Summarizing this Morning’s Continuation Buy Signal

Typically in these pages, we are either in or out of the market depending on the Navigator Core Model and Algorithms. We set our buy and sell stop and move it up or down as appropriate. These are swing trading signals, designed to be slow going and fewer in aggregate (subject to market conditions). Our last buy signal came at 3812.25 on Wednesday morning near the open.

Because we could not communicate the last buy signal beyond the Founder’s Group text alerts, I wanted to help everyone find a continuation entry point on a pullback. As communicated in the morning outlook. This morning was developing to be that opportunity, so we set up the morning plan and went forward.

The continuation entry came close to the open and around 3825.50, so I communicated it. We set the initial stop at 3824.50 but realized it was a bit too tight for the morning volatility as the market rolled around to retest the morning and overnight low (and run everyone’s stops). I then widened the stop to 3822.50 and finally 3721.50, which remains the hard stop for the rest of the day. There was a typo in one of the alerts, which listed 3721.50 as the stop—apologies for being off a digit – but no harm, no foul. If you are in, the market looks solid for now. The nice thing is that there were multiple opportunities to get positioned this morning.

As communicated in the morning plan, the key this morning was to hold the new ground above 3800. We did not even touch the old gap at 3811.25, something I identified would be a sign of strength. With the Weekly Expected Move high back up at 3849, my expectations for the rest of the day are that we hold the ground, prepared for next week. I don’t expect much in additional gains today, and certainly not anything above the Weekly Expected Move high for weekly options expiration this afternoon.

Continuation trades are tough when you are not live. Flexibility is the key, as you may have observed. This morning has been a good opportunity to see the value of live trading, text alerts, and the supporting education I will be introducing tomorrow morning.

I am not sure we will make continuation trades at this level in the future. They are better aimed at live trading. But at least those of you who missed Wednesday’s signal had a chance to get positioned.

Don’t forget. The 2021 forecast is tomorrow at 10:00 AM PST. You will receive your invitation later today.

A.F. Thornton