Founder's Trading Journal Rush Limbaugh Calls It and Other Monday Musings Nov 21, 2022 AF Thornton 0 Comment Wake the Hell Up and Realize What We are Up Against – 1/11/2021 Good Morning:Just a little January 11, 2021 antidote from Rush – he saw it all coming just as we did. But like most of you, we did not want to believe that we had lost our country to psychopathic, European, communist, authoritarian, eugenicists – but it has happened. And the brain-dead President Orwell is a corrupt World Economic Forum tool, sadly worshiping at the feet of WEF leader Klaus Der Wienershnizel (the real Dr. Evil).And while President Orwell pursues the WEF Utopian fantasy (which doesn’t include you), China, Russia, and the other BRICS nations are methodically and justifiably plotting our undoing.With two more years at the helm and help from the RINOs, the Orwellians will solidify their permanent, authoritarian control of the USA – the biggest prize communists have sought since the 1950s. That should be just in time for the onset of World War III. By the way, for my fellow gray hairs, wasn’t Joe McCarthy, right? He doesn’t look so crazy now – does he?Step one – Last week, the G20 Surveillance State Association approved vaccine passports for all G20 countries. Can the passports be printed before the recipients drop from the shot?Did you hear about the G20 framework approved for reparations to third-world nations? Your treasury is about to be robbed again. After the Orwellians and their supporters take their corrupt cut (think FTX), the rest will be stolen by the despots that run these third-world (communist) regimes, Folks, we are talking trillions here! Patriots – we blew it. The midterms were our last chance. There will be no going back from here. Strap in because it all needs to burn down before we even have a prayer of restoring the Republic. This must be what it was like in the final days of Rome.Emma Goldman once observed that the elites would ban voting if voting worked. Embedded in her observation about voting is the true contempt of those in power for you and others they rule.The saddest takeaway from the midterms is just how many of our fellow citizens, especially young people, drank the Kool-Aid and share this contempt. They think joining the cool kids club and pushing the Skinner Box button on election day will save them from the Orwellian elites’ tyrannical impulse. Good luck with that.So should we be upset that the Fed might burn Europe down with higher interest rates? I am cheering for the Fed now. The more Europe, the U.S. Treasury, and the United Nations squawk at our Fed, the better.Even if we burn our economy down with higher rates, it may be our only chance to reboot the country we once loved.So what is your Plan B? Time to dust it off.Meanwhile, back at the ranch, futures are down slightly to 3950 ahead of the Thanksgiving Indigenous Peoples holiday-shortened week.Our updated forecast shows lighter volatility today, with a 1% implied move plus or minus the open.Both 3900 and 4000 are in play this week.4000 is where we see heavy resistance, with lighter 3975 resistance in between.To the downside, we note a support band from 3960 (SPY 395) to 3950. Beneath, there is more significant support at 3900. Below is another air pocket – let’s leave that alone for today.We see option market positioning as very neutral in the 3950 – 4000 area.Our default view is that markets want to revert into this zone, particularly the 4000 strike. Until further notice, we are in a balance/consolidation zone, still digesting that huge candle from over a week ago.We likely need a trigger to push markets significantly in either direction, and Wednesday’s 2 pm ET Fed Minutes appear to be the nearest data catalyst.Our base case is one more push higher before we set the nominal 80-day wave down into the early December Fed meeting.After that, the market should try to launch a new nominal 80-day wave which is likely to fail early as the market winds down into the 18-month cycle low scheduled for February 2, 2022.Oh, I forgot to mention that the February projected low is likely the mid-cycle “pause.” The next 18-month cycle low is scheduled for 2024 on the nominal four-year Presidential Election cycle, which might be the one that blows everything out of the water, just in time for World War III to commence.I will be in the Trading Room tomorrow only.Happy Holidays Comrades. Long live the State!A.F. Thornton
Founder's Trading Journal The Bear is Resting, Onward and Upward, Then? Nov 18, 2022 AF Thornton 0 Comment Good Morning:The market closed above our daily trigger lines yesterday, though it was a close call.Other key levels held, while our lower support line at 3904, also near the Weekly Expected Move low, acted as the pivot zone.Yesterday’s close managed to keep the 10/13 Navigator Swing Buy signal alive.If today’s market closes above yesterday’s high at 3990.25, I am still looking for that last push up to the 200-MA and other conjunction of targets/resistance around 4100 and possibly as high as 4150.As stated before, the 20-week wave usually runs up 6-8 weeks, even in a bear. We are in week six, so it is getting close to the danger zone. We will take it day by day.I have been up all night to catch the next hourly buy signal, which finally manifested around 3:45 am EST at 3957. We will trail a stop under the hourly Algo trigger, but the daily 5-ema also works well.Since I have been up all night, I won’t be in the trading room. Tom or Rose will cover.I will try for Rose, but her direct feed is not working. That means I have to manually mic here through the speakers. We will give it a go.Key levels have not changed, and the pullback looks acceptably healthy enough to buy for now.I have been spending quite a bit of time trying to assess the impact of these “meme” players controlling 40% of the outstanding options that are purchased and expire within 24 hours. It increases the risk of flash crashes, at minimum. Sure, we all like a 5-6% short-covering day like we had last week. But the mirror image of that day lies in our future as well.Mind your stops.Stay Tuned.A.F. Thornton
Founder's Trading Journal Bernie Madoff with his Clients’ Money / FTX’s Bankman-Fried his Clients’ of their Money Too – 11/17/2022 Nov 17, 2022 AF Thornton 0 Comment S&P 500 Continuous Future - Navigator Algo Sell Signal on Hourly Chart Good Morning:Tuesday’s sell signal on the hourly charts has morphed into a Navigator Swing sell signal overnight, triggering at 3942.Of course, today’s candle needs to close below 3942 to validate the signal. I will keep you posted on that front.A pullback from the meteoric short-covering candle on the daily charts a week ago today is to be expected.Nevertheless, we must be careful in the current environment, and the downturn is a rejection of the 200-day moving average on the daily charts.Also, we may be peaking the second of two nominal 40-day cycles in the first 80-day cycle slated to trough in mid-December.In short, it is too early to tell whether the 20-week cycle wave has peaked. We will know in due course. This may be a healthy pullback on the way to our original 4100-4150 target.But the reason we have been working the hourly chart signals rather than the daily ones is precisely what we are encountering this morning: waking up to a big sell-off.The FTX contagion grows, as do the global recession risks continuing to plague the markets.Futures are lower to 3945, down from overnight highs of 3990.Our key levels remain largely unchanged, with resistance above at 3960, then 4000. Support below is at 3904.For today, do not be surprised if the S&P 500 stages a rally today back into 4000, and with our volatility estimate of 1.03% we do not see a move down through 3900.That possibility is markedly higher for tomorrow and into next week.Yesterday there were very large volumes at the 4000 strike. The call activity, which is likely call selling, adds to resistance at that level.Conversely, there was clearly a lot of put activity below, which translated to an uptick in open interest at 3900 and 3950.We think these are likely short-term put sellers.With the algo in decidedly negative territory, we assign an edge to the downside after OPEX.We will watch the 4100 Call Wall area as resistance into month end.The Call Wall lines up closely with the widely watched SPX 200-day Moving Average mentioned above and hovering near 4080.A.F. Thornton
Founder's Trading Journal Klaus Will Own Everything and Be Happy; How About You? – 11/16/2022 Nov 16, 2022 AF Thornton 0 Comment Good Morning;The only thing scarier than the U.S. elections is the World Economic Forum that is behind it all. Here is yesterday’s message to the G20 from the WEF fearless leader, Dr. Klaus Evil.And just to keep it interesting, the FTX Crypto scandal promises to swallow Joe Biden and more Democrats whole.Apparently, FTX and its fearless, fraudulent leader, Sam Bankman Friedman, or SBF as he likes to be called, was the successor to the Jeffrey Epstein Operation. Oh, what a tangled web awaits us. Would somebody please wake me up from this veritable nightmare?As they say, I want a new timeline in the quantum world.Meanwhile, back at the ranch, Our models continue to point towards mean reversion into the large 4000 strikes through Friday’s OPEX. , with resistance at 4024 and 4040 and support at 3960.A little consolidation is needed before we push to the final target for this 20-week cycle at 4100-4150.From there, we travel to the 18-month cycle low next spring.The next turn dates are November 22nd and December 3rd.The 11/22 turn looks to be from lower to higher and vice versa on December 3rd.These are the minor waves, but the biggest wave down is still in front of us as we head into the nominal 18-month cycle low.Tom will be in the trading room to start the day, and I will be there in a few hours – watch your text alerts.We are still in the macro Navigator swing buy signal from 10/13 as long as the S&P 500 continues to close above its 5-day line.However, the Founders Group continues to work the buy and sell signals on the hourly RTH charts. That chart rolled into a short-term sell signal yesterday at 4028. Look for a buy signal soon.A.F. ThorntonA.F. Thornton
Founder's Trading Journal Inflation is over, the Orwellians retained Power, and Everything is fine, Dear… 11/15/2022 Nov 15, 2022 AF Thornton 0 Comment Good Morning:I overslept this morning in a rarity so infrequent I cannot remember the last time it happened.I have been burning the midnight oil on several breakthroughs in our algorithms to automate day trading and will have some exciting announcements soon.Futures have bounced back toward 4420 (440 SPY) on a less negative (than expected) wholesale inflation report (PPI).Likely due to the anticipated report, our current volatility estimate today is high at +/- 1.54%. Further, there remains a heavy negative gamma position in both SPY & QQQ. The 400 SPY and 4000 SPX are the interim floors we are watching now as support. Resistance holds at the 4050 line.The abovementioned levels remain the main feature of the S&P 500 index layout through Friday’s expiration.If my crystal ball continues to serve us well, we still see the market moving up to 4100-4150 before the next trip down to the valley at 3000 or so.For now, the market is short-term overbought, but the options complex gives it a slight bullish edge through Friday’s monthly expiration. Look for pinning around 4000 for the rest of the week.After Friday’s expiry, what should we expect? Well, one only needs to ask voters:More crime,No more prisons or prisoners,Skyrocketing energy prices,Skyrocketing inflation,A recession followed by a depression and ravaging deflation,No more free speech,A disastrous withdrawal from Ukraine in favor of War with China over Taiwan and war with North Korea, Iran, and Russia,Nuclear War (don’t worry, it is survivable, Lol),More plandemics plus untested and mandatory shots to kill people,A false flag EMP attack (the same people who rehearsed the plandemic a month before it hit have been rehearsing an EMP attack),A shortage of candles, Weber Grills, wood, and charcoal,More oppression of small farmers and centralization of food and water supplies,More cricket sandwiches,More altered plants and food,New models of horses and buggies,Abandoned cars converted to housing,New non-farting horses,Open borders,More corruption, including a corrupt judiciary, DOJ, and FBI,More surveillance state,Less free speechMore attacks on those terrible domestic terrorist parents,More grooming and sexualization of children,The return of serfdom and slavery, Reducation camps,An indictment of former President Trump,Indictment and jailing of that troublemaker Elon Musk,World War III, and many more issues I have likely forgotten.I know the majority wants all of this, and they voted for it. But apparently, I don’t run in those circles because I have never met one of these voters. Nevertheless, I look forward to meeting these comrades and learning more about how this works for the greater good.I know I am carping, but learning that the Orwellians funded their midterm elections with American taxpayer money laundered through Ukraine to Sam Friedman and the fraudulent FTX Crypto Exchange – only to come back to the Democrat Party in the form of $40 million in midterm campaign contributions set me off this morning.No trading room today, as I need to get the video done and out. I will be in the room every other day this week, beginning tomorrow.A.F. Thornton
Founder's Trading Journal Rent a Rally? 11-14-2022 Nov 14, 2022 AF Thornton 0 Comment Mid-term Election Seasonality - U.S. Stock Market Good Morning:Futures are off slightly to 3985 after a quiet overnight session. 4000 remains the large resistance/pin area and is likely in play until 11/18 OPEX (monthly options expiration). Above that level for today, we note 4024 and 4040 resistance. Support shows at 3976 ad 3948.The “Pain Trade” is still higher. I have targets up to 4150.This rally seems different, and too many people think it will fall apart. The probabilities are that it won’t fall apart quite this soon. Note the comparison between the S&P 500 daily chart and the composite seasonality chart above. All the market has done so far is follow the typical pattern for a mid-term election cycle. The real bear may still lie ahead of us.For now, the market is a bit ahead of itself, so consolidation or even a slight dip into 11/18 OPEX (monthly expiration) is possible. I am putting together an extensive, post-election video that will come out late today.Meanwhile, we are in a Navigator Swing buy signal. We are “renting” the rally for now. We are riding the hourly charts for entries and exits.A.F. Thornton
Founder's Trading Journal Interim Update – 11/11/2022 Nov 11, 2022 AF Thornton 0 Comment Good Morning:I am still under the weather today, but I hope to be back in the saddle on Monday. We will feature Tom from Bookmap in the trading room today. Tom specializes in trading order flow and is a terrific teacher.Indeed, after one of the biggest short-covering rallies I can remember, the Navigator Algorithm gapped into a buy signal yesterday, which technically triggered at 3850 in Globex after the CPI report. A small Gap may also present this morning so that Gap Rules would be in play again. The Gap and Go rules served traders quite well yesterday.We came into yesterday’s session in cash, and there was no reasonable way to execute the Navigator Swing buy signal at 3850 in the regular session. Buying in Globex on a CPI report bounce wasn’t prudent either. We had to let the market play out a bit, and the first opportunity to buy on a pullback came mid-day around 3905.As I had suspected, more than 40% of yesterday’s short-covering came from the DTE crowd – so it was appropriately painful for them, and maybe a lesson learned.On a bullish note, however, investors finally began to add to higher call position strikes, moving the Call Wall up to 4000 and restoring our original target for the 20-week cycle peak to 4100.While yesterday’s behavior was a classic, rip-your-face-off short-covering rally, there was a character change similar to the March and June 20-week cycle lows, with investors adding materially to higher call positions.As a result, we are confident that there were some real investors yesterday. We will cautiously scale in on hourly chart dips for a swing while carefully monitoring the progress from here.Between now and OPEX (options expiration) on 11/18, we look for pinning between 4000 and 4100, along with lower volatility in a positive Gamma environment. The DTE crowd (a new phenomenon) could bring unforecasted volatility.Also, yesterday, the MOVE index (bond volatility similar to the VIX for equities) finally began to break, indicating that the bond market is getting more comfortable with the current yield forecast. The break in the MOVE index is another character change.As the MOVE index shows, bond yields also plummeted yesterday.One has to remain skeptical that there will be follow-through from the short-covering since the CPI report still reflected 7% inflation and barely beat expectations. In my view, the short-covering rally is more likely attributable to a clearer Republicrat victory yesterday, with the House and Senate majorities within reach. Wall Street loves gridlock, as we all should. We are all better off if our illustrious government stops “helping.”The traditional market path in a mid-term election year is bullish from here. But these are not typical times.Soon enough, the reality of the global situation will set in again.Meanwhile, there is a pattern in the market that could take the S&P 500 index back to the August high at 4350. And perhaps that trading range I keep talking about finally sets in from there.Meanwhile, the next major trough is the 18-month cycle low in early March 2023. Typically, the forecast low would be lower than September, landing in the 2500 to 3000 zone. Only time will tell.Today, the 4000 target level is possible. Above 4000, look for resistance at 4010 (SPY 400), then 4049. Support shows at 3958 and 3946.We see 4100 as the top end of the range going into the 11/18 expiration. Enjoy your weekend.A.F. Thornton
Founder's Trading Journal Interim Update – 11/10/2022 Nov 10, 2022 AF Thornton 0 Comment Good Morning:I am under the weather this morning, so I will cover the Trading Room tomorrow. Tom will cover the room beginning at 10:30 EST today.The CPI Report beat expectations this morning, so the short-covering has kicked in spectacularly, with the S&P 500 jumping 3% pre-market. Yesterday, I had estimated a 2.5% move in either direction based on option pricing – obviously a little light on the forecast.Gap Rules will be in order this morning, emphasizing #2 and #4.Today is not likely to be a great day-trading day, as distortions will abound in the indicators any time there is a move such as this in either direction.And the move may be nothing more than the DTE (one day to expiration) crowd running for the hills. Watching them suffer along with Bitcoin on the road to ruin is a pleasure.Every bull market cycle has its pretty lady, and she was Bitcoin for this one. There could be nothing more representative of pure Ponzi speculation save for U.S. Treasuries. And the 10-year treasury auction was awful yesterday. Nobody seems to want what the U.S. government is selling.But just like the election, onward we go for now.So, do we get our second leg up in the 20-week cycle or a complete reversal of these gains today? As I have repeatedly pointed out, the 20-week cycle usually runs for at least four weeks, even in a bear.When I look at the wacky way everything turns out these days, a complete reversal of the 3% gain would not surprise me in the least today. That is pure speculation on my part (and not science). It is just a feeling when we live in a world where up is down, and down is up.And fading this rally would be the brave thing to do – if one truly believes Armageddon awaits us in the third push down of the bear.And my embrace of an upside-down world is in no small part drawn from Tuesday’s election results where a very high percentage of voters seemingly approve of (i) skyrocketing energy prices, (ii) skyrocketing inflation, (iii) a rapidly deteriorating economy, (iv) suppression of free speech, (v) a disastrous withdrawal from Afghanistan, (vi) untested and mandatory shots that are killing people, (vii) open borders, (viii) a corrupt DOJ and FBI, (ix) a police state attacking parents, (x) grooming and sexualization of our children, (xi) World War III, and many more issues I have likely forgotten in these wee morning hours.I suspect Satan himself could be elected our next President, assuming he is not already in office.In past bears, the upward portion of the cycle at this point ran for eight weeks. This week counts four from the October 13th low.So let’s see how the day unfolds and whether traders and investors set a positive tone into weekly expiration next week (or not).Markets easily fool the unwary, just as elections do. But in the markets, everything starts with short-covering, though today is an extreme.Follow-through rules the day – and it may take a few days to confirm investor moods. For now, this is another day to cull your portfolio. Keep the winners and sell the losers.Imagine the money lost this morning by the meme crowd shorting the market for one-day. It is likely the same crowd eating their Bitcoin. That is why I prefer probabilities rather than gambling.We remain in cash. Even if the Algo issues a signal today, I will need more confirmation as the indicators will distort for a few days. If the picture is clear, we will let you know. The Founders Group covered our shorts yesterday for a nice profit from our last sell signal. We always prefer to be neutral going into any high-volatility events.A.F. Thornton
Founder's Trading Journal Interim Update – 11/8/2022 Nov 9, 2022 AF Thornton 0 Comment S&P 500 Index Continuous Futures - 5-Minute Algo Forecast and Results Good Morning:Futures are down at this writing but still inside yesterday’s wide trading range. Overnight inventory is net short.Key levels remain similar to yesterday, but there appears to be more of a tilt to long put positions added yesterday. Support comes in at 3800, then 3780. Resistance is at 3836 and 3851.The Bitcoin crash and liquidity crisis drove yesterday’s wild and extreme moves.We took full advantage in the Founders Room, and I hardly had a chance to get off the mic for a break.I felt like I was calling out a horse race.As Bitcoin was the culprit, I was pondering the suggestion that Crypto is the new gold.The proposition reminded me of the Red Wave expected in the election last night.Crypto is hardly the new gold, and the Red Tsunami now looks more like a ripple.And, by the way, gold finally looks as if it is ready to make its move higher.And, it is a good time to remind everyone that the Navigator Algorithms are either cash (a short signal for more aggressive investors).We will keep an open mind, as always. Yesterday was a key reversal day on the annual calendar. Since we rallied into the day, it is reasonable to expect a decline after.And there is nothing like the CPI report on the table tomorrow to give us a catalyst. Of course, we never know what the CPI report will do – but the options market is pricing in a 2.5% move.And whether the Orwellians maintained most of their power due to cheating last night or because they are better at elections, it does not matter.As a side note, we always marveled at the 9/11 low-tech terrorist operation. Yesterday’s Arizona elections sabotage appeared to be similar. When the Orwellians knew that most Patriots showed up on election day, what better way to suppress the vote than having 20% of the machines stop working in the reddest and most populated areas of Maricopa County in Phoenix?And, given that the Orwellian gubernatorial candidate was in charge of the elections – the rest is history.Nor would a Red Wave tsunami, now less than a ripple, have made any difference.And if you look at Florida and Ohio, where the States cleaned up their elections, and it is more difficult to cheat, you likely see a true barometer of where the country stands.The point is this; the die is cast, and the outlook for our nation and the global economy is ominous.The average person, and maybe even the above-average person, has no idea what is coming.You see, bad as things are, they will get much, much worse. Dystopian is the most polite word that comes to mind.You can already see the plugging of the proverbial dike. First, Credit Suisse. Whoops, another leak – Bitcoin. There will be another and another until the system finally blows.I hope I am wrong. I want to be wrong. But I also know I am right.As to the short-term, the Bitocin crash dashed the last gasp of bullish momentum yesterday morning.On a positive note, it was fun to take money from the “one-day wonder” Meme, DTE, and YOLO options crowd yesterday as they panicked to cover their shorts, giving us two trading extremes on the same day. We took full advantage.Tomorrow’s CPI report looms large – and it will likely be more of a wait-and-see chop day today.A 2.5% expected move is forecast for tomorrow. I will be in the Founders Room, and you should be too.A.F. Thornton
Founder's Trading Journal Interim Update – 11/8/2022 Nov 8, 2022 AF Thornton 0 Comment Good Morning:The day has finally arrived. Will we kick the bastards to the curb? Will it make a difference?And here is the greatest irony:But first, you must understand that the elite cabal wants to control the weather.After all, they look at themselves as gods. Some think the elites are already manipulating it.Add to that conspiracy, one strategy the Republicans are deploying is to all vote in person on election day. This way, the Democrats cannot override the election results with machine algorithms.So here I sit in California this morning, and we are having one of the worst rainy days we have experienced all year.It won’t be pleasant to vote in person in California today.Things that make you go, mmmm…Back to reality, the market will gap open today – so Gap Rules are in order.Our Volatility Trigger (3800) is sliding higher, indicating puts are being closed and calls added.While the current gamma region is somewhat flat, negative gamma kicks in below 3800 with significant, positive gamma building near 3900.Simply put (no pun intended), the market encounters higher volatility below 3800 and lower volatility as it approaches 3900.Today, there is a band of resistance above at 3834, 3842, and 3850. Support lies (no pun intended) at 3800, then 3760 (SPY 375).The election should release event volatility and support markets into Thursday’s CPI reading.Still, the VIX is consistently drifting lower to its current level of 24.5 despite the CPI volatility event looming.Without getting into the mechanics of making sausage, we associate the current VIX structure with regime change – e.g., from bear to bull markets.When this signal failed in the past, it was due to an unfriendly Fed – just like now. So I point this out to keep it in our narrative as we weigh all the evidence as we advance.I am in the trading room for a few hours this morning, where I will be featuring my new predictive Energy Algorithm. This new algo is still in beta testing, but we will monitor it today in real time.The algo predicts turns by analyzing the day’s low and high-energy magnetic field periods. We make this location specific, as we can switch between Chicago and New York, where the EMini futures contracts trade.Oh, did I forget? One last item from yesterday. The Commander of US STRATCOM recently said: “Ukraine is just a warm-up for what’s coming, and we need to prepare for the big one.”Happy Election Day – the election might offer a small modicum of hope in this insane period – or not…A.F. Thornton