Good Morning:

At least it is a good morning for our subscribers. It is a fabulous morning for us. In last night’s commentary, the only scenario I didn’t mention was if the CPI inflation report came out higher than expected. The whisper number was lower, not higher. If the number met expectations, I expected the market to yawn. 

I did not expect the number to increase, but I suspect prices are already reacting to the Orwell Administration’s latest “Inflation Reduction Act.” Our government always puts lipstick on the pig – and names any legislation the opposite of what it does. 

The people are not stupid and are on to the tricks. That is why the Orwell Administration is now trying to criminalize opposition to their policies. They are desperate to hold on to power. These establishment globalists (it matters not whether a “D” or an “R” follows their name) are taking our Country down. The results of their ill-advised policies could not be more serious.

Nevertheless, for our part, we got the market right. We were In and out timely on this last run. I posted the sell signal in the chart above, which came yesterday at 10:30 AM EST when we communicated it to our paid subscribers. Our various algorithms identified the deteriorating foundation of the rally.

If the market crashes – this is where it begins. In Elliott Wave theory, wave (iii) of (3) confirms when we get a close below 3883 – and we are not yet there. Though it is doubtful, the price could still flip back up in an ABC correction. The millennial roundie at 4000, where the most outstanding options and Gamma concentrate ahead of Friday’s expiration, is a key level to hold, or the market gets into another Negative Gamma sell spiral.

We will let it play out today. Those subscribers who went short on yesterday’s sell signal are having a happy morning. And if you shorted futures, watch the Put/Call ratio and don’t get caught in the first short squeeze. If you took a SPY or SPX Put, you can be more patient. The key here is the 5-day line, currently around 4040. Close above it; there is still upside potential. Close below it, not so much.

A.F. Thornton