Interim Update – 11/8/2022

Good Morning:

• The day has finally arrived. Will we kick the bastards to the curb? Will it make a difference?
• And here is the greatest irony:
  • But first, you must understand that the elite cabal wants to control the weather.
  • After all, they look at themselves as gods. Some think the elites are already manipulating it.
  • Add to that conspiracy, one strategy the Republicans are deploying is to all vote in person on election day. This way, the Democrats cannot override the election results with machine algorithms.
  • So here I sit in California this morning, and we are having one of the worst rainy days we have experienced all year.
  • It won’t be pleasant to vote in person in California today.
  • Things that make you go, mmmm…
• Back to reality, the market will gap open today – so Gap Rules are in order.
• Our Volatility Trigger (3800) is sliding higher, indicating puts are being closed and calls added.
• While the current gamma region is somewhat flat, negative gamma kicks in below 3800 with significant, positive gamma building near 3900.
• Simply put (no pun intended), the market encounters higher volatility below 3800 and lower volatility as it approaches 3900.
• Today, there is a band of resistance above at 3834, 3842, and 3850. Support lies (no pun intended) at 3800, then 3760 (SPY 375).
• The election should release event volatility and support markets into Thursday’s CPI reading.
• Still, the VIX is consistently drifting lower to its current level of 24.5 despite the CPI volatility event looming.
• Without getting into the mechanics of making sausage, we associate the current VIX structure with regime change – e.g., from bear to bull markets.
• When this signal failed in the past, it was due to an unfriendly Fed – just like now. So I point this out to keep it in our narrative as we weigh all the evidence as we advance.
• I am in the trading room for a few hours this morning, where I will be featuring my new predictive Energy Algorithm. This new algo is still in beta testing, but we will monitor it today in real time.
• The algo predicts turns by analyzing the day’s low and high-energy magnetic field periods. We make this location specific, as we can switch between Chicago and New York, where the EMini futures contracts trade.
• Oh, did I forget? One last item from yesterday. The Commander of US STRATCOM recently said: “Ukraine is just a warm-up for what’s coming, and we need to prepare for the big one.”

Happy Election Day – the election might offer a small modicum of hope in this insane period – or not…

A.F. Thornton