Just One More Thin Mint…

Good Morning:

• If you haven’t seen Monty Python’s meaning of life, the title this morning might not mean anything. It is a hilarious Comedy.
• In the scene I referenced, an obese man is feasting at a table full of food. When it seems he cannot eat another bite, the waiter says, “how about just one more thin mint.”
• Of course, the man swallows the mint, and then the man blows up into a zillion pieces.
• That might be where the stock market and its proxy, the S&P 500 Index, find themselves. This (likely) final leg is the “Last Thin Mint”) before a 20-week cycle correction ensues.
• And with the CTAs (Momentum Traders) and the ODTEs (Zero Days to Expiration Options players) at the table, the ensuing volatility might require some Alka Seltzer.
• Overall the Stock Market is deciding if the last ten trading days are a bull flag or a topping process. 
• We believe traders should expect a Small and Final Bull Leg as the Market digests Monthly Options Expiration on Friday. Nevertheless, the Market could peak at any time and might be forming a “Cradle Trade” into the Algo Trigger (at 4175) to Move Lower.
• Recall our Price Projection (4288) for the peak of the Rally from the October low. The Market could Still get there quickly in a blow-off run, so keep an eye on that level.
• And the August 2022 high is 4345.75, also a slightly higher target in a blow-off run.
• But the lack of follow-through after Friday’s pivot higher shows some weakness in the price action. Weakness is important – but there is no solid sign of a top yet. 
• Also, the price remains in a small pullback bull channel on the daily chart. This is a sign of steady, algo buying. And while sentiment seems too bullish for the Market to move much higher without a meaningful correction, sentiment often stays near the bullish Extremes for some time if this is a new bull market rather than a bear rally leg.
• Resistance remains at the recent high (4208), with support at the recent low (4060.75).
• Economic data this morning includes wholesale inflation (PPI) and the latest unemployment claims.
• I will be in the trading room for the first few hours today. Tomorrow is the Monthly Options Expiration. So be careful going into Friday.
• On a housekeeping note, you may see some changes to the website and our branding over the next week.

A.F. Thornton