Morning Notes – 4/4/2022

Good Morning:

• Inflation caught up with food prices in Germany, which are set to rise 50% at the major grocery stores today.
• Russia cut at least one gas pipeline to Europe over the weekend. The UK is most affected, but all of Europe must find a way to energy independence soon.
• There has been no progress in a Russia / Ukraine settlement or cease-fire.
• There is a lot of chatter about the inverted yield curve and recessions. Both the yield curve and low Consumer Confidence would validate a recession in the near future, but it has not arrived as yet.
• Volatility picked up a bit after Friday’s weekly expiration.  I am expecting plus or minus 34 points from the open today (about .75%).
• The bulls still have the edge at the moment, but 4500 is critical support.
• Upside resistance is at 4550 and then 4600.
• 4600 is where dealer flows begin to support the market.
• 4500 is where dealer flows become negative for the market.
• Between the two key levels is somewhat of a void. But whichever level breaks will lead the next direction up or down.
• Even though each of these levels is further away from the current price (about 1%) than the volatility estimate (about .75%), I would not be surprised if we tag one of the levels today.
• The Weekly Expected Move range this week is 4450 (about where the 21-day line sits) to 4620 which is near last week’s high).
• The weekly candle for last week was a bearish spike reversal. However, it needs to be confirmed today by a lower close to be valid. 
•  I have been a bit under the weather the last few days, so I will be keeping it brief and won’t be trading today or tomorrow.
• Obviously, there are a lot of issues on the table right now but stick with the usual plan. Swing Traders need to stay in cash for now.

A.F. Thornton