Archives September 2022

Founder’s Room Notes – 9/30/2022

S&P 500 Index Futures - Today's Trades
S&P 500 Index Futures - Today's Trades
S&P 500 Index Futures - 15-Min Algo Status Panels
S&P 500 Index Futures - 15-Min Algo Status Panels
S&P 500 Index Futures - Daily Algo Status Panels
S&P 500 Index Futures - Daily Algo Status Panels

AF Thornton
9/30/22, 12:34 AM
9/29/2022 – Summary we were in at 3632.25 and out on a trailing stop at 3658. All Founder’s Accounts are 100% Cash.
AF Thornton
9/30/22, 9:22 AM
Good morning: I will leave the 15-Minute Algo Chart Up. We are still looking for a short-covering rally possibly kicked from behind by the Fed Plunge Protection Team. But we don’t have a solid buy yet. No day-trading today as it is weekly and quarterly expiration, combined with the last trading day of the calendar quarter and month.
AF Thornton
9/30/22, 9:24 AM
Bottom line – Buy, Sell, Hold, or Cash? -Navigator Swing Algorithm Mode is Cash/Neutral. -Navigator Day Trading Mode is Cash/Neutral Because of Expiration
AF Thornton
9/30/22, 10:00 AM
We do have a cradle buy signal on the 15-Min Algo at 3640.25. I took a couple of contracts but I know what I am doing and this is still a tough kind of day to trade,
AF Thornton
9/30/22, 10:02 AM
Target is 5-EMA at 3685 in an ideal world which this is not. So far there is resistance at yesterdays halfback.
AF Thornton
9/30/22, 11:27 AM
I am out on the first contract at 3671.75, moving stop on second above break-even and trailing two ticks under the algo trigger on the 15-min chart. The 5-day line target has moved up to 3695. So I have a limit order to sell at the target and a sell stop at 3656.50, moving higher on each 15-minute candle.
AF Thornton
9/30/22, 11:47 AM
For those not on the room’s mic, we decided to exit the second contract at 3676.50 and wrap it up for the day. I will come in near the close and monitor for a swing buy signal – if it presents.
AF Thornton
9/30/22, 3:36 PM
I think we will stand down today and see what develops on Monday. The Russian annexation of Ukraine’s four provinces and Ukraine’s application to join NATA are throwing the markets another monkey wrench. This is a crazy time; if the shorts start making money today, our short-covering window expires. And if they run the shorts into the close like last week, it still leaves the market hanging around the recent lows – a cliffhanger. Enjoy the weekend – keep your families close and safe. A.F. Thornton

Interim Update 2 – 9/30/2022

S&P 500 Index Continuous Futures - On The Edge
S&P 500 Index Continuous Futures - On The Edge

Good Afternoon:

  • As I just informed subscribers, I think we will stand down today and see what develops on Monday.
  • I did cheat a little and we made a few points on some morning longs in the Founder’s Trading Room, but things turned south after Putin’s speech.
  • The Russian annexation of Ukraine’s four provinces and Ukraine’s application to join NATO are throwing the markets another monkey wrench. And there will be a big announcement from the Allied Powers at 1900 EST. 
  • Wow, we cannot wait to see what new suicide methods the woke crowd has for us now.
  • This is a crazy time; if the shorts start making money today, our short-covering window expires.
  • And if they run the shorts into the close like last week, it still leaves the market hanging around the recent lows – a cliffhanger.
  • And though we are close, there is no solid buy signal yet.
  • We also know things are breaking in Europe and the rest of the financial system. The NYSE Advance/Decline is at new lows.
  • And, as usual, I want a peaceful weekend.

Enjoy the weekend. Keep your families close and safe. It promises to get interesting next week for sure.

A.F. Thornton

Interim Update – 9/30/2022

Good Morning:

  • As indicated in previous posts, today is the last day of the month and calendar quarter. It is also a weekly and quarterly expiration.
  • We come into today neutral and in cash on all strategies, yet on high alert for a short covering rally to develop soon.
  • There is strong support at the 3600 Put Wall, which may hold us today. But resistance comes in at the 5-day line at 3685, which needs to be conquered for a good pop higher.
  • If anything, I would be more likely to wait for the close to do anything, and then, wouldn’t it be fun to hold over the weekend?

As always, stay tuned.

A.F. Thornton

AM Notes – 9/30/2022

Greetings Everyone:

  • Everyone knows I am not enamored with day trading Fridays, and I am even less motivated when it is the final trading day of the month and calendar quarter. We have both weekly and quarterly expiration today.
  • We are still in a small consolidation with one more thrust down possible, but also with the caveat that the Fed plunge protection team may try to spook the shorts – who look very trapped here.
  • Today and Monday are likely the short-term turning point for equities, but the turn could slide into Monday. Our two recent themes have been a sustained down move from FOMC into the end of September. And then a bounce out of today’s quarter-end OPEX.
  • Despite a very rough macro landscape, the equity market appears to have respected the options dynamics of time (expiration) and price (large put strikes). Despite all the market anxiety this week, the Put Wall (the strike we see with the largest put position) hasn’t changed from 9/23/22 at 3600.
  • If nothing else – as a sentiment indicator – the fact the Put Wall has not moved lower indicates that options traders didn’t buy significant puts at lower strikes despite the debt crisis. And every other sentiment indicator from the Fear and Greed Index, the 10-day Put/Call Ratio, and the VIX is coiled for a short-covering rally at the very least.
  • And the shorts are trapped after five sessions of pounding on the June lows with no reward. And need I say that traders established most of the puts near current prices?
  • Don’t forget that several large SPX block trades will hit the tape today as dealers facilitate the JPM collar roll. Ultimately today’s JPM collar will expire, and they are likely to establish a new collar for the Dec 30 OPEX.
  • Today’s market impact of this collar roll could come from intraday hedging of the position, which has a maximum level of ~$10 billion. The roll will likely impact volatility today, but estimating where and when is tough. That is why I wouldn’t say I like day trading expiration days. 
  • Likely, there will be some large Market on Close prints and potential jumpiness into the close.
  • After today, the JPM collar expiration impact is diminished because the position will be rolled out in time and price.
  • Interestingly, today’s expiration is not that large but meaningful because it’s purely put positions.
  • This put expiration is enough to give equities a bump, and that could lead to a rapid decline in implied volatility. So, we have Put deltas coming off due to expiration and Vanna tailwinds.
  • Note also the movement of the TDEX “Tail Risk” index. There was a sharp move in this metric over the last week, which tells us that traders were buying deep out-of-the-money puts. These puts could get smoked on a rally and help generate a 5% equity rally rather quickly.
  • We need to be very clear about this. The macro risks in this environment are massive, and it is the perfect environment for something to snap and cause limit-down style moves. That is why we favor playing rallies in call positions with fixed risk.
  • Also, we base this rally view on sentiment and position analysis, nothing fundamental.
  • Because we are in a Put-heavy environment with high volatility – rallies should be treated as unstable and subject to rapid reversal. Think CPI crash or even yesterday’s reversal from the 3940 Wed closing to the 3913 Thursday lows. Those were 3-5% rallies which retraced in hours.
  • There is path dependency here, too. While we look for a rally into next week, we believe clearing out Put positions ultimately allows for lower market prices further out in time.
  • While today’s 3600 Put Wall strongly appears to be the floor into today’s expiration, that floor is likely to be pushed lower after OPEX (i.e., Put Wall lower). Take, for example, today’s JPM collar position, which may be rolled down 3-5% from 3580 to somewhere around 3400.
  •  Bottom line:
    • Look for support today at 3653 and 3602, with resistance at 3700 and 3720 (SPY 370)
    • Be alert for a swing buy signal – perhaps near the close if the algo paints a solid buy.
    • Watch your text/email alerts closely today, especially as we approach the close.
    • No day trading today.
    • Any swing trade will only be for a short-covering rally – not “THE” bear-market low. We will keep stops tight.
  • Live charts will be up in the trading room.

Stay alert, and have a good weekend.

A.F. Thornton

Epilogue – 9/29/2020

Good Evening:

Our morning long did not stick, but we were well-positioned, entering at 3632.25. And then we were rewarded with 25 points as we exited on our trailing stop at 3658. It was tempting to try again as the market approached the close, but there wasn’t enough runway left, and the Founders Group did not want to hold overnight.

The question is whether Europe’s woes are ready to spill over to the U.S. now or later. And interestingly, the S&P 500 Index is pounding on the June low with no real success in sustaining a decisive break. Properly placed, a trade near the morning price is a low, risk-to-stop trade entry point. We can still make money even if the rally fizzles.

Our algorithm is slowly but surely running through its list of buy alerts. But we have no comprehensive swing buy signal yet – even though it is close. And close only counts in horseshoes and hand grenades. Still, a short squeeze is getting closer even if the market goes a bit lower (and by all rights, the stock market should). And to further complicate matters, tomorrow gets dicey as the last day of the month and the calendar quarter.

We would love to work another swing buy signal with short-squeeze tailwinds. And everything looks to be set up—five sessions and no acceptance below the June lows. To us, it seems like the shorts are getting trapped. It pays to “think” and identify the “pain” trade. Right now, the pain trade is higher.

Ben Franklin once said you must buy on the canons and sell on the trumpets. Canons are firing, and the sentiment might be too bearish for further declines – at least for now. And even if nothing happens tomorrow, money managers have one final calendar quarter to try to recover from their terrible year-to-date performance. Their FOMO will kick into high gear on Monday.

I wish tomorrow weren’t Friday or the end of the calendar quarter. Money managers will be window-dressing before taking the plunge and putting real money to work on Monday. Their activities will likely fog my screens – at least for tomorrow. And then, will I want to be long all weekend? How about short if everything goes south?

Nobody said it would be easy. Let’s see how it all lines up.

A.F. Thornton

Interim Update – 9/28/2022

Good Morning:

  • As mentioned Monday, my schedule is tight this week, which has made it challenging to be generous with my public commentary.
  • The bottom line this week, and even this morning, is that the S&P 500 should be in a lot worse shape than it is, given all the “visible” circumstances.
  • While continuously flirting with a break below the June 3639 lows, there is no sustained break.
  • If it is not going down, the stock market is likely going up – even if it is just another short-covering rally.
  • And let’s face it – the short-covering rallies in this bear market have been spectacular – and those involved will always hope that the short-covering rally at hand will become the bottom of the bear.
  • Nobody will ring a bell at the bottom – or a low – and the news will be just as dire as it is now.
  • For anyone paying attention, there has been global sabotage of food and energy production and distribution centers over the past 12 months (including in our own “open borders” country).
  • An organized cabal is out to purposely make worse a food and energy crisis already on the horizon for this winter.
  • In the past year, some organized Cabal has already sabotaged at least 20 important food and energy production facilities in our country alone. Apparently, the mainstream media is not allowed to discuss it, which says a lot about the Cabal’s identity and connections.
  • So the sabotage of the Nordstream Pipelines is no surprise. It is highly likely a Globalist plan executed by the Orwell regime.
  • And we already know that the regime operates on the orders of the U.S. Military Industrial Complex and its partners in the World Economic Forum (“WEF”), International Monetary Fund (IMF), and the United Nations (UN).
  • The Orwell regime’s handlers do not want the Russia / Ukraine conflict resolved unless they can dethrone Putin and carve up Russia.
  • A resolution of the conflict would restore cheap, free-flowing Russian energy to Europe again.
  • Restoring cheap Russian energy would compete with the climate change agenda and strengthen Russia’s European influence.
  • With friends like President Orwell and the Cabal that pulls his strings, Europe hardly needs enemies.
  • But for now, there is little to no reaction in our stock market – which supports a potential short-covering rally soon.
  • Given the plethora of negative events, rejecting prices below the June low is bullish – at least for the short term.
  • And positive seasonality kicks in for stocks about the middle of October, perhaps boosted by the mid-term elections that follow. Of course, the markets could still set off some fireworks between now and then.
  • My forecast is simple. The market will continue to drift down, interrupted by steep, quick short-covering rallies through next spring. One of those rallies is close at hand.
  • If this bear market is like the others I have studied and experienced; the short-covering rallies will diminish in strength and intensity over time before the final bear market capitulation.
  • Since last week, the Founder’s Group has continued to reverse positions from long to short and vice versa on short-term buy and sell signals by applying the Navigator Algorithms to the hourly charts. Our previous short was 3700.25 yesterday, which we reversed at 3642.75 on something we call a “cradle” buy signal. 
  • But our public stance and swing-trading accounts have been neutral since yesterday but remain on high alert for a buy signal in the swing-trading algorithms.
  • We maintain that neutrality, with the risk of a rally higher than the risk of further declines at this moment. The market’s muted reaction to the Nordstream Pipeline sabotage underscores that position.
  • The sabotage makes a settlement of the Russia / Ukraine conflict more difficult. That was the intention. The Globalists want war, aiming to conquer Russia and China at any cost. 
  • And since the Globalists have a parallel objective of population reduction – you can see that a war with Russia and China accomplishes more than one of their objectives.
  • As one example of a direct threat to the Cabal, Russia’s constitution declares the country a Christian nation. Further, Russia also made traditional marriage between a man and woman a constitutional position.
  • Russia does not want the anti-family, anti-church, anti-gender, and sexual child-grooming Great Reset agenda overtaking Western Nations – much less Russia.
  • China doesn’t want the Great Reset for different reasons. They do not favor “girlie-men” or sexual liberalism -especially with their children.
  • The plot is hard at work, putting us into a war with Russia and China because the Cabal cannot implement the Great Reset until the two opposing superpowers are out of the way. 
  • The Cabal has already conquered the U.S. with the 2020 Coup and all that has followed. It should be obvious to anyone as we watch our liberties destroyed and our government institutions weaponized against half of the country.
  • That is how the Cabal can get a submarine to take out Nordstream while leaving Norway’s new gas pipeline unharmed.

Stay tuned, hold on to your wallet, and we will do our best to keep you out of harm’s way.

A.F. Thornton

Interim Update 2 – 9/27/2022

The Founder’s Group reversed the long from 3668.75 yesterday to short at 3700.25 this morning with a 5-point buy stop. We will trail the stop if the market moves lower. 

The Failure to take out the 5-day line on the second attempt this morning negated the chance of a buy signal painting as yet. That does not change the fact that the market is still oversold with a lot of attendent fear. A neutral stance is justified in the circumstances as indicated in the first update this monring. 

This will be our last public comment today.

Interim Update – 9/27/2022

S&P 500 Index Continuous Futures Daily Chart - Navigator Algorithm
S&P 500 Index Continuous Futures Daily Chart - Key Levels

Good Morning:

  • The Founder’s Group notified subscribers yesterday afternoon that we were covering our latest short position at 3668.75.
  • We had shorted the morning drive at 3717.25.
  • From a trading perspective, shorting at the 5-day line has been successful. But the Navigator Algo is painting preliminary buy signals on the daily chart.
  • The alerts tell us to pay attention – but not everything is in place for a solid buy signal yet, and the signal may not complete.
  • The signals are enough to keep us neutral while we see what develops.
  • If anything, one still has to wonder why the S&P 500 is not in worse shape with a complete meltdown in 10-year treasuries and junk bonds.
  • The Founder’s Group believes the sentiment is too negative here and needs to bleed off before we get the next down leg.
  • Also, with the third calendar quarter ending this Friday, there is always some nonsensical distortion around money manager duck, cover, and window dressing.
  • Our aggressive accounts took the long side for a bounce on the cover signal but maintain a veyr tight trailing stop.
  • But the trend remains down, so manage long positions carefully. For those of you still holding onto hope – any meaningful rally is another chance to liquidate longs and cull your portfolio.

A.F. Thornton


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