Lowering the Boom

Lowering the Boom

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

AF Thornton

Website: https://tradingarchimedes.com

A.F. "Arthur" Thornton is an expert in logic, risk/reward quantification, market fractals, pattern recognition and asset class behavioral analysis with 34 years devoted to developing algorithmic and quantitative trading systems. In addition to trading his own capital, Mr. Thornton designs custom algorithmic and quantitative trading systems for a small and exclusive group of exceptionally qualified traders.


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