Founder's Trading Journal - 9/14/2022 | Archimedes Methodologies

S&P 500 Index Continuous Futures / Today’s Close – 3965.50 / +15.25 pts (+0.39%)

Published Wednesday Afternoon, September 14, 2022

Navigator Swing Strategy™

Navigator Algorithm™ Trends

Navigator Trading Sandboxes™

Click here to learn about Trading Sandboxes and how they work. The table below lists the granular price obstacles a trader will encounter inside the expected move ranges. The DEM and WEM help us narrow our focus for the day and week ahead. We also included a few important price levels outside the range boundaries – for the less probable occasions (like yesterday) when the price exceeds the edges.

To successfully navigate this data, traders need to monitor the price auction with volume profile histograms for the day and a cumulative profile aggregating the last 10-20 sessions. As price travels north or south from level to level, volume tapers off at reversal points, and the process begins anew in the opposite direction. Professionals call this “price discovery.”

Founder's Journal and Trading Notes

Below are a few relevant excerpts for today from A.F. Thornton’s trading journal. Check out the full notes with a paid Subscription, which also includes access to Mr. Thornton’s live charts in the Founders Trading Room. The full journal contains Mr. Thornton’s daily trading plan and reflections on his daily gains and losses.

References to “the Market” below mean the S&P 500 Index. The quoted numbers are from the front month E-Mini Continuous Futures Contract (now December 2022).

A few excerpts on today and what to expect tomorrow...

The market caught its breath today, with bulls and bears evenly matched and a slight gain. There was some price stalling on above-average volume, reflecting the indecision. My overall thought is that it could have been worse.
Quarterly expiration skews the book for the next few days. The expiry at 4000 is gigantic. And perhaps that can serve as some glue that holds things together – but I have no predictions for now.
There is the Put Wall at 3900 for support, and 3800 is no slouch for open interest and Put support.
We have seen this playbook before. The Dealers settle on Friday and then pull the protection rug out from under the market by Monday. Then prices slide into the Fed announcement on Wednesday.
Even in a bad selloff, we get a pause day like today and resume the slide in the next session.
When a similar circumstance presented earlier this year, parachutes were in order.
If quarterly expiration wasn’t a factor, conquering the upside 5-day line that closed at 3989 would trigger a nice rally. One can hope.
Otherwise, we have to look for support at the September 7th low (3883.50), then the July low (3723.75), and then the June (52-Week) low at 3639.
Below those levels, let’s talk later.
Don’t forget that we are trading below the WEM low (3975), though the price tried to tuck back inside the WEM all day and failed. It appears that Dealers used the occasion to get out of their positions – making the WEM low resistance for most of the day.
The key 10-year treasury interest rate briefly popped up to a new high but could not sustain it. Let’s see what happens tomorrow.
There is an old saying – when in doubt, stay out. I cannot make a decent forecast with expiration at hand. But we don’t have an algo buy signal yet, and our aggressive swing traders are short from 4127.50.
We use closes and price acceptance over the 5-day line as our buy stop for shorts if the market turns north before we hit our lower targets or a buy signal presents.
This kind of market confounds even the best of us. It will go up when you think it will go down and vice versa.
But the trend is down until proven otherwise, and the trend is your friend.

A.F. Thornton

BluPrint’s business model for retail services is sharing the buy/cover short and sell/short signals generated by our proprietary Navigator Algorithms™ for the S&P 500 index. Subscribers can implement the signals with the SPY ETF, SPX or SPY options, S&P 500 EMini (and micro) futures, or a combination of these instruments as the context warrants.

Futures and options are leveraged instruments that involve high risk, volatility, leverage, and loss. They have different characteristics with comparative advantages and disadvantages. With leveraged futures, you could lose more than your original investment. Past performance does not guarantee that you will achieve similar results, nor do we.

A.F. Thornton is not a financial advisor, nor is he your financial advisor. He only expresses his opinion based on his experience. Your financial situation and experience may be different. This blog is for educational and inspirational purposes only. Your investments are solely your responsibility. You must conduct your own research.

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Founder’s Trading Journal – 9/14/2022