Morning Notes - 3/9/2022 | Archimedes Methodologies

Good Morning:

Yes, these genuinely are my raw notes – to answer a few emails. I keep a Word document open on my desk where I constantly jot down my thoughts and issues from my reading throughout the day. Other than running them through a spellchecker, my notes are raw.
No, I am not political, nor are these pages. I am a Libertarian and attribute equal blame for our economic and social predicament to both political parties – or the “Uniparty,” as I call them. As the old saying goes, “it takes two to Tango.”
I view the current struggle as the Globalists (most aptly represented by the World Economic Forum and Great Reset run by CEO Dr. Evil (Klaus Schwab) versus regular, hard-working people.
If I have a political viewpoint at all, my core philosophy would be “Follow the Money.” It takes the mystery out of most problems. So count me a member of the FTM party.
When the “R’s” are back in power, assuming there are elections this November, I will be an equal opportunity critic.
Anyway, I only care about politics and discuss the subject when it is impacting our trading, investing, and economic well-being. Nuclear War and my potential demise are always subjects I stay abreast of as well.
Cardinal Vigano, the former Vatican Papal Nuncio to the United States and one of the most intelligent people I know, nails the “real story” on Ukraine in an open letter. His views are not what you might expect.
BioLabs in Ukraine? The State Department has now confessed. No wonder Putin is angry. Here is the map.

And then there are the usual suspects associated with Ukraine…

So let’s get to it. The bottom line this morning is that the market is holding the rising Covid crash trendline, with the WEM low ar 4200 and the Put Wall sitting at 4000. The risk of a reflex rally far exceeds the risk of further declines here. A massive short-covering rally could be sparked at any moment.

We start this morning with Saudi Arabia, the UAE, and Brazil refusing to take Biden’s phone calls. $200 per barrel of oil is all but inevitable. Things that make you go hmmm…
Volume spiked yesterday – and it was a big candle – but mostly inside Friday’s range. In other words, in the scheme of the new normal volatility, the price did not move down like it usually would on such volume. Early signs of a pivot? Time for a reflex rally?
Consumer Staples nose-dived. Is risk back on? Or is this attributable to a temporary hit to consumer brands pulling out of Russia? Canceling an entire country can be expensive.
Overnight futures are putting in a very positive overnight candle. Sure, we are down at must-hold levels, and the WEM low is doing its job. But I can feel the rally risk in the air. Let’s see how this develops from here.
Don’t forget that after tomorrow’s inflation report and next Wednesday’s Fed Meeting and announcement, monthly options expiration follows on Friday the 18th. Previous monthly expirations have caused the most significant dips each month into the following Monday and Tuesday.
There is enough runway before the 18th if a rally got underway in the next few sessions. Otherwise, the market may ping pong down the falling wedge until monthly expiration. Then the market has room to stage a more sustained relief rally.
Let the price action guide you.
If you look carefully, the VIX started giving up on more panic during the final washout yesterday. Note the short-term out-performance by VIX.
That yield curve is flattening. Is a recession coming soon?

It’s been another crazy overnight session. We have a 100 S&P 500 point range with futures currently trading at 4240 up from the overnight low (also yesterday’s RTH low) at 4139.
Volatility will continue to be elevated as long as the S&P is under 4300.
This morning’s primary resistance lines are at 4249 and 4300. Support lines are at 4200 and 4076.
Eyes are on this morning’s European Central Bank meeting and their reaction to current events – it could be a sneak preview into next week’s Fed meeting.
From an options perspective, The considerable Open Interest at 4000 and 4300 frames the market. The market is fluid between the levels. If traders conquer 4300, there will be significant resistance above 4400.
The market is stalled below the overnight high and will open on the key, five-day line. The level is also near our first significant upside resistance level.
Overnight inventory is nearly 100% long – which could lead to an opening fade on profit-taking. While the market will gap higher from yesterday’s close, it is not a True Gap as it is still inside yesterday’s range.
My crucial line in the sand is the balance area low and yesterday’s RTH high at 4275. if [price punches through the level and there is continuation, I would be more short-term bullish. It may take a couple of attempts. tAs long as we stay below, assume the status quo.
I will update the levels and publish the RTH chart as soon as I have the opening price.

A.F. Thornton

Morning Notes – 3/9/2022

Morning Notes – 3/9/2022

AF Thornton

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Morning Notes – 3/9/2022

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