Blog

The Equinox Arrives? What Does it Mean?

Mar 21, 2023 AF Thornton 0 Comment

Good Morning:

-♂- Since our last correspondence, the Founder’s Group has enjoyed a couple of profitable round trips on the Archimedes Hourly Strategy and remains in an Archimedes Daily Strategy buy signal at 3895.25 that came on March 15th slightly before 1 pm EST.

-♂- As usual, we are looking to the 5-day line currently at 3981.75 to add to positions. While somewhat paradoxical, a material and sustained violation of the same level triggers an exit of our entire position from the market. In a sense, that is why we call it a low-risk entry point.

-♂- Not much is at risk when we buy under the line as the first stops are triggered. We don’t place formal stops right there anyway but we have a proprietary way of handling our positions. As I mentioned, stops are a last resort or fail safe measure for us. We prefer to exit profitably on waning strength. In this market, we plan to sell our entire position into the NYSE open this morning so we are in cash for tomorrow’s Fed announcement. Our systems are not telling us to do so, it is a call that emphasizes our commitment to capital preservation. We don’t mind returning to the market at higher prices. We already have triple-digit returns since January 1st.

-♂- It seems unwise to endure the volatility sure to follow what may be the most important Fed interest rate announcement of our lifetime. The Fed’s Hobson choice may be further inciting inflation versus saving the banking / economic system. Let’s face it, the Cabal wants to reset everything into global communism anyway.

-♂- What a cluster&*^% the Fed, U.S. Treasury, Congress, and the Defense/Intelligence apparachiks have created. Surely we are committing economic suicide as competitor countries are poised to clean up in the wake of our egregious errors.

-♂- And then President Trump is slated to be arrested today. If so, we join the ranks of Banana Republics everywhere. Perhaps Argentina is a good model as to where we are headed. Their inflation has been 100% over the past year.

-♂- So there must be a diversion! The Ukraine War is failing. Banks are collapsing. Don’t be fooled. Keep your eyes on the economic ball and the War Mongers.

-♂- Ukraine, China, Russia, World War III, inflation, the collapsing banks, and economy. These are the things that matter when the Cabal tries to suck the air out of the room by arresting President Trump.

-♂- Today is the Spring Equinox and New Moon for the new Lunar Year. If the market is rising into this special date, it often reverses. No guarantee, but carry this forward in your narrative.

A.F. Thornton

Founder's Trading Journal

Heaven or Armageddon? What Comes Next?

Mar 14, 2023 AF Thornton 0 Comment

Good Morning:

♁- To suggest we are at a critical moment is an understatement. Let’s examine the stock market’s location using our usual proxy, the S&P 500 Index. Because I mainly trade futures, I will use the front-month Emini continuous contract. Today is a good time to step out and look at the big picture.

♁- Let’s take it a step at a time, beginning with a look at the triangle consolidation that has been underway since August 2022:

♁- What is a triangle if not confusion and consolidation? As of the last seven months (7 being a key number for the stock market), bulls and bears have had equal power and have been battling for control.

♁- For our purposes, the most important question is, what does it look like if the bears win? A picture can replace a thousand words:

♁- A good target for the panic cycle implied by an inversion of the Master Cycle is the midpoint of the 100-year channel shown above.

♁- Keep in mind that this is a monthly chart. It moves very slowly until it doesn’t. You can analogize it to the two previous bears starting in 2000 and 2007 out to the left side of the chart. Both of those declines exceeded 60% on the futures contract. Remember that this is a log chart. The current slide will look understated compared to the previous two bears.

♁- If we take an average of 60% for the two previous bears and project it to the current bear, we land right in the middle of the current circle (a circle is the three-dimensional representation of a cycle).

♁- Depending on how quickly the price would get there, it would join the middle of the rising 100-year channel, roughly 3000 or so on the S&P 500 Futures contract. Note that this was our original forecast from January 2022

♁- Geometrically, the next market reversal (from the direction leading into it) comes this summer (July) from a monthly chart perspective.

♁- This is not a forecast. With bulls and bears still wrestling for control, prognosticating would be unwise.

♁- But the chart immediately above allows us to examine a possible worst case for a fully invested bull if the price breaks the pattern and stays below the red line. Obviously, a bear would smile ear to ear for the given opportunity.

♁- Right now, and viewed solely from the monthly chart perspective, the battle is about breaking above that falling red line for the bulls and maintaining price underneath the line for the bears.

♁- Note that investors must be careful in triangles. Often the first breakout fails, and the market completely reverses, eventually breaking out in the opposite direction. Your tactics must take this risk into account.

♁- And don’t forget that any break below 180^ will cause the price action to accelerate. It falls off the proverbial shelf, and gravity takes over.

♁- All of this raises the question, do we abandon the 60-Year Master Cycle over a couple of poorly managed banks and a poorly managed country? Sorry for the loaded question, or the answer would be an obvious “yes.”

♁- A better way to analyze a potential cycle inversion is to realize that brief anomalies will occur only to see the cycle resumed. Also, Forecasts derived from 60-year-old data have inherent limitations. As examples. planetary differences and non-trading days (such as weekends and holidays) don’t always align.

♁- Below, you can see the difference between the full 2023 forecast for the Dow until the end of March compared to the current actuals:

♁- Our combined indicators brought us to cash (short) well before recent declines. We are in the catbird’s seat. I am not up for a sudden move into the markets now. I am primarily watching the bond market and the MOVE (bond volatility) Index.

♁- Here is the 60-year Master Cycle if we allow for the inversion:

♁- The Consumer Price Index was just released. It was in line with expectations but still 6%. It was lower than last month’s 6.4%. I don’t think this “meeting of expectations” necessarily boosts the market. For the moment, inflation is less of a concern than systematic risk.

♁- For the most part, the S&P 500 is testing the neckline breakdown of the Head and Shoulders topping pattern at 3925. If the market rejects the price by failing to close above it, we have a 300-point breakdown target of 3625.

♁- Not that it matters much, and we will let the price action guide us, but I am still expecting a bottom around mid-month, an attempted rally into May, with Armageddon to follow. But we cannot trade my opinion, right? Or at least we shouldn’t.

♁- You remember my “opinion” track record? 50/50. How about the Archimedes Algorithm? More like 85%+. Who/what would you rather follow?

♁- We remain 100% cash or short for our more aggressive friends. But we want to throw our line back in the water when the opportunity ripens.

A.F. Thornton

Founder's Trading Journal

The System is Straining

Mar 13, 2023 AF Thornton 0 Comment

Good Morning:

♄- I am reserving most of my observations for premium subscribers, but I want to share a few thoughts with you.

♄- Two of my recent concerns had been a Master Cycle inversion and a credit event. We may have both, with banks collapsing all over the place. The small to regional banks are the most vulnerable.

♄- Having started and owned a bank, my perspective is from an insider’s point of view.

♄- Once again, the banks suffer from errant Fed policy and grievous Congressional spending, encapsulated in a Fourth Turning and War Cycle.

♄- The Fed incentivized banks to put their funds in long-term treasuries to keep the Congressional spending going and to shore up the U.S. Dollar. It would have been better to incentivize banks to lend.

♄- But the Federal Government needed the money because the backfire from stealing Russian reserves due to the unwise Ukraine sanctions meant that very few countries wanted to buy our treasuries anymore. See how this works?

♄- The purchased treasuries were returned to the Fed overnight in reverse REPO transactions for a measly 0.50% interest payment.

♄- When rates go from 0% to 5% as now, especially this rapidly, the principal value of the treasuries decreases if the banks want to sell them before they mature in 10, 20, or 30 years. Some instruments have dropped 25% in value if the bank wants to sell early.

♄- The banks must adjust their balance sheets to reflect the temporary principal loss even if they don’t want to sell the securities. They call this “marking to market.” In marking to market, the banks need more money to meet their regulatory capital.

♄- So Silicon Valley Bank, the 20th largest bank in the country and a top-rated bank until a week ago, disclosed that they needed to raise a few billion to shore up their balance sheet. When their uninsured depositors (96% of their deposits) realized that the bank’s viability was in question, they pushed a button to move their funds (no lines when there is a run on the bank as in the old days). It is all electronic now.

♄- In the circumstances, the bank must sell its treasuries early and realize the loss to meet depositor demands. As they take the beating without new capital, they eventually run out of funds because they don’t have enough money to meet the needs of the “run on the bank.”

♄- So, the Silicon Valley Bank bank and several others collapsed Friday. The Feds stepped in and put the insolvent banks in receivership.

♄- Over the weekend, it became clear that the entire banking (and brokerage) system could collapse this morning. In an emergency meeting Sunday, the Fed agreed to lend against the full value of bank treasuries to prevent a run on other banks. You see, 96% of all bank deposits in the country are uninsured.

♄- The overnight futures market responded favorably to the Fed’s emergency move, but the Globex equity futures market is at new lows this morning.

♄- Anything can happen, including a complete panic. A panic resonates with the 1903 panic cycle and tracks a full inversion of the 60-year Master Cycle.

♄- Friday, the Master Cycle dropped to an 80% correlation. As I mentioned in previous writings, anything less than 80% constitutes an inversion in our discipline. So we are prepared.

♄- Our last sell/short signal was 4069.75 on the Archimedes Hourly Strategy and 4038.25 on the Archimedes Daily Strategy last Monday and Tuesday. So our subscribers are either in cash or short.

♄- We will now look for a buy signal. We will know when we see one. But because of where we are in the cycles and the time of year, remember that we are likely ending something here rather than beginning something anew. The third anniversary of the Covid Crash low is in a few days. The number “3” and third anniversaries are important in Kinectics.

♄- The Room will have charts and comments posted today, and we will trade on Thursday this week. Please consider a free 7-day trial subscription to help guide you through this.

A.F. Thornton

Founder's Trading Journal

Lowering the Boom

Mar 8, 2023 AF Thornton 0 Comment

Good Morning:

♆- Fed Chairman Powell whacked the stock and bond markets with his testimony yesterday.

♆- Our second strategy, the Archimedes Daily, went to cash at its 4038.25 stop to close out the 2/2 buy signal. The hourly strategy had returned to cash/short the previous day.

♆- All subscriber strategies are in cash (or short for more aggressive subscribers).

♆- Subscribers received the live sell alert yesterday by text, giving them several chances to exit before the market collapsed in earnest.

♆- Apparently, the Fed did not read my notes yesterday. I thought they would goose the stock market until the next meeting, then take the gains back. I could not have been more wrong.

♆- I suppose with his congressional testimony, Fed Chairman Powell took his remarks more seriously. He is still trying to fix the grievous errors that brought us this inflation in the first place.

♆- Anyway, there were no surprises. The Fed is doing what it said it would do. And I suspect they will keep going until something breaks. I am expecting some “credit” crisis or event to end this.

♆- Of course, a country firing off a Nuke or EMP, or perhaps China invading Taiwan, remains a proverbial Black Swan event. Having said that, it would not be a Black Swan if we could anticipate it. The Swan will likely be obvious, with nobody even contemplating it now. The law of unintended consequences in full regalia.

♆- I would caution that similar price setbacks to yesterday occurred at the previous intermediate lows in this bear, and the market immediately reversed higher. We are on the nominal Hurst 20-day cycle Future Line of Demarcation, a perfectly valid type “B” interaction.

♆- Let’s follow the Archimedes Algorithm and go where it takes us.

♆- As I have been cautioning, even with all of the tools at our disposal, the risk of a cycle inversion keeps us from having strong, bullish (or bearish) convictions.

♆- It was about this time in 1903 that the financial panic ensued. That was two Master Cycles ago.

♆- W.D. Gann commented that years ending with a “3” typically start a bear year, but the rally from the 2nd year may run to March or April before the bear ensues (“or reasserts itself as in 2023”). [Emphasis Added].

♆- Cycles can extend, contract, and invert from time to time. Anomalies can occur as well. So, always watch the chart in front of you – what the market does matters most.

♆- The weight of the evidence is that the tape was/is turning bullish, only to be negated by closes below the 2/2/ low at 3925. There is no apparent reason for the bullishness, but there never is at this stage.

♆- As I mentioned when the rally began last week, “V” bottoms are rare, and the low would be retested. Here is the retest. But the market low on 2/2 may have been a retest of the Helio cycle low and turn the week before. So yesterday’s low could be it.

♆- In the optimistic case, the market will not reach the 2/2 low. Instead, it will pick up sooner from a rising trendline or the Hurst 20-day cycle FLD.

♆- In another case, the market will run all the stops under the 2/2 low, scare the crowd, then turn higher. Recall the old-style bull market behavior that seems so long ago.

♆- In the worst case, kiss current prices goodbye. The market has not yet found the bear market low and meanders to the measured move around 3200.

♆- I have always expected the worst case since my January 2022 outlook. A generational trip to the 100-year channel would seem in order.

♆- Most recently, I have been expecting the Southern route to begin after a rally into May. I am still on that path as long as the 3/2 low holds. Short term, I have been looking for a rally, at least into the day before the Spring Equinox – 3/20, as long as the Master Cycle does not invert.

♆- In my experience, intervening news or events such as Powell’s speech only temporarily derail the market’s preordained path.

♆- We are still working on the Website and all the new services – and I won’t always put out public comments here any longer, but believed a few comments were in order after yesterday’s Fed speech and market rout. Fed Chairman Powell has a second day of testimony today. Let’s see if he tries to soften the blow.

♆- Don’t forget the jobs data coming out today and tomorrow. In the wacky world of finance, to “fix” the inexcusable inflation at hand, it helps to put a lot, and I mean a whole lot, of people out of work.

♆- How do you feel about Central Planning? Does it seem to work? I think not. And this is what the Globalists want to foist on the entire world through the commie World Economic Forum. President Orwell is about to turn our entire healthcare system over to the corrupt World Health Organization. Brussels will soon be telling your local doctor what to do, and they can seize your land if they don’t like what you are doing with it. You cannot even make this stuff up. It is so frightening.

A.F. Thornton

Founder's Trading Journal

Fed Speak Could Boost the Rally

Mar 7, 2023 AF Thornton 0 Comment

Good Morning:

♂ – Fed Chairman Powell gives his semi-annual testimony to Congress today.

♂ – The market is usually quiet before the speech is published, but the question and answer session might cause a rift, so be careful.

♂ – The Archimedes Algorithm issued a sell signal for the Hourly Strategy mid-day yesterday.

♂ – The Daily Strategy (which has a wider tolerance for volatility) is still in hold mode.

♂ – We would look to add to the Daily or re-enter the Hourly at the daily mean, depending on the market’s reaction to Powell’s speech.

♂ – As always, don’t take your advice from a blog but do your homework or take a subscription.

♂ – While it could be my imagination, and it is pure speculation, it seems like the Fed talks dovish between meetings, possibly to keep the stock market afloat or even boost it.

♂ – They lower the boom at the next meeting (about two weeks from now).

♂ – As I counsel from time to time, the path of the stock market is often preordained, which is why it baffles most people.

♂ – Since last October, the market has rallied despite all the bad news.

♂ – To think we would be sitting here with the terminal Fed Funds rate expected to exceed 5% from 0% in a short period with the stock market still rising would have been unthinkable even a year ago.

♂ – After some initial volatility, the stock market will likely resume the rally. After all, what will Powell say?

♂ – Let me paraphrase (before the next meeting) “we think our medicine is working. Inflation seems to be easing, but we will take the incoming data and raise rates to fight inflation until it is licked.”

♂ – At the next meeting, “Inflation has been stubborn, but we will take the incoming data and raise rates to fight inflation until it is licked.”

♂ – After the speech – rally. After the meeting in two weeks, look out below. Anyway, we shall see.

♂ – Meanwhile, we are finishing the Website programming to convert to the new services announced on March 1st, including the free trial.

♂ – As previously mentioned, I will still publish thoughts here occasionally, just not daily.

♂ – Premium subscribers, I will be in the Founders Room this morning to interpret the Fed-speak. Make sure your mobile device is configured for text messages.

A.F. Thornton

Founder's Trading Journal

Hat Tip to the Master Cycle

Mar 5, 2023 AF Thornton 0 Comment

Good Evening:

☿ – It is one thing to handle the market as it comes to you, but you enter an entirely new paradigm when you can predict the turn windows well in advance. Granted, you don’t take the curve blindly at 100 mph, but when the stars align you know what to do.

☿ – And if I told you I predicted the market’s path over the past 15 months with 85% plus accuracy more than a year before it happened, would you be interested? Well, I did. Below are the charts published just since early February, identifying the Thursday/Friday turn. Go back through this blog, the information is all there.

☿ – Actually, we could have made the prediction many years earlier. Soon, I will publish a prediction for the next five years, but I hesitate in doing so knowing what lies ahead.

☿ – Let me be clear, I am not bragging. Nobody is more amazed than I am. But when you unlock the mathematical codes, anything is possible. These codes have been hidden for millennia. I am not the only person to crack them, but it is a small club. And when you are in the club, it is an unwritten rule that you not reveal the information.

☿ – You see, the codes are not just about the stock market. They are universal. The same codes apply to physics, engineering, medicine, biology, finance, business, computer science, and industry.

☿ – Nikola Tesla had the codes. Upon his death, the FBI cleaned out his safe and the technology for free and abundant energy along with it. Free energy does not serve Big Oil or the power of the World Economic Forum. We had the cure for most cancers by the mid-1850s using the codes. But that doesn’t serve Big Pharma. And if the little guy had the stock market codes, Wall Street would have nobody to rob. It is a zero-sum game. Someone is either taking your money or you are taking theirs. It is an age-old story.

☿ – The codes were purposely obfuscated beginning with the Roman Empire because elites throughout history coveted the knowledge and did not want it in the hands of commoners. Rome even changed the calendar to keep the public off track of how things work in the world and physics. It is all connected. And the Vatican Library has all of this information under lock and key.

☿ We fret like rabid dogs over this report and that policy. In reality, the path is preordained. Sure, the market can be rocked at the margins by current events, but it eventually returns to the path. It has DNA, a signature, and a frequency. Some call it the Law of Vibration.

☿ – I will save the story for another time – maybe an upcoming Webinar. For now, the market actually started waking up with the Helio cycle turn the preceding Thursday. But the current path can be ordained from the following charts published on these pages beginning February 10th.

☿ – Would you like to learn how to do this? I am working on a series of Webinars that I will announce soon. While there are certain secrets I will likely never reveal, I will reveal enough that you will be able to do this and more.

☿ – So we are always in long on both the Daily and Hourly Archimedes Strategies at S&P 500 Futures at 3931.25. Subscribers got the signal live last week. Closes below the 5-day line triggers our maximum tolerance stop, but we tend to look for exits beforehand.

☿ – The market is ahead of itself, and “V” bottoms are rare, so a retest of the recent lows is possible. But the Master Cycle predicts the market moving higher until it stalls again in May. That is where it gets interesting.

☿ – And we are still in the inversion window for a few more sessions, so the market is not solidly out of the woods yet.

☿ – But I would not want to be a bear right now, that is for sure.

Enjoy the ride while it lasts. Consider a monthly subscription as it will more than pay for itself. Attend the webinars to learn more.

A.F. Thornton

Founder's Trading Journal

A New Dawn – 3/1/2023

Mar 1, 2023 AF Thornton 0 Comment

Good Afternoon:

☉ As winter transitions into spring, BluPrint Quantitative is transitioning too. We have some exciting announcements.

☉ Henceforth, we will be known as Archimedes Methodologies, Ltd. Our new email address will be TradingArchimedes@gmail.com. Our new website address will be TradingArchimedes.com. All former websites and email addresses will still work and direct you to the new site for the next year.

☉ The motivation for the name change is twofold: (i) there has been confusion with other firms that started after us with similar “BluPrint” or “Blueprint” names. Second, the name better reflects the Geometry, Physics, and Astrometry (Kinematics) supplementing the traditional technical analysis in our algorithm.

☉ We will continue offering a timing service for public subscribers and a series of educational Webinars. The timing service offers two levels of swing buy and sell signals; a short and intermediate-term swing trading service. Subscribers will receive all necessary support to act on the signals.

☉ The cost will be $297 monthly until September 1st, when the price will increase to $369.

☉ On September 1st, all existing subscribers will be grandfathered at the $297 fee for the life of their subscription.

☉ We will earn this fee in droves. At this writing alone, our subscribers avoided a 6% loss since our last sell signal on February 2nd. They avoided a 30% peak-to-trough loss based on our January 2021 sell signal and October 2022 buy signal. More gains were possible from the October 2022 low to the February 2nd sell signal.

☉ And if one had shorted the market on the sell signals and reversed to long on the buy signals, returns compounded even further.

☉ A subscription allows you to earn potential triple-digit annual returns, as we have demonstrated over the past three years.

☉ While the past cannot predict the future, and there can be no guarantees, we believe we proved ourselves these past few years by successfully navigating the most challenging stock market in 15 years.

☉ After struggling with renaming the algorithm, we have decided to mix the new with the old. Henceforth, we will call it the “Archimedes Navigator™.“

☉ The Archimedes Navigator™ is a fractal trading algorithm that works in all time frames. I will occasionally break out the individual algo components (like the Helio and Athene) for educational and demonstration purposes.

☉ All monthly subscribers to the timing service will now have access to the Founders Room and live text alerts when we issue new signals. The Founders Room will serve as our primary meeting place and bulletin board. The “Files” section in the room will have all the information you need to understand and trade the signals.

☉ Instead of an elaborate morning blog that takes me several hours to prepare and write, I will send my thoughts to subscribers throughout the day by text. I will also post the comments in the Founders Room, and we will email the comments at the end of the day to all subscribers.

☉ We will also use the room to gather on short notice for events that require more than a text alert. The room also has a mobile app for your phone or Ipad. You can enter and view the room anytime from any mobile device and access live video and posted live charts.

☉ As you can see, we will use the Founders Room in many ways. And I will still demonstrate day trading and feature guests from time to time in the room.

☉ I will announce the day trading on more of an ad hoc basis each Monday. Generally, though, we will day trade at least once a week.

☉ We are also announcing a progressive series of three educational Webinars. The purpose of the webinars is to break out the components of our algorithm in a logical sequence and teach the methodologies. Premium subscribers will receive substantial discounts on all webinars.

☉ The importance of learning the methods underpinning the algorithm cannot be understated. Our algorithm is merely one way to combine them. Alternative combinations are infinite, and you can customize them to your trading style.

☉ The third program in the series will be an in-person mastermind held quarterly at a destination resort. It will be limited to five invited participants, last about four days, and include live trading. I will personally mentor these students and groups going forward.

☉ Graduates will become members of the special Founders Group, know everything we know, and have access to all proprietary indicators.

☉ Details and prices will be announced in the next few days.

☉ Our website will occasionally be down (and may look funny) as we implement the new changes.

☉ Existing blog fans can sign up for a free trial of the new service before committing.

☉ I will still post occasional commentary and YouTube videos on these pages, just not every day.

Thank you in advance for your support of these changes. We are excited to take committed investors and traders to their next level of success.

A.F. Thornton

Founder's Trading Journal

Will the Bulls Hold the Hill at 4000?

Feb 28, 2023 AF Thornton 0 Comment

Good Morning:

On the housekeeping front, we will have major announcements later tonight that will be effective tomorrow, March 1st. Included will be the announcement of our first trader Trader Intensive.
Suffice it to say that I have not had much of a life over the past few years as I dedicated my time to this endeavor. I had retired for many years before starting this company in late 2019.
And there are complaints on the homefront too. I have been working 18-hour days on average. I have ignored my health and exercise. When I look down, my feet have disappeared! I spend too many hours in front of 10 computer screens.
While we are grateful for our reception in the investment world, I cannot keep up with the emails and inquiries. In the end, time is our most valuable commodity. Family is the most important part of our lives. We don’t get this time back.
So my partner Michael and I are taking the website private to dedicate our time to our premium subscribers.
You may have noticed the name change. We want the name to better reflect the math, physics, and astrometry (kinematics) behind our algorithms.
As a private site, We can be more open in our discussions with Premium Subscribers and Founders Group members without the prying eyes of competitors.
You will receive the details later tonight. Prices for premium subscribers will rise, but there will be more services, privileges, and discounts for training programs starting next week. There will be a 7-day Free Trial for those interested.
Existing Premium Subscribers will be permanently grandfathered as prices rise over time. Once you are in, you are in. You will never pay more.
We know what we have created works, leading to triple-digit returns over the past three years. But subscribers also have to be able to execute the strategies practically, and we are improving that process.
We look forward to the changes, and we hope you will too.
On the Global front, Treasury Secretary Janet Yellen visited Ukraine yesterday. Add that to visits by Attorney General Merrick Garland and Teachers Union President Randi Weingarten.
These are just the non-defense officials we know about. Did this happen with the Iraq Wars? Of course not. How about Vietnam? No. I doubt it even happened in World War II.
I am suspicious that these highly unprecedented visits are about kissing Zelensky’s ring. Many believe (irrationally and without reading the biblical prophecies carefully) that Zelensky is the anti-Christ. I would identify the claim as incredible, except the unthinkable is always coming true lately.
More likely, these officials are flying over to pick up their bags of cash. Wires are traceable. This administration may be the most corrupt in American history.
Meanwhile, not much has changed on the market front. This week remains the Scheduled nominal 20-week Hurst Cycle trough turn window, and the Master Composite Cycle formally turns on March 3rd (Friday).
4000 is identified as the first pivot level – and continues to act as the fulcrum between bull and bear market behavior. I think we will take this level out later this year.
But with rapidly rising short-term rates back on the table, we could see some short-term fireworks as the market puts in the pivot low. The turn window remains; the pivot level remains in flux.
Last Friday’s inflation surprise still changes over the market.
What the bulls have on their side is that in the waning stages of an inflation-induced collapse, investors buy stocks to hedge inflation. The 1920s is a good analog.

A.F. Thornton

Founder's Trading Journal

Did the Sun Come Up Last Thursday? Now What?

Feb 27, 2023 AF Thornton 0 Comment

Good Morning:

This year as last, the stock market (as measured by the S&P 500 Index) continues to follow our Master Cycle Forecast with a correlation of 89%.
The pressure forecast compresses the most important cycles influencing equity markets into a proprietary composite of one to 60 years.
Year after year, following the forecast alone leads to triple-digit returns. Our main requirement is that the correlation stays above 80%
No strategy is flawless. When the correlation drops below 80%, the cycle tends to invert. The turn dates don’t change, but the direction of the Cycle does.
In such cases, Peaks will replace troughs and vice versa. We are always on guard for such a change; And that is where our Price Action indicators help guide us.
Beginning last Thursday with our proprietary Helio Algorithm, we entered a series of turn windows mostly associated with the nominal 20-week Hurst Cycle trough.

But did the Helios Algo deliver? Once in a while, if a “news” event intervenes, the market will temporarily derail. We saw that Friday with another surge in inflation as measured by Personal Consumption Expenditures.
But proving that the cause of market advances and declines has little to do with the news, the train usually gets back on the track.
You will have a chance to witness this in real-time. I always mark these temporary derailments on my chart as “news” lest they confuse me later when memory fades.
That is why It is imperative to keep a good trading journal to be successful in this endeavor.
So, for now, I expect the market to turn north again this week and advance through May, just as we forecast in our annual outlook.
And then the old saying “sell in May and go away” might be the new mantra. The market will stumble in May, and the bears may recover their footing.
We are still in our February 2nd sell / short signal. If you are short the market, I would cover positions sooner rather than later and prepare to go long again.
If we drop to half-day candles (see below), The market already has Algo and Momentum divergence buy signals if today’s price action closes at or above current Globex levels (4000 or above). These lower time frame signals don’t always follow through to the daily time frame, but it is a good ‘heads up” signal and plenty of reason to cover your short-positions.

If the buy signal triggers today, the first test of the new advance will be the 2/21 breakdown at 4060.
The Trading Room will be open on Tuesday and Thursday this week.

A.F.Thornton

Founder's Trading Journal

For Every Effect – There is a Cause

Feb 24, 2023 AF Thornton 0 Comment

Good Morning:

Did you notice the severe winter weather across the country yesterday? It was merely one symptom of predictable, increased solar activity.
As mentioned on these pages, a year ago we took a reliable weather prediction algorithm and gave it a few stock market tweaks. we then created our “Helio” algorithm, which identifies the peak intensity of this activity and predicts price reversals.
Not only did We back-test it for 10-years, we also tested it live over the past year. The results were beyond impressive.
We can even use the algorithm to identify 8-hour cycles for short-term trading signals. More on that another time.
So, did the signal we have been Publicly forecasting for a month in advance work yesterday? You be the judge:

We were closing the Trading Room yesterday when an astounding “V” reversal slowly began to take shape. Like a dunce, I thought the signal had already presented at midnight. Then I realized I had misread my notes and the signal actually reached its max intensity at noon EST. In retrospect, The reversal began right on cue.
The reversal must have been somewhat of a surprise to most traders. After three initial bull bars, our Trading Room started on a short signal yesterday. The sell-off was severe.
Typically, there is an 80% chance that the market would only recover to the mean and continue selling. But that did not happen.
I hesitated to take any short signals yesterday due to the anticipated Helio Algorithm turn. A temporary signal seemed inconsistent with the predicted “reversal,” which usually lasts a few days.
Ultimately, we could have worked both sides of yesterday’s trade – but one cannot know that beforehand.
I even had my doubts as the buy signal began to develop. It looked weak, even though the market was oversold and too far below the mean to be sustainable. Anyway, the rest is history.
I cannot remember seeing such a stunning “V” reversal in a very long time. All we needed to do from the buy signal was follow our Athene algorithm (formerly the Navigator).
So where does that leave us this morning? We have a slew of economic reports pre-market. The reports include the PCE inflation report. So the market will be volatile. And the reports have the power to negate the reversal, but typically they don’t.
And The Helio Algorithm turn is rarely a one-day wonder, though it does not give us a price or time target, just a reversal.
But here is what we do know. Price reached the bull trendline (October 13th, January 3rd) yesterday and found buyers.
That follows the bears’ February 21st breakdown with minimum follow-through yesterday, so bears are likely disappointed. Their follow-through is not ideal.
Yesterday was an outside trading range pin bar that shows hesitation at the 4,000 big round number, which has been an important price level for the past year.
There are targets below for the bears. However, the market still shows likely trading range behavior.
With tailwinds from the Helio turn, the bulls might continue to get a bounce to test the 2/17 breakdown from 4060.
Traders will pay close attention today to see how determined the bears are to continue selling.
If the bears begin to hesitate and buy back shorts, bulls will buy aggressively, increasing the probability of the market continuing higher to test the 4060 Breakdown low.
If the market cannot pierce the 4060 level on the way back up, it could continue the correction and test the January pivot lows around 3911.
Overall, the odds favor the bears getting disappointed over the next day or two. The market likely continues to go sideways around the 4,000 big round number. The lower probability event would be a strong downside breakout.
Our algos remain in a Macro Swing Sell (short) Signal from February 3rd.

A.F. Thornton

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