Good Morning:

• As a housekeeping note, the Morning Notes will now focus strictly on the overnight action and what it may add to the picture if anything. The Afternoon Notes are where you will find the key levels and insights. I will try to get a video out later today. My schedule has been swamped recently, and the videos take a great deal of time.
• Today’s DEM shows 45 points plus or minus yesterday’s settlement at 4130.50. That means the options market is pricing today’s range between 4085 and 4175. The WEM remains between 4145 and 4310. Can the market crawl back up inside the WEM range today? Can price save the Dealers from sudden death and hedging activity that will exaggerate market declines? We shall see.
• The 21-Day line (mean) at 4175 has now become resistance, providing little (if any) support on the way down. The goal would be to recover that line soon and then the 5-day line. Of course, these accomplishments would bolster the bull case. But to take a long swing trade, we need to see the Navigator Algorithm start painting buy alerts on the 2-hour chart. 
• For the bearish case, I still think we can eke out a retracement up to 4155 and perhaps a bit higher to 4085 before rolling back into a final down leg into the Fed Speech to be released Friday morning. 
• Any retracement higher, however, is challenged  not only by the 21-day line at 4155, but by a band of resistance starting at the Volatility Trigger (4140) and some significant Gamma strikes at 4150. Perhaps this is related to the failing WEM range low, around 4145.
• We need to watch oil and other commodities – they may be coming to life again after a well-deserved rest.
• Price tagged 4110 as the overnight low, still within the tolerance range for a turn at the 4120ish high volume node. Interestingly, we are making new lows overnight that remain elusive in the regular day session. Normally, overnight highs and lows are tested in the regular session at some point.
• I remain bearish in the longer term, though certainly willing to change my mind. My immediate concerns relate to some very basic kitchen table issues.
• 1 in 6 households (20 million) is behind on utility bills. 
• Nearly 1 in 10 (14 million) are behind on their rent or mortgage payments, and 40% of these expect to be evicted or foreclosed in the next few months. 
• Finally, Americans piled on $46 billion in new credit card debt in the second calendar quarter—the biggest leap in two decades.
• You won’t hear or read about the aformentioned kitchen table issues in the mainstream media. They act as the public relations arms of the ruling class that created this financial mess. For these dishonest and compromised information brokers, committing to narrative supersedes fact-gathering and accurate reporting. This is especially prevalent as we approach the mid-term elections. The media backs the World Economic Forum and its Democrat Party operatives.
• While the market is focused rightfully on Fed Policy and interest rates, corporate earnings are bound to reflect the deteriorating economic reality at some point. It would be hard to justify current lofty valuations in the circumstances, much less new highs. 
• But the stock market does not always make sense or get it right. At the moment, and with WWIII looming, much money is fleeing Europe and other regions for the U.S. Dollar. Some of the fleeing funds are going into U.S. stocks, though bonds become increasingly attractive as rates increase.

 As always, stay tuned.

A.F. Thornton