Founder's Trading Journal Interim Update – 10/18/2022 Oct 18, 2022 AF Thornton 0 Comment Good Morning:Before I forget, I want to mention two of the best sources I know right now for unfiltered, objective Global News. First, let me mention Alex Christoforou [https://rumble.com/c/AlexChristoforou]. Alex roams around Athens, Greece, Nicosia, Cypress, or wherever else he may be, with his GoPro camera giving you straightforward, unfiltered, and compelling analysis while touring beautiful historical sites. He is a true, old-school journalist in a time where everything is propaganda.My second suggestion is Redacted [https://rumble.com/c/Redacted]. You will likely remember Clayton Morris from Fox News. He and his wife, Natalie, have joined the ex-pat community in Portugal. They do a daily broadcast at 4 pm EST, and I never miss it. The couple always records the broadcast for later viewing. Once again, objective, unfiltered, old-school journalism.I provide Rumble addresses for both news sources because they have been suspended from YouTube several times for departing from the prevailing “narrative.” That is how you know you can trust them. They won’t be on YouTube much longer, as nobody is who tells the truth.Now, on to the stock market. Besides seeing the most upticks in several years at yesterday’s NYSE Open, we now have a huge gap open in Globex last night, and the market has yet to stop rallying. We have not seen a Globex Gap open of that size in a long time.At this writing, the market will open in New York with a 272-point gain in NASDAQ, 627 point gain in the Dow, and 80 point gain in the S&P 500. All of the major indexes have gained more than 2% overnight. The Asians and Europeans are experiencing the same “Pain Trade” as the Americans as they all puke up their puts. The following chart tells the story. The Put/Call Ratio Screamed "Pain Trade Ahead" on Friday This Chart shows the S&P 500 Index in the upper half, and the Put/Call ratio in the lower half. The ratio hit the highest level in history Friday, higher even that the 2008-2009 Financial Crisis. What does the chart above tell us? Retail traders were shorting the market in historic numbers – AT THE BOTTOM. And it is likely that some hedge funds and institutions were doing the same. They are all running for the exits now as if someone yelled fire in a crowded theater.And here is another chart that lends some perspective: Typically - The 200-Week Moving Average Only Fails in A Full-Blown Recession This is a chart of the S&P 500 Index with Recessions Shaded in Red, and the 200-Week Moving Average Underneath. Cleary, the 200-Week Line Holds Unless A Recession has Fully Taken Hold Naturally, the Orwell Administration has redefined the term “Recession,” but with the GDP Now forecasting growth in the third quarter, the economy is sputtering but not quite there yet. War is good for business – do you see how that works?In our decision matrix, we deal with probabilities and look for low-risk entry points. This is why I had mentioned the 200-week line Sunday evening.And, since everyone will be looking for an excuse why the market is rallying (until it stops), how about this? Peak Inflation and Interest Rates, Anyone? Last Year, this chart was flipped, with the divergemce indicating that rates would rise. Now it is the opposite, indicating that the important 10-year Treasury Rate could be peaking. We will have some deeper analysis for subscribers later today. For now, resistance shows at 3875, then 3895. Support shows at 3700, then 3649. The Put Wall has rolled up to 3600 (from 3500), statistically a bullish signal. We also see the Vol Trigger & Zero Gamma points sliding lower, which suggests calls building. Like the last rally, call-building is necessary to sustain the rally and pick up where the short-covering leaves off. I still see a bullish edge into Friday’s OPEX, due to Vanna tailwinds and Charm. This idea strengthens if/while the S&P remains above 3700 support (the highest Gamma Strike). Large puts <=3700 also tilt the board in favor of bulls as these Puts decay into Friday’s expiration. Needless to say, Gap Rules are applicable this morning, especially Numbers 2 and 4. Overnight inventory is obviously 100% long, so there might be some profit-taking from our overnight brethren at the Open. I will be in the trading room today, though day trading could be treacherous in this runaway environment. I will join the room about 15-20 minutes after the opening. Buy dips to the five-day line – at least for now. A.F. Thornton
Founder's Trading Journal Founder’s Trading Journal – 10/16/2022 Oct 17, 2022 AF Thornton 0 Comment S&P 500 Index Continuous Futures / Friday’s Close – 3597.50 / -84.25 pts (-2.29%) Published Sunday Evening Navigator Swing Strategy™ Current Position: Long @3603 on 10/13/2022 * Stop: Subscribers Only Last Signal: Closes Short Position from 10/5/2022 @3769.50 for 137 points S&P 500 Index Gain/Loss from Long Signal: +9.25 Points / - 0.25% 20-Week Cycle Bottoming S&P 500 Continuous Futures - Cycle Analysis Navigator Algorithm™ Trends Hourly: Bullish Daily: Bullish Weekly: Bearish Monthly: Bearish S&P 500 Index - Navigator Algorithm This is a chart of the S&P 500 Continuous Futures with the Navigator Algorithm Status Panels, a momentum indicator in the lower panel, the Daily and Weekly Expected Moves marked, and a cumulative Volume Profile on the RIght Side of the Chart showing high and low volume nodes where price may be challenged and reverse, Navigator Trading Sandboxes™ Click here to learn about Trading Sandboxes and how they work. The table below lists the granular price obstacles a trader will encounter inside the expected move ranges. The DEM and WEM help us narrow our focus for the day and week ahead. We also included a few important price levels outside the range boundaries – for the less probable occasions when the price exceeds the edges. The table reflects the key trading levels for Monday, 10/17/2022. The Daily and Weekly Expected Moves are Color Coded to the Algo Chart above. Otherwise, the listed levels are speed bumps to price traveling north or south, and price has the potential to reverse on one of these levels. To successfully navigate this data, traders need to monitor the price auction with volume profile histograms for the day and a cumulative profile aggregating the last 10-20 sessions. As price travels north or south from level to level, volume tapers off at reversal points, and the process begins anew in the opposite direction. Professionals call this “price discovery.” Founder's Journal and Trading Notes Below are a few relevant excerpts for today from A.F. Thornton’s trading journal. Check out the full notes with a paid Subscription, which also includes access to Mr. Thornton’s live charts in the Founders Trading Room. The full journal contains Mr. Thornton’s daily trading plan and reflections on his daily gains and losses. References to “the Market” below mean the S&P 500 Index. The quoted numbers are from the front month E-Mini Continuous Futures Contract (now December 2022). A few excerpts on today and what to expect tomorrow... Good Evening:Volatility is in the air again this week. For Monday alone, the options market is pricing in +/- 60 points from Friday’s close (3597.50) for a 120-point day range. For the week, the options market is pricing in +/- 130 points from Friday’s close for a 260-point week range.The Founder’s Group continued to scale into long positions between 3610 and 3685 on Thursday and Friday after Thursday’s Navigator Algorithm Buy Signal kicked in.Technically, the signal painted just above 3600 on Thursday. But as we said then, the price did not confirm the buy signal unless the market closed above 3655, and it did.From there, our job was to scale in on pullbacks, and we got plenty of that on Friday. Our stop remains a few ticks under our proprietary Algo trigger line, which also moved around quite a bit on Thursday and Friday.Thursday was a day like no other. The turn was predictable, only a few points off our projected 20-week cycle low at 3509. The actual low was 3502.Still, the magnitude of the bounce was unbelievable. A day like Thursday has occurred only three times in history, and the market gained at least 10% in the ensuing weeks each time.For our purposes, Thursday saw a rare, bullish engulfing candle and true pivot on the daily chart, further confirming the buy signal and adding to the bounce case.As you will see from the first chart above, we could predict the timing of the low using cycle algorithms and projections. When the price crossed the 20-week FLD (Future Line of Demarcation), we projected the distance from the last cycle peak to the break to predict the low. The predictions are generally accurate within a small price variance.The 20-week cycle low (3502) should be in place. However, traders might push the market down to retest it before the market can seriously bounce.It is in the eye of the beholder whether Thursday was a successful retest of the June low, negating a retest of Thursday’s low before the price rebounds. As is typical on Fridays, the market left us hanging on the ambiguous edge of resolving the issue.What I would expect now, excluding the plethora of exogenous global events which could derail any prediction, is a bounce out of the 20-week cycle trough and then an eventual resumption of the bear. The 20-week cycle will likely have bearish, left translation in its wave structure. Price targets for the 20-week are 3817.50, then 3915.50, then 4012.50. We may not make it that far, so I will be scaling out, starting at the first target, while also maintaining our trailing stops.The price should continue to the 18-month low forecast for early March 2023.Conceptually related to the 18-month cycle low, the price is also bouncing off the 200-Week Moving Average, where most oversized corrections and cyclical bear markets end (2016 and 2018 are good examples).Coincidentally, not far below 3502 lies the 4-year cycle FLD. Generally, if the market starts closing below the 4-year cycle FLD, you can measure from the all-time high to the break and project it down to forecast the ultimate low.On the first chart above, I took a theoretical break at 3502, resulting in 1306.25 points from the January market top to the break. Projecting 1306.25, down from the theoretical break at 3502, gives the price a downside target of 2195.75, very near the China Virus Crash lows in March 2020.Time-wise, that low is not due until the summer of 2024. And we have a rest stop at the 18-month cycle low in early March 2023 to keep us busy until then.Still, we have to consider that the price could get to the projected target early (like the 18-month cycle low forecast for early March), with the “time” element resolving with a retest of the March low on the 4-year low forecast for the summer of 2024. There are many examples of these variations if you study past bear markets.The point is the 4-year cycle FLD is what separates bear markets like 1929, 1973-74, 2000, and 2008 from the rest of the crowd. What kind of bear will this be? From everything I see right now, I would bet on an eventual break of the 4-year FLD and 200-week Moving Average like 2000 and 2008-2009.But let’s at least look for a rest stop at 3375 or so before the 4-year low sets down.Anyway, it is all theoretical as we have not violated the 4-Year FLD as yet. I want you to be aware of the prospects.And what we have now is a cascade of cycles nesting on each other, which is a rare occurrence, normally leading to a pause, if not an outright bounce.As I always advise, avoid the “all or nothing” thinking. Go to the Latest Stock Market Forecast in the Categories menu to your right. I wrote that macro forecast originally in January and updated it in March. Nothing has changed. We could be entering a trading range market just like the similar period in the 1970s. That would support lows here and a sideways market for a while, like the 1966-1982 market. It is not my base case, but I keep it in the back of my mind.The point is we have 600% plus gains this year because we follow the price and algorithms wherever they want to take us, and we try our best to leave our bias in the hallway before we step into the office.And need I remind you that everything I told you more than two years ago has come to pass? I said inflation would come roaring back. I told you that a “Fourth Turning” was coming, referred you to the 1997 book, told you it would be miserable, and even featured an interview with Neil Howe, the co-author of this seminal work, on these pages. I told you about the World Economic Forum and the Great Reset to Collectivism and Authoritarianism. And finally, I told you not to fear the China Virus – fear the shot.My partner thought I had lost it several years ago, and I am sure many of you felt the same. Yet, now you know I wasn’t crazy as we continue to suffer the consequences of President Orwell and all of his WEF handlers.Nothing has changed. We are in an existential battle for the freedoms and values we have taken for granted. Every conspiracy theory I have ever heard seems to be coming true. We are watching history unfold in real-time right in front of our eyes.By the way, did you know we are also invading Haiti? Look over here… You cannot make this stuff up. And what might the market do if Zelensky and Ukraine give up the fight? There is little left of the Ukraine Army (or our taxpayer funds).A.F. Thornton BluPrint’s business model for retail services is sharing the buy/cover short and sell/short signals generated by our proprietary Navigator Algorithms™ for the S&P 500 index. Subscribers can implement the signals with the SPY ETF, SPX or SPY options, S&P 500 EMini (and micro) futures, or a combination of these instruments as the context warrants. Futures and options are leveraged instruments that involve high risk, volatility, leverage, and loss. They have different characteristics with comparative advantages and disadvantages. With leveraged futures, you could lose more than your original investment. Past performance does not guarantee that you will achieve similar results, nor do we.A.F. Thornton is not a financial advisor, nor is he your financial advisor. He only expresses his opinion based on his experience. Your financial situation and experience may be different. This blog is for educational and inspirational purposes only. Your investments are solely your responsibility. You must conduct your own research.* Clients are advised to scale in on pullbacks when a closing price is significantly above the algo signal generated on that day. Click to Learn More About Navigator™ Trading Subscriptions Share with Friends and FamilyWord of mouth is crucial for growing our trading community and providing education and support for your trading decisions. Please feel free to share this with your friends and family if you find the information beneficial. Facebook Twitter Email LinkedIn
Founder's Trading Journal Interim Update -10/13/2022 Oct 14, 2022 AF Thornton 0 Comment “How about this – a spike low and rebound tomorrow? Then a retest right on the 20-week cycle and options expiration around the 21st?”A.F. Thornton – Last Paragraph Yesterday’s Blog Good Evening:Don’t you hate someone who said I told you so? It was not my most probable guess for today – but apparently, it was what the doctor ordered.Not that I made as much money as I could have. There turned out to be more profits left in the puts we cashed in yesterday, but only if we were quick to the draw this morning. And I could have entered lower on the long side even for some day trades today. I had a good pre-market trade, but that was it today. In a sense, I am haunted by not wanting to give back our incredible year-to-date gains in a wrong-headed move. I need to get over that.Besides, the Navigator Swing Buy signal was the focus of the day, and the spike low. We had been close the last few days, and it finally kicked into high gear at 3601.Then the waiting game began. We had to see if traders would accept prices above 3600. A reversal before the close could have erased the buy arrow. I have seen that happen more than once.So we set the parameter as a buy as long as the market closed above 3651, and it did.There were any number of ways to enter with a stop, etc. But we will use the close at 3681.75 as our official entry.We will buy pullbacks to the 5-day line until another sell signal presents. For now, the Founder’s Group has their stop set at 3645.50 in case we need to give the price some breathing room tomorrow. Be advised that we will change that on a dime if need be.Closes below the five-day line are a good stop proxy if you have no other strategy.We move our stop around, preferably up throughout the day, but you need a subscription for that information. For now, at least you have a general idea of what we are doing.If you have been following the Blog, there should be no surprises about this low, and there is no point in rehashing why we had been looking for it.Could it be THE low? Ollie Ollie in Come Free?Sure, it could be, but I seriously doubt it. Think of it more as taking a break at camp as we continue to repel down the mountain.And what about that retest? Or was this a retest? I will better assess that over the weekend. A good follow-through day would make the analysis moot.And anyway, the Navigator Algorithm knows, and it will tell us what to do next. We will keep it tight – using 60-minute RTH and 120-minute ETH charts rather than the daily chart to monitor the signals.Next stop? Break the downtrend line (happening in Globex already), then revisit the mean at 3740. Solid support lies at 3651, and we start running into resistance at 3770, assuming we can clear the mean at 3740.Regression to the mean is all about this: the “rubber band” principle. We just snapped back after getting too far below the mean on the daily chart.If you did nothing but run a 21-period line in just about any time frame and study it, you would find this an easier process than you might otherwise believe.That is how I start my weekend reviews. A plain candlestick daily and weekly chart with the 21-period line only – nothing else.Of course, I also want to know if a new moon is due and how Mars aligns with Mercury and Venus.Just kidding – I wanted to see if you were still paying attention.Have a great weekend – the next Blog will come on Sunday evening or Monday morning for non-subscribers.A.F. ThorntonP.S. Why would the market rally here other than short-covering? The reasons always become apparent in time. Anyway, it is much too early to draw any conclusions and the bond market still looks like a Mac truck (electric of course) ran into it. Remember – “it’s the bond market, stupid” and electric vehicles have a lot of torque.
Founder's Trading Journal Founder’s Trading Journal – 10/12/2022 Oct 13, 2022 AF Thornton 0 Comment S&P 500 Index Continuous Futures / Today’s Close – 3588.50 / -10.75 pts (-.30%) Published Wednesday Evening Navigator Swing Strategy™ Current Position: Cash/Neutral @3632.50 on 10/11/2022 Stop: Neutral Last Signal: Closes Short Position from 10/5/2022 @3769.50 for 137 points S&P 500 Index Gain/Loss from Neutral Signal: - 44 Points / - 1.20% *** S&P 500 Index Continuous Futures - On The Edge Navigator Algorithm™ Trends Hourly: Neutral Daily: Neutral Weekly: Bearish Monthly: Bearish Navigator Trading Sandboxes™ Click here to learn about Trading Sandboxes and how they work. The table below lists the granular price obstacles a trader will encounter inside the expected move ranges. The DEM and WEM help us narrow our focus for the day and week ahead. We also included a few important price levels outside the range boundaries – for the less probable occasions when the price exceeds the edges. The table reflects the key trading levels for Thursday, 10/13/2022. S&P 500 Expected Move Table of Key Price Reaction Levels To successfully navigate this data, traders need to monitor the price auction with volume profile histograms for the day and a cumulative profile aggregating the last 10-20 sessions. As price travels north or south from level to level, volume tapers off at reversal points, and the process begins anew in the opposite direction. Professionals call this “price discovery.” Founder's Journal and Trading Notes Below are a few relevant excerpts for today from A.F. Thornton’s trading journal. Check out the full notes with a paid Subscription, which also includes access to Mr. Thornton’s live charts in the Founders Trading Room. The full journal contains Mr. Thornton’s daily trading plan and reflections on his daily gains and losses. References to “the Market” below mean the S&P 500 Index. The quoted numbers are from the front month E-Mini Continuous Futures Contract (now December 2022). A few excerpts on today and what to expect tomorrow... “Up until now, the market has repriced itself in light of higher inflation and interest rates. And enough is enough – as the financial system teeters on the edge. The next repricing will be about earnings revisions – or not. The data is not sufficient yet.” A.F. Thornton – Wednesday, October 13, 2022 Good Evening:Well, I wanted to hold onto our puts/short futures positions, but my instincts told me otherwise, with 137 points of S&P 500 futures gains per contract on the table. Yes, you tie up some margin, but that is $6850 per contract in profits in four trading sessions that could evaporate if the shorts panic.The Founders Group sold them yesterday and nailed the 137 points.I could be wrong that the crowd is too negative and the institutions have too much cash here, but I am not long, either. Cash is fine for now. As I always say, pigs get fat, and hogs get slaughtered.And isn’t our job to see what everyone else sees but think about what they haven’t thought?The wholesale inflation numbers disappointed the street this morning, and the Fed minutes were hawkish. Yet the market yawned.Defense of the 200-week line at 3595 remained the ruling reason of the day.I think the market will shift attention to earnings issues now – and the jury is still out on that front.Energy and raw materials are still cushioning the indexes thanks to the Orwell Administration’s latest blunder with Saudi Arabia. Orwell has fewer and fewer friends left in the world.And then there is that October surprise? What will it be? What about midterms?And I still keep asking myself – why aren’t the indexes worse off, with all things considered? If they are not going down, they are likely to go up. Maybe the sellers are exhausted – for the moment.Recall June? A little “M” formed in the lower realm of the chart before we took another spill.Anyway, all these thoughts float through my mind in morning meditation – or is it prayer?Anything is possible tomorrow with the pre-market CPI print. That is the real point. Besides, there are a lot of shorts trapped here if the numbers are at or below consensus, and I don’t like that playground.By no means am I bullish, nor is the bear market over by a longshot. I just find that 3600-ish is not a highly predictable zone where I want to participate. And if I did participate and if a crapshoot inflation report wasn’t on the table, I would favor longs for a short-covering rally.In simple terms, I don’t enjoy getting my face ripped off in a short-covering rally – unless I am long, of course. I wish I had more conviction. The algos flirting with a buy signal on the daily chart isn’t helping my otherwise bearish nature.Oh, I almost forgot, is NATO wise to practice nuclear war games to flex for Russia? How does Putin know it isn’t a cover to take him out?And while you are looking over there, President Orwell wants to install the digital dollar, and there are rumors that the October surprise is President Orwell granting amnesty to all the illegals. Hence, they are eligible to vote in the midterms.And while we are all distracted, do you think China will allow America to arm Taiwan to the teeth, or will they blockade the shipments? You decide.How about this – a spike low and rebound tomorrow? Then a retest right on the 20-week cycle and options expiration around the 21st?Sweet Dreams Tonight!A.F. Thornton BluPrint’s business model for retail services is sharing the buy/cover short and sell/short signals generated by our proprietary Navigator Algorithms™ for the S&P 500 index. Subscribers can implement the signals with the SPY ETF, SPX or SPY options, S&P 500 EMini (and micro) futures, or a combination of these instruments as the context warrants. Futures and options are leveraged instruments that involve high risk, volatility, leverage, and loss. They have different characteristics with comparative advantages and disadvantages. With leveraged futures, you could lose more than your original investment. Past performance does not guarantee that you will achieve similar results, nor do we.A.F. Thornton is not a financial advisor, nor is he your financial advisor. He only expresses his opinion based on his experience. Your financial situation and experience may be different. This blog is for educational and inspirational purposes only. Your investments are solely your responsibility. You must conduct your own research. Click to Learn More About Navigator™ Trading Subscriptions Share with Friends and FamilyWord of mouth is crucial for growing our trading community and providing education and support for your trading decisions. Please feel free to share this with your friends and family if you find the information beneficial. 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Founder's Trading Journal Interim Update – 10/12/2022 Oct 12, 2022 AF Thornton 0 Comment Good Morning: Yesterday, the Founders Group covered their remaining short positions at 3632.50 – preferring a neutral stance going into today’s publication of the September Fed Minutes and the wholesale Inflation numbers, not to mention tomorrow’s retail inflation reports. One concern is that the 3600 level has been sticky and perhaps even supported by the Fed Plunge Protection team. At this point – it is a bit of a crapshoot trading into these reports, particularly the CPI report on Thursday. Today, the options market is pricing in a 50-point range plus or minus yesterday’s close at 3616.13. Tomorrow’s range is wider; we will report on that after today’s close. Interestingly, today’s range is not greater than the “normal” range we have been experiencing when no economic reports are due. If we bounce here, I expect behavior more like June before another leg down. It is still fine to use the 3655.25 buy stop for short positions if you remain bearish. The market had a lot of good reasons to capitulate yesterday considering European events but didn’t. We can never know the future, but when the market stops falling on bad news, a low could be closer than we think. Also, the market has tended to rally when the VIX approaches 35 lately. Inflation is already expected to be high, so it would take an appreciable miss to drive prices lower – and I don’t rule that out. I do not have strong evidence in either direction. There will be time to reposition later this week whatever the market decides to do. The Key Levels remain the same as in the previous table, adjusting slightly for moving averages. A.F. Thornto
Founder's Trading Journal Founder’s Trading Journal – 10/10/2022 Oct 10, 2022 AF Thornton 0 Comment S&P 500 Index Continuous Futures / Today’s Close – 3625.25 / -28 pts (-0.77%) Published Monday Afternoon, October 10, 2022 Navigator Swing Strategy™ Current Position: Cash/Short @3769.50 on 10/5/2022 Buy Stop: 3655.25 Last Signal: Closes Long Position from 10/3/2022 @3677.50 for gain of 90 points S&P 500 Index from Short Signal: - 161.50 Points / - 3.91% *** S&P 500 Index Continuous Futures - On The Edge Navigator Algorithm™ Trends Hourly: Bearish Daily: Bearish Weekly: Bearish Monthly: Bearish Navigator Trading Sandboxes™ Click here to learn about Trading Sandboxes and how they work. The table below lists the granular price obstacles a trader will encounter inside the expected move ranges. The DEM and WEM help us narrow our focus for the day and week ahead. We also included a few important price levels outside the range boundaries – for the less probable occasions (like yesterday) when the price exceeds the edges. To successfully navigate this data, traders need to monitor the price auction with volume profile histograms for the day and a cumulative profile aggregating the last 10-20 sessions. As price travels north or south from level to level, volume tapers off at reversal points, and the process begins anew in the opposite direction. Professionals call this “price discovery.” Founder's Journal and Trading Notes Below are a few relevant excerpts for today from A.F. Thornton’s trading journal. Check out the full notes with a paid Subscription, which also includes access to Mr. Thornton’s live charts in the Founders Trading Room. The full journal contains Mr. Thornton’s daily trading plan and reflections on his daily gains and losses. References to “the Market” below mean the S&P 500 Index. The quoted numbers are from the front month E-Mini Continuous Futures Contract (now December 2022). A few excerpts on today and what to expect tomorrow... The market caught its breath Monday, with bulls and bears evenly matched and leaving an indecision (Doji) candle on the chart with a slight index loss.The Founders’ Group has high cash positions and some puts – so it was a good day for us.Today’s market could have been worse – and the market managed to hold 3600. Mercifully, the bond market closed for Columbus Day.Buying came in 25 points above the recent low – so there is demand, even if it is primarily the Fed Plunge Protection Team. Sell them all they want – they caused this mess and deserve their mounting losses.I cannot remember such doomsday headlines – I hope they are not right. But it takes abject fear to usher in another tradable low in the current realm.Wednesday is the day – Fed Minutes and CPI are on deck. It isn’t easy to know what happens between now and then, but all the key levels are in the table and marked on the chart above.Markets don’t crash when the crowd expects them to – so we shall see what the markets deliver. With monthly options expiration on the 21st, I expect selling pressure will continue into that date. Recent hikes in gas prices will endure another high CPI reading unless they try to cook the books for the election.And I am still unsure how to gauge the mid-term elections’ impact between now and then – it may have an influence since no side is likely to be happy with the outcome. And we await the October surprise. Marshall law, anyone?Call buying has been scarce – and that remains negative. As I said last week, man cannot live by puts alone. But the WEM low at 3530 or so is supposed to catch us in a fall – at least for the week.Oh, by the way, the cradle trade is not dead, but it is starting to drip like a Weeping Willow Tree.And the 200-Week Moving Average at 3595 is also trying to act as a safety net. Price acceptance below it would be unpleasant.Note the Founders’ Group is keeping the Swing Buy Stop for our Swing Shorts at 3668.50, which still gives us a 100-point profit on each futures contract and something analogous on our puts.This kind of market confounds even the best of us. It will go up when you think it will go down, and vice versa. The bad news is good news. The good news is bad news – at least for the markets.But the trend is down until proven otherwise, and the trend is your friend.Anyway, “it is the Bond Market stupid” to steal a slightly altered phrase.More concerning – it is the U.S. Treasury market. A nuclear bomb might become somewhat attractive if the U.S. Treasury Market seizes up or goes the way of the Bank of England.Strap in – crash or no crash, we are in for a long, dark winter. When the market peaked in 1966 – it went sideways across the channel for 16 years.I have renamed the January peak in the S&P 500 Index “Bliss.” Why? Because I don’t think I will ever see anything like we have experienced the past 40 years to bring us to that high.It is not unlike when people ask me how I knew the 40-year bull market in bonds had ended. Simple, when interest rates hit “0,” I thought the bottom in rates was close at hand.Will it be the same for stocks? I sure hope not.A.F. Thornton BluPrint’s business model for retail services is sharing the buy/cover short and sell/short signals generated by our proprietary Navigator Algorithms™ for the S&P 500 index. Subscribers can implement the signals with the SPY ETF, SPX or SPY options, S&P 500 EMini (and micro) futures, or a combination of these instruments as the context warrants. Futures and options are leveraged instruments that involve high risk, volatility, leverage, and loss. They have different characteristics with comparative advantages and disadvantages. With leveraged futures, you could lose more than your original investment. Past performance does not guarantee that you will achieve similar results, nor do we.A.F. Thornton is not a financial advisor, nor is he your financial advisor. He only expresses his opinion based on his experience. Your financial situation and experience may be different. This blog is for educational and inspirational purposes only. Your investments are solely your responsibility. You must conduct your own research. Click to Learn More About Navigator™ Trading Subscriptions Share with Friends and FamilyWord of mouth is crucial for growing our trading community and providing education and support for your trading decisions. Please feel free to share this with your friends and family if you find the information beneficial. Facebook Twitter Email LinkedIn
Founder's Trading Journal Founder’s Trading Journal – 10/10/2022 Oct 10, 2022 AF Thornton 0 Comment S&P 500 Index Continuous Futures / Friday’s Close – 3639.66/ -103.50 pts (-2.76%) Originally Published in the Wee Morning Hours of Monday Morning Navigator Swing Strategy™ Current Position: Cash/Short @3769.50 on 10/5/2022 Buy Stop: 3677.50 Last Signal: Closes Long Position from 10/3/2022 @3677.50 for 94 points S&P 500 Index Gain/Loss from Latest Signal: - 129.84 Points / - 3.44% *** S&P 500 Index Futures - Daily Candles - Navigator Algorithm with Navigator Algo Panel Readout Navigator Algorithm™ Trends Hourly: Bearish Daily: Bearish Weekly: Bearish Monthly: Bearish Navigator Trading Sandboxes™ Click here to learn about Trading Sandboxes and how they work. The table below lists the granular price obstacles a trader will encounter inside the expected move ranges. The DEM and WEM help us narrow our focus for the day and week ahead. We also included a few important price levels outside the range boundaries – for the less probable occasions (like yesterday) when the price exceeds the edges. S&P 500 Expected Move Table of Key Price Reaction Levels To successfully navigate this data, traders need to monitor the price auction with volume profile histograms for the day and a cumulative profile aggregating the last 10-20 sessions. As price travels north or south from level to level, volume tapers off at reversal points, and the process begins anew in the opposite direction. Professionals call this “price discovery.” Founder's Journal and Trading Notes Below are a few relevant excerpts for today from A.F. Thornton’s trading journal. Check out the full notes with a paid Subscription, which also includes access to Mr. Thornton’s live charts in the Founders Trading Room. The full journal contains Mr. Thornton’s daily trading plan and reflections on his daily gains and losses. References to “the Market” below mean the S&P 500 Index. The quoted numbers are from the front month E-Mini Continuous Futures Contract (now December 2022). A few excerpts on today and what to expect tomorrow... Today is a semi-holiday – Columbus Day – with the Bond Market Closed. So it will be a light day for us today.We call it the “Cradle Trade.” The market launches a rally and then returns to the Algo Trigger Line. In a healthy market, it would be touch and up from there.And a cradle is what it looks like in Globex. Traders pushed the market below Friday’s low and brought it back nearly to Friday’s half-back on the Candle. Slightly bullish, maybe?And for Today’s Blue Light Special, that pesky bond market and the banks are closed for Columbus Day. Bankers never met even a pseudo-holiday they didn’t like.But we still have the CPI and PPI numbers on Wednesday and Thursday, and bank earnings will get served up soon.Global events continue to haunt us as well.Let’s see how it goes in our 250-point range forecast for the week ahead.Don’t forget the air pocket below 3600. The next significant volume spike (support) is down at 3350.A.F. Thornton BluPrint’s business model for retail services is sharing the buy/cover short and sell/short signals generated by our proprietary Navigator Algorithms™ for the S&P 500 index. Subscribers can implement the signals with the SPY ETF, SPX or SPY options, S&P 500 EMini (and micro) futures, or a combination of these instruments as the context warrants. Futures and options are leveraged instruments that involve high risk, volatility, leverage, and loss. They have different characteristics with comparative advantages and disadvantages. With leveraged futures, you could lose more than your original investment. Past performance does not guarantee that you will achieve similar results, nor do we.A.F. Thornton is not a financial advisor, nor is he your financial advisor. He only expresses his opinion based on his experience. Your financial situation and experience may be different. This blog is for educational and inspirational purposes only. Your investments are solely your responsibility. You must conduct your own research. Click to Learn More About Navigator™ Trading Subscriptions Share with Friends and FamilyWord of mouth is crucial for growing our trading community and providing education and support for your trading decisions. Please feel free to share this with your friends and family if you find the information beneficial. Facebook Twitter Email LinkedIn
Founder's Trading Journal Interim Alert – 10/7/2022 Oct 7, 2022 AF Thornton 0 Comment Good Morning:A stronger-than-expected September Employment Report has dashed the expectations of the Fed Pivot Crowd, almost ensuring another 0.75% rate increase at the next Fed meeting.So the next major report comes in a week, with September CPI (inflation).At this writing, the market is not taking the report well and is trading below the key five-day line.While the possibility of one more leg higher is still on the table, or something more complex with fits and starts, as we saw in late June, the market is on a foundation of shifting sands rather than the solid low bantered about in the media.Our swing accounts are either in cash or short for now per Monday’s sell signal, so stay tuned. Let’s see what happens in the regular session.If any changes to strategy are appropriate, the Founders’ Group will indicate as much.Have a great weekend.A.F. Thornton
Founder's Trading Journal Important Alert – 10/6/2022 Oct 6, 2022 AF Thornton 0 Comment We are on the precipice – and the bottom of the cliff may still be a long way down from here. This is an important but short video on the stock market’s current location, next moves, and timing of the foreseeable cyclical lows. A.F. Thornton