Founder's Afternoon Notes - 3-3-2022 | Archimedes Methodologies

Global tensions continue to ratchet higher. The situation is almost beyond comprehension.
Chaos and instability are what we get when an administration selects the people in charge for their wokeness or tribe rather than their abilities.
I call the Russia/Ukraine conflict the Green New Deal war – because the Green New Deal facilitated it and may ultimately lead to our demise.
I call this the “Affirmative Action” administration. I don’t like my surgeon or airline pilot selected for anything other than their abilities, nor do I like the people in charge of my country selected or assigned for their wokeness.
If it is difficult to believe that we have unqualified people in charge, look at where we find ourselves after barely one year. Case closed.

The market is every bit as concerned as the rest of us. We got the look above and fail per Balance Rules this morning. The resistance line at 4400, also the balance area high and the 21-day line and mean, was the immovable object.
The S&P 500’s turn at $4,400.00 also resulted from a rise in call open interest above current prices which we pointed out this morning likely represented short positions.

The market rolled over to the 5-day line on the failed breakout, which saved the market from a complete trip to the other end of the balance range at 4275.
Globex’s action is unpleasant thus far, given that the Russians are attacking one of the ten largest nuclear power plants in the world located in Ukraine.
At best, there might be a rising wedge on the hourly chart with another leg up to go.

It is nothing short of astounding that the S&P 500 Index remains in about a 10% correction given the lofty valuation levels and the entire scenario unfolding.
I am still on the fence about whether the market is consolidating to work a bit higher or whether we are waiting for a waterfall, panic-puke.
As the days wear on, the puke scenario is looking more tenable.
There is increased potential for instability so long as participants maintain S&P 500 Index prices below the Volatility Trigger – forming the middle of the price action at 4380 today.
Given the negative gamma, heightened volatility remains, as does the potential for larger ranges; the negative gamma component can amplify the negative (or positive effects) of news. We need to exercise caution.
So what do we do? It doesn’t pay to bet on the end of the world because even if we are right, how do we collect!
Maybe the risk of a rally is greater than the risk of a puke?
- AAII Sentiment Survey: Retail Bullish Percent down to 23.40 last week – historically found near lows.
- CNN Fear & Greed Index: 17 = Fear Approaching 2020 Covid Lows.
- National Association of Active Investment Managers: Equity exposure at just 44.41% found near bounces and bottoms.
- 10 Day Moving Average Equity Put/Call Ratio at .625 (the highest level since 2020).
- The time to buy insurance (puts) is BEFORE the fire!
Let’s continue to take it one day at a time. We are back to 100% cash after our last profitable trade hit stops this morning. It helps me sleep better.

A.F. Thornton

Founder’s Afternoon Notes – 3-3-2022

Founder’s Afternoon Notes – 3-3-2022

AF Thornton

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Founder’s Afternoon Notes – 3-3-2022

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