F. Thornton
Founder's Trading Journal 0 Comment Though I had to rewrite the last two blogs, the Website, Email, and Blog integration are back to full functionality.You will be receiving an invitation to the Live 2021 Forecast Webinar scheduled for Saturday morning at 10:00 AM PST. We will be recording the Webinar if you are unable to attend. Again, I cannot emphasize how important this Webinar is to your financial security and future.A.F. Thornton
Founder's Trading Journal 0 Comment Navigator Core Algorithm Status ETH Daily ES The daily trend is up coming off a 3812.50 core buy signal on 1/20/21. The move off the 1/19 low has been quick and powerful. After reaching another all-time high, the index is skirting the Weekly Expected Move high around 3849. The action remains bullish – with the caveat that Gamma risk (the risk related to the retail investor option buying frenzy) is unusually high – maybe even in bubble territory. Other risks include some breadth divergences as can be seen in the unweighted S&P 500 index ETF (Symbol RSP). With prices at all time highs and an expansion of range yesterday, buyers and seller are more likely to be balanced today. A change in tone and potential further correction would only be signaled by acceptance of prices within the recent six day balance range between 3750 and 3800. The FANGMAN stocks came to life yesterday and are adding to those gains this morning, giving a relative strength hat tip to the NASDAQ 100 index. 2021 Forecast Live Webinar The 2021 Live Forecast Webinar will be Saturday Morning at 10:00 AM PST. This is likely the most important forecast I have ever put together. There is significant and draconian change ahead that promises to be more damaging than the 2008 financial crisis. If you are not prepared, the consequences will be devastating. On the other hand, if you are prepared the rewards will be equally significant. The Webinar will be recorded if you cannot attend.A.F. Thornton
Founder's Trading Journal 0 Comment Navigator Algorithms – 100% Invested We went back into the market at the open yesterday on a core, Navigator buy signal at 3812.50. We got the signal out by text to the Founders Group, but an automation feature hiccupped over the past week on this site. Yesterday, the software link broke down completely – which I finally traced to an update from a Woo Commerce app on the site that created a software conflict. Fun, right? Anyway, we were unable to post the signal here until now.The market never looked back this morning and already tagged the Weekly Expected Move. There are some concerns with breadth and financial stocks weakening even though Morgan Stanley announced stellar earnings. It is the old “when what should happen doesn’t” theory. I am also cognizant that “buy the election sell the inauguration” resonates with many investors. So we may take profits on this latest core model signal in the morning – we shall see. If you are in cash, my advice is to wait for the next signal. I will keep you advised.The 2021 Forecast Live Webinar is scheduled for Saturday Morning at 10:00 AM PST. One of the items on the agenda is opening up the Founder’s Group to others who might be interested. The Founders Group consists of a small group who participated in the Navigator algorithms’ creation. They were the loyal “testers” as each version emerged from the lab. They get multiple short and intermediate buy and sell signals in real time by text, and the signals will be expanding in scope, even beyond the indices. They also have access to live trading and mentoring with me.Once I perfected the algorithms, I wanted to have all the bugs worked out on the communications side before opening up the group. We are almost there, as the alerts are based on a phone app. I will cover all this Saturday morning.In the meantime, it is nice to be back in the saddle after 10-days in the Peoples Republic of California.A.F. Thornton
Founder's Trading Journal 0 Comment Navigator Algorithms -100% Cash Published this morning.Despite Washington D.C. and the establishment’s dogged determination to stomp out and criminalize nationalism, populism, and any speech that supports it, the financial markets remain amazingly resilient. Buyers are piling in every time the S&P 500 index tags 3775, but they disappear at any price much above 3800. Economically sensitive sectors like energy, transportation, and small cap stocks continue to attract relative strength.Meanwhile, the Democrat Washington D.C. Attorney General is considering arresting President Trump, Donald Trump Jr., Rudy Giuliani, and Mo Brooks for inciting a riot. Another impeachment is underway. But as indicated yesterday, the market lives for green – not red or blue. The “elephant” in the room is not Republican but is more attuned to stimulus, liquidity, normalization, and Governor Cuomo’s stunning reversal to open New York back up. The “donkey” (asses) in the room are the spiteful politicians. Seemingly, these politicians lack self-awareness. China Virus deaths hit another record yesterday if the statistics are valid. Small businesses and a lot of regular people need help.It is not easy to sort through all of this, but the algorithms move closer to buy alerts as the market moves sideways. Just like me, the market is sorting through new opportunities as the dust begins to settle. And even if we reenter the markets, we have to monitor positions in light of valuations and attendant risks.What I do like is investing in the face of consternation and fear. The recent giddiness has abated, albeit for reasons not directly related to the markets. Let’s see what the day and the rest of this week brings.In the meantime, my unsolicited advice to the spiteful, arrogant, “morally superior” Globalists hellbent to crush the voices of ordinary people – “what you fear you create.”A.F. Thornton
Founder's Trading Journal 0 Comment Pushing a few wrong buttons this morning, so forgive the repeat emails. We just issued a buy signal to the Founders Group at S&P 500 futures 3801.25. The stop for today is at 3797.25. This could be another short run like the last time, so stay tuned.