Whiplash – The Sequel

Good Morning:

• Today is a good day to be in the Trading Room as I will demonstrate the Navigator II Algorithm and how it compliments the Navigator I Algorithm,
• I will be on the mic from the NYSE open. I cannot type as fast as I can talk, so don’t expect a lot of text updates.
• Yesterday was another whiplash day with the Meme crowd hammering the Dealers with Zero Day to Expiration options.
• I will develop an update on how these options are influencing volatility soon, but accept for now that intraday volatility increases bar ranges considerably.
• We now have two worlds in options analyses. We have the old world looking at longer-term options. Our analysis still helps guide us in this macro perspective.
• But we are also developing tools to help us understand and predict the new intraday world and take advantage of it.
• Yesterday saw averages of 20-point bars on the S&P Futures intraday. And there were quick back-and-forth 100-point swings (100 points is $5000 on one Emini contract).
• Whether experienced or not – the price action is hard to read, and traders can lose a lot of money.
• For now, the market could be putting in a lower high major trend reversal if the market cannot move above yesterday’s high.
• It could also continue consolidating between 4100 and 4200 before making a move.
• If the market can move above yesterday’s high at 4188, then last Thursday’s high at 4208, the market is likely to go up to the August high of 4327.50 before finally rolling into the 20-week cycle correction.
• Otherwise, the correction could get underway at any time.
• The market remains in overbought territory, but the trend is very strong.

A.F. Thornton