Higher for Shorter?

Higher for Shorter?

S&P 500 Futures - Half-Day Chart With Million Dollar Squares and Algo Trigger
S&P 500 Futures - Half-Day Chart With Million Dollar Squares and Algo Trigger

Good Morning:

 -☿- I will be in the Trading Room within 30 minutes after the NYSE Open and for the first few hours of trading afterward. I will be calling out trades on the 15-minute chart. I will be on the mic – so there will be very few timely text alerts. Why not consider a free trial this morning?

 -☿- The Founders Group moved our Archimedes hourly and daily strategies to cash earlier this week at 4027.75.

 -☿- The call was manual (not algo-driven). We perceived the exit as a good time to take profits and go to cash before the Fed announcement slated for yesterday.

 -☿- While it was not necessarily our recommendation, our more aggressive Founders Group compatriots shorted the market.

 -☿- Our practice is to move to cash before ultra-significant economic events. Yesterday’s Fed announcement was one of those events.

 -☿- Our exit decision was affirmed after yesterday’s 0.25% rate hike. After turning South from the WEM High, the algorithms formally painted a sell signal near the close at 4021.75. The summary of the Fed’s comments indicated higher rates that will begin to come down sometime in 2024.

 -☿-  And we still see the arguments tipped slightly toward the market grinding higher from the March 13th low through May.

 -☿- Granted, the market’s advance and slope have been somewhat weak, but that sometimes happens when the sectors are mixed.

 -☿- And if you like banks or other financial sector members for the long term, do you buy on the canons or the trumpets, as Ben Franklin would say?

 -☿- At a minimum, the triangle on the Monthly S&P 500 Index Chart indicates confusion – bulls and bears trading leadership with neither dominating.

 -☿- But our edge is that our algorithms will tell us what to do and when. They are in cash/short signals for now.

 -☿- It is simply the case that the algos moving swiftly back to buy mode would not surprise us. That is my unscientific opinion.

 -☿- And granted, it does feel like everything, and I mean everything from stocks to bonds, is living on borrowed time. And they may very well be.

 -☿- But I have learned over many years that even when we expect a storm, it takes longer than we might ever have expected for the storm to arrive. And it would be a mistake to jump the gun.

 -☿- Bad as it is (and it is really bad), our country has survived worse. The stakes are high, but many white hats are doing the hard work of preserving our country and turning it around behind the scene.

 -☿- As one small example, the Arizona Supreme Court ordered signature verification for Kari Lake last night.

 -☿- If we had to predict, the “crash” everyone expects may not arrive until the 18.6-year cycle peaks sometime in 2027. And the rally into that “crash” could be something to behold, not unlike the feverish rally into the 1929 peak. We shall see.

 -☿- Meanwhile, with the Fed out of the way, let’s follow the Archimedes Algorithm and the price action. We will know what to do and when. At least the 200-day line is still alive on the cash SPX chart.

 -☿- And when the crowd is as bearish as they are now, instinctively, it makes sense to consider the other side of their trade, especially if our algorithms say so.

 -☿- The S&P 500 Index macro fulcrum remains at 4000. 

A.F. Thornton

AF Thornton

Website: https://tradingarchimedes.com

A.F. "Arthur" Thornton is an expert in logic, risk/reward quantification, market fractals, pattern recognition and asset class behavioral analysis with 34 years devoted to developing algorithmic and quantitative trading systems. In addition to trading his own capital, Mr. Thornton designs custom algorithmic and quantitative trading systems for a small and exclusive group of exceptionally qualified traders.


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