The Market Defied Gravity – What’s Next?

Good Morning:

• The market surprised the crowd Friday, but not us. Our buy signal finally gripped, and our patience was rewarded.
• And we also have had some nice trading profits inside the consolidation over the past week in the trading room.
• Gap and Balance Rules are on the table this morning, as the market is slated to open with a gap higher.
• Resistance is at 3975, then 4100. A potential head and shoulders topping pattern becomes visible as the price approaches 3975.
• And the rally Truly begs the question, reflecting a mini version of my struggle in finalizing the forecast for the rest of the year.
• The 60 and 20-year cycles predict a very good year for 2023 – past the February/March dip.
• Yet how can that be? Have you ever seen such seemingly justified doom and gloom?
• And former Secretaries of State Condoleezza Rice and Robert Gates wrote an opinion piece on the front page of the Washington Post calling for all-out war with Russia!
• Are the charts leading Us to the contrary play of the century? A new bull run born in these perilous times?
• If so, and I am definitely not forecasting this, but here is a hint to the madness; the business of the United States of America is War, and the market often moves higher when interest rates begin to rise.
• Naturally, we need to be alive to collect our winnings, even if a rally ensues. The wisdom of starting a war with Russia or China escapes me.
• And Interest rates are merely normalizing from Artificially Low Levels – as long as they crest soon. Do the markets simply need to get past the initial speed and shock of the move?
• So There may not be a deep recession due to the war spending relative to Russia and China. That is why politicians love war. And bank profits should grow faster with the higher loan spreads.
• Most financial collapses happen in the peace that follows war – Not Wartime itself. I will explain this in the forecast, but Answering the potential rally question is lengthening the report, and leading to some Delays.
• On the swing trade, The Founders Group is watching the five-day line for stops, and we will consider taking profits at 3975 on all but a runner if the market moves rapidly there today.

A.F. Thornton