Founder's Trading Journal

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Click the chart above to expand. The buy and sell levels in the weekly chart above dictate whether the market is bull or bear for trading the lower time frames. The Navigator I buy and sell signals are the actual buy and sell signals for long-term investors who desire fewer trades. The Nav I signals mark a slower swing signal strategy than our main Navigator Swing Strategy. Also, note the Head and Shoulders reversal pattern on the chart, likely marking the bottom of the 18-month cycle on October 13th. Head and Shoulders patterns market cycle lows and highs in all time frames.

Good Morning:

Yesterday’s price action ended in a bull/bear draw, closing smack dab in the middle of the candle.
It was a volatile day with a 108-point range.
Yesterday’s close also landed in the middle of a three-week triangle consolidation between 4078.75 and 4186.50.
The levels quoted are now the current breakout levels.
The hat tip still favors the bulls without a full market meltdown in the face of another lousy (and understated) CPI report.
Moreover, Hurst cycles are often muted, coming off a bear market low.
Perhaps the current consolidation is the 20-week cycle correction – or the correction may be running late.
Our best judgment remains that the price will tag our original target around 4325-4345 before a meaningful correction ensues.
Markets do fall short of achieving the full octave from time to time before a meaningful correction, and there is a laundry list of negatives out there to drive the market lower.
As always, we will let the price and algorithms guide us.
Our target remains between 4325 and 4345. If the market cannot achieve the levels, the price will roll over into the 20-week correction sooner rather than later.
You now have the breakout levels to watch.

A.F. Thornton

Founder's Trading Journal

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Good Morning:

It would seem that World War III is well underway. I am now working on an opus of thoughts, but I will wait. Plus, I am looking for clay tablets to write it down for posterity.
For now, the inflation report comes out in about 16 minutes. I am so excited if it comes out a few ticks above or below the consensus at 6.2%! You can generally double the number, as it is always understated by half. And this is the time of year they tweak the formula anyway, so I don’t find it easy to interpret.
If I had to call the next few days, it would be a rally on the report today to suck the unwary into a top, and then the market will dump them all into early March. Yes, that is the bullish case. And there are too many shorts not to have the market run them into a panic rally after the number is released.
Mercifully, another hour will pass before the NYSE Open.
Anyway, I should not guess as I now have a cadre of algorithms to guide me. The algorithms have never been wrong. My “gut-feeling” calls generally come through half the time.
We will see how it goes today, and I will drop you a line here later.
As long as the 60-Year Cycle has an 80% or greater correlation (87% at this writing), I will continue to use it as our guide. It also shows a dip into early March, but not starting until next week.
I am in the Trading Room for the first few hours today.

A.F. Thornton

Founder's Trading Journal

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Good Morning:

I will avoid the usual rant as much as possible this morning, but…
UFOs spotted above major cities over the weekend? Five continents, including China?
When was the last time the U.S. shot down five “objects” over our country? Wag the Dog?
Welcome Project Blue Beam. Project Blue Beam is a “conspiracy theory” that supposes that the U.S., through NASA and in concert with like-minded world governments , stages a fake alien invasion with laser holograms and balloons (think Orson Welles and War of the Worlds) to unite the world into accepting the New World Order and world government vis a vis Davos and the World Economic Forum. Klaus Schwab (white kitty in hand) would be our new leader!
Now, I would not believe in conspiracy theories if they would stop coming true. And it is factually true that our technology is sophisticated enough to trigger enemy radar while projecting holograms of fleets of planes ready to attack them. The Globalist Cabal can even project a hologram of Angels and the Second Coming of Jesus Christ in the sky if they so desire.
Why are laser beams all of a sudden coming down into Hawaii from satellites? Are there satellites that are hologram projectors?
You decide, but the cabal will continue to hit us with waves of fear mongering until we submit to their rule.
And how will we all die? It will be the “Boy Who Cried Wolf” syndrome. Something real will come along, and nobody will believe the government. They have lost all credibility.
I would love to be a fly on the wall in one of the rooms where these evil, chicken-shit bastards make their plans.
Either we take out the Globalist Cabal or they will take us out or enslave us. They want few humans and more robots. We are “Useless Eaters” in their twisted view of the world. I wish it weren’t so.

Meanwhile, back at the stock market, we had the expected mean reversion last week, with the market bouncing off the 21-day line.
Price spun a rejection tail off the line Friday and has done the same overnight.
Notably, overnight traders could not reach Friday’s low and took out Friday’s high. Thus far, this is bullish behavior as we approach the CPI inflation report tomorrow before the NYSE Open.
Also, our forecasting algorithms booked Friday and today as reversal dates.
That would certainly be consistent with the fact we are at the lower line of the tight pullback bull channel on the daily chart.
Also, the rally to the August 2022 high does not seem complete. We expected the market to rally through the second or third week of February to the 360^ mark at the August high before an intermediate correction into early March.
And though the mean reversion seems a light pullback, it tagged the 20-week FLD and bounced, indicating that the bull is strong enough to dampen Hurst Cycle Wave amplitudes.
The bears have their arguments but cannot seem to hold the tape in the face of such strong technicals.
So, naturally, price comes into tomorrow’s inflation report at an inflection point.
We will see if today’s price action sheds any more light on the subject, but it isn’t very likely.
Closes above the 5-day EMA will cause me to turn bullish, and closes below the mean should trigger us to be bearish.
This has been a strong rally, and any doubts should favor a bullish outcome.
Meanwhile, the Navigator Algorithms went to cash near the recent high of 4208.50 and are now neutral.
I will be in the Trading Room tomorrow and Thursday this week.

A.F. Thornton

Founder's Trading Journal

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Good Morning:

The market rolled over yesterday into what could develop into the 20-week cycle correction we have been anticipating.
The rollover was confirmed by a breakout in the S&P 500’s mirrored cousin, the VIX Volatility Index. The market has consistently put in an intermediate top over the years on breakouts from the current level. This is important because we are still in a bear market until proven otherwise.
Recall I noted the sentiment indicators were overdone on Monday, and I suggested picking up some VIX calls as they were dirt cheap.
For now, the market looks headed to test the daily chart mean and support around 4050.
Normally, we should see a bounce off the mean. If we don’t, that would be doubly bearish.
And since a pivot from the mean would only be a touch of the lower, tight bull channel on the daily chart, it could keep bulls and bears guessing as to whether the bull channel will progress to the August high before the market rolls over in earnest.
The bottom line is that we either sell rallies or buy dips. Right now, I favor the former over the latter.
The Navigator I and II algorithms applied to the daily chart remain in sell signals from 2/2.

And don’t forget that our newest indicator above (as yet unnamed) identified strong magnetic and gravity field influence on February 3rd, which was the micro double top and peak on the daily chart.
The next (and very significant) influence comes on 2/23.

Stay tuned, and have a terrific weekend!

A.F. Thornton

Founder's Trading Journal

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Good Morning:

I will be in the Trading Room this morning for the first few hours.
The market (S&P 500 Futures) will open at the top of the recent trading range.
Balance Rules are on the table. And it is a wide, 100-point range from 4100 to 4200, forming a triangle consolidation and marking upper and lower major resistance and support.
We expected the consolidation, as the indexes were parabolic at our exit last Thursday (around the 4190 level) and the 60-Year Master Cycle showed a small downturn.
The bulls want to reach out to the August high at 4327.50 to complete a full, octave wave from the October 13, 2022 low.
Even though we called the October 13th low, I am still amazed that the market has recovered this far. As I mentioned on these pages when I was putting together my outlook for 2023, I could not believe what I was seeing due to the 60-Year Master Cycle forecast.
Well, here we sit with the proof in the pudding. Thus far, the market is following the 60-year cycle forecast with a correlation of 86%. While crowd psychology is the most bearish I have seen in a log time – it didn’t stop us from following the forecast as the stock market climbed the wall of worry.
As I have often stated, to be successful in this business I subscribe to the axiom that time is more important than price. We always look back 10, 20, 30, 60, and 100-years for guidance and analogous chart patterns. I also build a compression forecast combining all of the relevant cycles together to create a line forecast.
We also look back 15 and 45-years if the cycle fits. For example, the NASDAQ is following the 45-Year Master Cycle (the NASDAQ hasn’t yet been around for 60-years).
But I also mentioned in early January that price would eventually find a fork in the cycle road. We are rapidly approaching that fork.
There are two panic cycles in our cycle DNA, 1903 at the 120-year point and 2008 at the 15-year point:

The 120-year cycle is two 60-year cycles ago. 1902 has analogies to 2022. And sometimes, the 60-year cycle will invert and follow one of its relatives like 1903. This is a worst case forecast, and I am not expecting it, but I put it on the table lest we become complacent. The 1903 Panic peaked in mid-February of 1903 as could be happening now.

In the case of the 15-year cycle, the 2008 Panic Cycle started the year in a downtrend, rallied into February, corrected into early March, then put in a slightly higher peak in May before rolling over for another year.
Again, I am not expecting a panic similar to 1903 or 2008, but I keep these outcomes in the back of my mind.
For quick review, here is the raw Master 60-Year Cycle we have been following for 2023.

The 60 and 20-year cycles are normally the most important for forecasting, and both of the cycles agree to higher prices after an early March trough.

Back to our current market, since breakouts fail about 80% of the time, it is not easy to work these ranges.
The 60-Year Master Cycle, if aligned perfectly, would call for a peak on 2/18, with the 20-week cycle correcting into March 3. Correlation has been running about 86% – but it is rare to catch the turns perfectly. We are on alert a few days before and after.
For other reasons too numerous to outline this morning, but particularly the 54-month Hurst (Presidential Election Cycle), I am expecting the market to peak in May and roll over again, for a more sideways, range-bound market for 2023.

A.F. Thornton

Founder's Trading Journal

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Good Morning:

Today is a good day to be in the Trading Room as I will demonstrate the Navigator II Algorithm and how it compliments the Navigator I Algorithm,
I will be on the mic from the NYSE open. I cannot type as fast as I can talk, so don’t expect a lot of text updates.
Yesterday was another whiplash day with the Meme crowd hammering the Dealers with Zero Day to Expiration options.
I will develop an update on how these options are influencing volatility soon, but accept for now that intraday volatility increases bar ranges considerably.
We now have two worlds in options analyses. We have the old world looking at longer-term options. Our analysis still helps guide us in this macro perspective.
But we are also developing tools to help us understand and predict the new intraday world and take advantage of it.
Yesterday saw averages of 20-point bars on the S&P Futures intraday. And there were quick back-and-forth 100-point swings (100 points is $5000 on one Emini contract).
Whether experienced or not – the price action is hard to read, and traders can lose a lot of money.
For now, the market could be putting in a lower high major trend reversal if the market cannot move above yesterday’s high.
It could also continue consolidating between 4100 and 4200 before making a move.
If the market can move above yesterday’s high at 4188, then last Thursday’s high at 4208, the market is likely to go up to the August high of 4327.50 before finally rolling into the 20-week cycle correction.
Otherwise, the correction could get underway at any time.
The market remains in overbought territory, but the trend is very strong.

A.F. Thornton

Founder's Trading Journal

Balloons, Buffoons, and a Pullback

Feb 7, 2023 AF Thornton 0 Comment

Good Morning:

Indulge me in a few more paragraphs on the most serious nuclear risk our Country just escaped.
Someone needs to let the Orwell regime know that “it’s Trump’s fault” is complete bullshit and doesn’t fly anymore, no pun intended.
After every relevant Trump official denied any Chinese balloons flew over our Country during Trump’s watch, including the haters, the lie changed as it often does with these despicable communists running our nation.
The new lie was that General “Mad Dog” Mattis decided not to tell Trump about the balloons because Trump might overreact.
This flies (no pun intended) in the face of common sense. First, how did General Mattis earn the nickname “Mad Dog?” I don’t think he got the nickname because he is a wussy. And he would not have taken kindly to China breaching our sovereignty. And if he really had withheld the information from President Trump, it would be treason punishable by death.
Second, how can anyone possibly overreact to China’s dangerous and provocative violation of our airspace with a balloon carrying a payload that could take out every electronic instrument in the Country that did not have a Faraday Cage protecting it?
Anyway, the Deep State forgot to send Mad Dog the memo because now even Mattis says that the Orwell Administration is lying.
But the distraction works no matter what, and some people will believe it. The proof it works is that I am even discussing it on these pages.
This is a moment when you must keep your eye on the ball. Do not enter this stock market without a stop.
The bottom line is that China just flipped us the bird and humiliated the U.S. on the world stage. The Orwell administration and their Globalist backers have destroyed our country in two years. They have to go – no matter what it takes – or we will be speaking Mandarin.
China showed the world that it is better to align with them than the fat, lazy, feckless, woke Americans – obsessed with nonsense. Folks, President Biden and his cabal are going to get us all killed! I don’t know about you, but I had no bunker to hide in while the balloon traversed our Country. I’ll bet the cabal were comfortably nestled in their bunkers until the risk passed!

Meanwhile, we are back to cash, having sold our remaining runner at yesterday’s close.
No matter what cycle format we choose, Gann or Hurst, we are in the zone for a peak. If we begin the nominal 20-week Hurst cycle, the market will take out the 20 and 40-day VTL Trendlines in the chart immediately above.
4000 is likely to be tested if the price falls through the trendlines. The level is likely to be a key dividing line in the future.
We will be in the Trading Room on Wednesday and Thursday. Today is a difficult session to day-trade due to Fed Chairman Powell speaking later this morning. He will likely walk back the dovish interpretation of his Press Conference last week.
Be aware of the risk of a short squeeze to take the market higher if Chairman Powell remains doveish. Also, watch for the head fake. The ultimate target for this rally leg from October remains the August 2022 high at 4325 if the 20-week Hurst cycle does not intervene. This could happen in a blow-off of sorts up to that level.
Look for a True Gap down at the open and apply Gap Rules.

A.F. Thornton

Founder's Trading Journal

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Good Morning:

In addition to the bears finally realizing that we are in a strong bull market leg too late, three confirmed Chinese spy balloon ships flew over the U.S. and Latin America over the weekend.
There are unconfirmed reports that Chinese balloons also flew over Canada and Alaska.
And no matter the fake news, more than 20 Trump officials and Democrats confirmed that there were never any Chinese balloon flights during the Trump years. Common sense is all you need to see through this Orwell Administration “disinformation.”
In addition to failing to protect this Country, the Orwell administration lies through their teeth at every turn. Note the false and unbelievably overstated jobs report Friday. They did the same thing last year and quietly revised the report downward by 2 million jobs the following March. Everything is a lie or cover-up. The Orwell administration is beyond incompetent. They are a despicable group of misguided, communist, authoritarian crooks.
I am convinced that this Orwell Coup is purposely trying to destroy this great Country to invoke their New World Order to be run from the World Economic Forum (“WEF”) in Davos. The U.S. must go, Russia must go, and China must g,o so there is no remaining opposition to the WEF scheme. All WEF leader Klaus Schwab needs is a white kitty to be the villain in the next Bond movie.
Speaking of movies, in addition to “Red Dawn,” watch or rewatch “Don’t Look U.”. The latter film truly captures the moment.
Remember that the Chinese balloons are designed to deploy nuclear EMP devices to take out our power grid. Only by God’s grace (and China’s) do we still have a country this morning. We are beyond vulnerable with President Orwell and his puppeteers in charge.
Our way of life, and many lives, could have easily ended over the weekend. Millions of our fellow citizens could be freezing right now (and eventually starving) with no power. As we returned to the dark ages, not a single brick would have been damaged by an EMP device. Chinese soldiers would simply be parachuting in to take us over.
China could easily deploy more soldiers than our total population, even with our millions of uncounted illegals. By the way, Chinese soldiers aren’t girlie men like Generals Austin and Millie. Nor did their soldiers take the Clot Shot as ours did. China must laugh while the greatest Country ever known to planet earth flails in the wind due to the 2020 Globalist Coup.
In my lifetime, I have never felt so unsafe in my own Country. Nor have I ever seen our Country deteriorate so fast in such a short period.
By the way, our Country deploys balloons in our skies to spy on U.S. citizens.
They waited to shoot one of the balloons down over the ocean for two reasons. First, they wanted to be sure that the balloon didn’t belong to NSA. Second, if it did belong to China, they did not know whether our military would inadvertently deploy a Chinese nuke.
Now, it is conceivable that China paid the Orwell family to allow them to spy on us. I have an email out to Hunter Orwell to confirm this. But I got an automated reply to send money to a Cayman Islands bank.
Rumor has it that when they recover the balloon from the ocean, it will have a fortune cookie as its payload. It will probably say something like “the strength of a nation derives from the integrity of the home” Confucious.
Anyway, this is more about warning the U.S. as China prepares to take Taiwan than it is what they paid the Orwell family to do.
Because we have deployed similar balloons over the Country to spy on U.S. citizens, the Chinese thought their balloons would blend in.
Anyway, folks, something big is coming, and it won’t be good. Be prepared. This administration and its globalist, authoritarian puppeteers are taking us into World War III. They all have bunkers, do you?
Meanwhile, back at the stock market, we got the turn Friday predicted by the Navigator Algorithm augmented by a very sophisticated weather algorithm. There is a high correlation between the weather math and market turns. There may be an independent cause that affects both. Realistically, however, they are driven by similar cycles. The next date is 2/23.
Additionally, the daily chart is in a parabolic rising wedge. The angle is unsustainable.
So the market is likely to continue dipping or move sideways.
Also, sentiment has shifted to extreme bullishness, and the dumb money index is hitting records.
One possibility is that we start the dip into the 20-week cycle low, though it seems a bit early for a bullish leg this strong.
And keep in mind that it has paid to buy with the machines on the daily chart at the five-day line (4126.25 on the futures). A good strategy is to buy on or slightly below the line with a reasonable stop until it stops working.
But the full octave takes us to the August high near 4329. Right now, the price is half an octave.
My best guess is that we move sideways or correct a few days before attempting another run.
The Founders’ Group offloaded most of our position Thursday, and we hold a runner, with a stop on a close below the five-day line.
Depending on conditions, we will look to add to the position on visits to the five-day line.

These are dark and dangerous days, my friends. Make sure you have a Plan B.

A.F. Thornton

Founder's Trading Journal

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Good Morning:

Are you kidding me? WTF is a Chinese spy balloon doing floating over Malmstrom Air Force base where 1/3 of our ICBM silos sit?
The Orwell Regime and U.S. Military won’t shoot it down because “debris” might scatter and hurt someone in this desolate area. Really?
What are the possibilities? Maybe President Orwell and the globalist Congress have already sold us to the CCP – and the merger comes later this year.
Maybe the U.S. military is afraid to shoot down the Chinese balloon because it holds a nuke that might take out our nukes – the perfect “First Strike” strategy. Maybe the balloon will drop its payload anyway with the push of a Chinese button.
If it is Chinese, did they launch it from one of the thousands of acres of U.S. Farmland they own?
Think how brilliant that would be. They float a few nukes quietly on weather balloons, ready to take out our main ICBM arsenals at a moment’s notice. It must be hard to smuggle nukes across our secure Southern Border.
Ask yourself, how many Americans will die because of the Orwell Regime’s woke joke policies?
You cannot make this up – the Chinese may have already successfully placed something over 1/3 of our nuclear arsenal – quiet as a mouse! This reminds me of the low-tech Al Qaida strategy of turning passenger jets into missiles.
Maybe President Orwell has agreed to let the Chinese monitor our arsenal to prevent any “misunderstandings.”
Meanwhile, China appears ready to seize Taiwan – or so we are told.
Given that nearly everything our current regime tells us is a lie, maybe the balloon isn’t even Chinese.
Remember, we are supposed to hate China and Russia. Recall that the two countries do not like nanny trannies or sexualizing their children as we do. Russia even stands firm on traditional values like family and church, showing what a terrible country they have become.
Add this latest balloon crisis to all the other acts of sabotage in this country and worldwide. Just yesterday, LAX had a 45-minute power outage. Another chicken farm burned to the ground in Connecticut a week ago. Every plane in the U.S. was grounded for a few hours the week before that. The same thing happened in Canada and the Philippines on different dates.
Are our enemies (not the ones in Washington but outside the country) getting ready to invade us? It is always instructive to watch the movie “Red Dawn.”
The bottom line is that something is brewing that won’t be good for the American People. The Orwell Regime and their globalist cabal are playing with fire.
With the Fed Meeting now behind us, where are we, and what is next?
The market climbed the wall of worry from the October low. It has moved as far as a “half segment” (bright green, angled lines) to the 50% retracement of the bear market. Cyan, angled lines mark the full segments.
The correlation to the 60-year master cycle continues to be greater than 85%. I tend to favor the cycle until proven otherwise. The possibility of an inversion or correlation to 2003 or even 1903 is still possible but seems less likely now, given the bullish behavior of the markets coming into February.
At the moment, however, the market is a bit ahead of itself. The Weekly Expected Move high is 4153, and the market has exceeded the level materially. As today is the weekly expiration day, the market is expected to visit 4153 as Market Makers, and Dealers look to avoid losses and square their books. The line has already been tagged in Globex overnight.
Sometimes, the market will dance around the level for most of the day. MMs and Dealers want to close below 4153. And they get their way 70% of the time.
On a curious note, I have been experimenting with some weather algorithms applied to the markets. These algorithms predict periods of heavy magnetic fields often caused by solar flares and other cyclical phenomena. The idea comes from research conducted by Larry Berg over the past 45 years.
When combined with BluPrint’s core daily algorithm, the results this year are stunning. I marked the turns from the lower graph above with thumbs up and down symbols on the S&P 500 Futures chart above. Today is one of those turns, so we will see what happens.
The chart only predicts a turn/reversal from the prior direction coming into the date when the bar touches or exceeds the horizontal line.
The “M” turn discussed Tuesday can still resolve the nominal 20-week cycle. Still, we may alternatively get a sell-off for a few days contained by the 80-day FLD (cyan line marked on the first chart above. Then the market could move up to complete the cyan line segment and measure move before correcting for a few weeks into mid-March.
Price segments as potential measured moves can accurately project prices close to the penny.

Stay tuned and alert. Have a great weekend, and I will be in the trading room Tuesday and Thursday next week.

A.F. Thornton

Founder's Trading Journal

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Good Morning:

I often complain about the Leprechauns because they always try to steal my pot of gold. Fortunately, they only bother the Irish, kind of a spiritual rule.
Yesterday was no exception. We rolled back into a Navigator Swing buy signal at 4062.50 on Tuesday, but I wanted to wait to execute the signal until the Fed announced its rate decision yesterday (Wednesday).
So what do I do? I wait around, enjoying a leisurely morning yawning until 2:00 pm EST.
Right as the clock approaches the zero hour, in come the Leprechauns. I can almost feel their mischievous little plots as they unfold. Anything to distract me so they can steal my gold.
First, my phone rings, and it is the wife. But she cannot hear me. When she calls, I must answer, or she worries. I start diagnosing the problem. I reboot my phone. Nothing works.
Meanwhile, it was 1:59. I dropped the phone project and ran to my computer. Now, my computer is running at 5 miles per hour because the Trading Room is dragging the speed as I am on a laptop at my temporary location in New York. My wife is attending to her mother, who is experiencing declining health.
My goal was to buy around the 5-EMA, and Navigator buy signal at 4062.50. I go to execute a few futures contracts, but the trading line is down, likely jammed with others trading the Fed.
At this point, it is Leprechauns 2, AF Thornton 0.
So I punt with some SPY (at the money) calls at the ES 4059 level.
Now, a brief lesson in options. A plain Call will give you some participation in an up move, but a volatility collapse matching the up move can mute the return. It is called a volatility crush in industry parlance. A preferable trade is to use a call spread to neutralize the volatility component – but there is no time to calculate one as the clock is ticking and the futures line is still jammed.
The market was moving fast. Even if I had done a spread, likely, I would not have set the top side high enough. Anyway, I was set with the straight calls.
Having beaten the Leprechauns for once, I set some stop alarms (you cannot set actual stops on options). I satisfied myself that the Founders Group was in position and then went to grab a cup of coffee and plot my revenge on the Leprechauns.
I came back about 45 minutes later and was pleased that the stop alarms had not sounded, but I was shocked to find the S&P 500 nearly 100 points higher in 45 minutes. I could not believe the index had moved so far so fast.
So I sold off all but a single Call for a runner, which the Founders’ Group maintains for the Navigator Swing Buy.
I don’t recall such a swift advance in such a short period in my long career.
Unless this move turns out to be a spike and small pullback bull channel, the market might be ahead of itself, and the “M” pattern discussed Tuesday is still valid up to the 4180 spike high on 12/13 – reflected on the Emini futures contract. But the cash index closed a bull body above the 12/13 high. So there is some conflict between the two indexes.
And what can be said about the Fed decision and such a spike move? The Fed says it will continue to raise rates, but Fed Chair Powell took a dovish tone in the press conference. Bulls and bears both had something to celebrate.
But as I have been saying over the past few weeks and even though it was not my preferred analysis, the market goes up when it wants to and the weight of the short-term evidence favored market gains on the Fed announcement. And though it was a quick turnaround, the Navigator Algorithm had flashed a buy signal the day before.
The cycles remain solidly in place, and the market will soon catch up to them. But as in October, the “crash” and “depression” called for by the crowd seem very unlikely for now.
As to these sudden moves and spikes, we need to consider them from now on and try our best not to be on the other side. These are Gamma squeezes caused by the DTE crowd.
The DTE crowd, the same crowd that brought us MEME stocks like Gamestop and AMC, buys and sells options that expire the same or the next day. They try (and are often successful) in driving dealers (who take the other side of the trade) into panic buying or selling to keep their portfolio Deltas neutral.
The DTE strategy causes considerable volatility on a day-to-day basis. But it is not going away soon.
As long as the Navigator Swing Buy signal is in gear, we look to add positions on the 5-day line with a stop and reduce positions when the market gets too far away (two standard deviations) from the line.

A.F. Thornton

Category Founder’s Trading Journal

Balloons, Buffoons, and a Pullback

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