Founder's Trading Journal - 10/12/2022 | Archimedes Methodologies

S&P 500 Index Continuous Futures / Today’s Close – 3588.50 / -10.75 pts (-.30%)

Published Wednesday Evening

Navigator Swing Strategy™

Navigator Algorithm™ Trends

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.

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.

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Founder’s Trading Journal – 10/12/2022