Founder's Trading Journal Founder’s Afternoon Notes – 3/2/2022 by AF Thornton Mar 2, 2022 0 Comment My dominant thought tonight is where is this war headed? Who wants it? Who wins and loses? How will it affect the markets? Is my bunker stocked and ready?My head has to be in the sand not to realize that Russia invading Ukraine challenges the current global order. Nothing will be the same – the Fourth Turning. First, a Pandemic. Now, war? How soon will the grid go down in a cyberattack? Will we be ready?The sanctions will have unintended consequences. The U.S. Dollar could be over as the Global Reserve Currency when it is used as a weapon.China and Mexico nixed any Russian sanctions. I get China, they will go after Taiwan. But Mexico? What gives?Up until a few days ago, we were fighting over Covid mandates. Actually, we were ready to kill each other over them. Parents were designated domestic terrorists by the Biden regime. Canada was implementing Marshall law, jailing protesters, and seizing assets. Pelosi ordered the Capital fenced again in D.C. as an American trucker convoy was on its way.What do the Truckers think now? When they left a few days ago – mandates were a fight to the finish. The truckers haven’t even reached their destination and “poof” the mandates are gone. No masks, no mandatory shots, no vaccine passports, and no explanation. Things that make you go hmmm?I hope all that took the vaccine survive. I pray for them. The vaccines are the worst crime against humanity of my lifetime.No worries, look over here, not over there. Is World War III the new Covid? What new “emergency” powers await us. Will there even be an election in November? Big tech is already censoring any views on the Russia – Ukraine conflict that counter the official Biden regime narrative. Was Covid the dress rehearsal for the new censorship and authoritarianism?We are fighting for Democracy in Ukraine? How about here?And then there was the State of the Union speech…Joe stole a line from Trump – Buy American! Why don’t we start with oil, Joe? Crude Oil Futures - $114 and Rising And wheat? Wheat Futures Rising Parabolically The hell with the stock market, I am running the algos on Wheat and Oil – may need a few adjustments.By the way, does our dependence on foreign food and oil threaten our national security?Did you take your medication today, Joe? I know I am going to need a lot of medication to get through this. Did you know that 20% of the U.S. Population takes anti-depressants? That is double the rate from 10-years ago. If you can’t beat them… Speaker Pelosi’s happy dance when Biden mentioned the burn pits in Ukraine says it all. Truly, you cannot make this stuff up. Hopefully, her Geriatric Doctor saw the clip and adjusted her medication. Maybe the fringe right is correct – are they all Satan worshippers? Happy dance on the mention of Ukraine burn pits? It is not inconceivable. After all, every other conspiracy theory of the last 20 years has come true. Maybe I need to see my Geriatric Doctor… It made me wonder how they choreographed the whole production from a nursing home anyway. Once again, I have to ask where is all of this headed? Are these creepy people really in charge of our safety? Our future? I am terrified. S&P 500 Index Continuous Futures Daily Charts - Key Levels and Trading Ranges The S&P 500 is finishing its fourth day of a trading range, principally bounded by the Weekly Expected Move on the lower boundary, and the 21-day line on the upper boundary.Whichever way it breaks, double the range for your targets. Breakouts are tough because there are so many fake-outs. Keep Balance Rules in mind.Did you know that every candle or bar is a trading range? Once you learn that, it is a game-changer. The open, high, low, and close on each bar gives you an immediate sentiment picture of the market in any time frame.That is why I plot last month, last week, yesterday, and the overnight high and low on my charts. I also plot the opening of each new time frame.The open tells me when the monthly, weekly, daily, or overnight bar turns red or green (bull or bear).These levels become inflection points; support or resistance as each price level is encountered or overtaken.For example, traders will first take the market towards the overnight high or low and test it on any given day.Let’s say the market tests and pierces up and through the overnight high. Then traders will test yesterday’s high. Other resistance levels may be relevant in between as we saw today. Traders will keep going until they get a reversal or the market stalls at one of the levels.All of this works the same in reverse.Pay attention to the levels I discuss in the notes each morning. They work. S&P 500 Index Continuous Futures 5-Minute Chart - At Resistance Using the chart immediately above, here are the conquered levels today:The 5-day line, also the Navigator Algo trigger,The overnight high and secondary downtrend line,The first resistance level from the morning outlook, also the monthly open that determines whether March will be a bull or bear bar,Today’s implied high,The second resistance level from the morning outlook, also the Volatility Trigger, andThe previous week and yesterday’s high, also an important gamma level where the market stalled.Today saw a lot of short-covering, so we did not see the market stall too much until #6. That is where I had identified the rising wedge. But note the hesitation at each level.So that is how it works, point to point until it stalls or reverses. Clusters of key levels provide more support or resistance.Of course, a vital trading principle is that conquered resistance becomes support and vice versa.So our toe is back in the water on both the Leveraged and Non-Leveraged swing strategies. We have good positioning and set the stops. The stops are slightly below today’s halfback, but I might move them up if we get a look above and fail per Balance Rules.We will be applying Balance Rules in the morning – depending on the overnight action.I don’t like to repeat myself, so read all the notes today for strategy and buy/sell details.There is no material change from Sunday’s outlook. We have overtaken both the 5-day line and the Algo Trigger, net positives. The 2/24 low still looks secure. But the reality is that we moved from the bottom to the top of the four-day range. My best judgment is that the range is a consolidation to go higher and challenge the primary downtrend line. Still, the market is holding up impressively under a lot of bad news.A.F. Thornton
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AF Thornton Website: https://tradingarchimedes.com A.F. "Arthur" Thornton is an expert in logic, risk/reward quantification, market fractals, pattern recognition and asset class behavioral analysis with 34 years devoted to developing algorithmic and quantitative trading systems. In addition to trading his own capital, Mr. Thornton designs custom algorithmic and quantitative trading systems for a small and exclusive group of exceptionally qualified traders.