Morning Notes - 7/21/2022 | Archimedes Methodologies

Good Morning:

We picked up another 15% in August Monthly SPY calls when the S&P 500 Futures dipped into 3840 yesterday, bringing our total position to 40%.
We exceeded the top of the WEM yesterday to tag the top of the Daily Expected Move, then came back inside the WEM range.
Since we are at the top of that range, and the market has behaved more orderly lately, I don’t expect much more in the way of gains this week.
But when we do reach higher, and even though there is a Rocket Pocket above us beginning at 4375, we will encounter considerable option strike and Gamma resistance at 4000 (the middle of the Rocket Pocket).
Then, there is that “X” marks the spot thing.
A picture tells 1000 words:

Truly – if 4060-4075 were Grand Central Station – all the trains meet there. So that is our target for this rally.
We will see how the market reacts when we get there.
Meanwhile, the daily 5-EMA is our stop threshold to maintain the rally and current swing positions.
The 21 and 50-day lines, as well as the 5-week line, will provide support along with our proprietary Algo Trigger.
This is covered in more detail in the Live Session recording earlier this morning (linked above).
By the way, the European Central Bank raised interest rates by .50 basis points.
The rate increase is their first in 11 years.
Wow, wait for a recession, then raise rates. They could get a job at our Federal Reserve with that Resume. Awesome!

A.F. Thornton

Morning Notes – 7/21/2022