By: Jeff Cooper

Hit and Run Morning Stock Report: May 5, 2023

It’s The Cycles, Not The News 

This morning’s jobs report arrives at a pivotal point in the markets based on the pattern of the indices and time/price synergies.

Allow me to explain:

1)      As shown at the start of the week, a rally to 4187 SPX could define an important high. This is because 4187 is 540 degrees up from the important March 13th low. As long-time readers and members know, 540 degrees is an important measure in time and price as it represents a true square, a cube.

The SPX struck 4187 exactly on Monday and was rejected with authority, dropping 139 points at Thursday’s low.

2)      A weekly SPX with a declining Tops Line connecting the January 2022 all-time high and the important early February 2023 high shows a breakout in April.  However, now the index is at a Point Of Recognition. It may be carving out a bullish backtest of the breakout point or it may fail, dropping back below the breakout point. If it fails, the implication is we had a false breakout and a fast drop could be on deck as fast moves come from false moves.

3)      Above I mentioned 540 degrees. In time this is 18 months. We are 18 months from the November 2021 NAZ all-time high. The SPX is also 90 degrees square the early February 2023 high this week.

Let’s look at the charts.

A daily SPX shows breakage below a rising trendline (green) from the March low. Monday’s high looks like a bearish backtest of this trend line that was snapped last week.

Following the break of the green trendline the index dropped to the recent breakout point (blue).

After the backtest of the green rising trendline from  the March low the SPX dropped  to backtest the blue trend line again yesterday.

Pulling back the lens to check the weeklies shows this blue trend line that is being tested is the same trend line connecting the January 2022 peak with the February 2023 high. This is the Maginot Line for the bulls, below which may signal a new leg down for the bear. This is seen on the weeklies below.

A 10 min chart  shows this Maginot Line was tested 3 times on Thursday.

The fourth time follows through. This is what I call a Rule of 4 Sell (or buy).

Maybe this morning’s jobs numbers will act as the Rule of 4 trigger.

If not a Snapback could play out until the next turning point flagged in this space for members.

Breakage below the Maginot Line will be coincident with a failure below the 50 day moving average.

This could open the door to a waterfall decline to an open gap in the 3980 region.

Offsetting this gap triggers a Jump The Creek continuation sell signal which in turn opens the door to a rising trend line connecting the October 2022 low and the March 2023 low.

Currently this line comes in at 3910.

Today is an Option Expiration. If the downside ball gets rolling the SPY could be magnetized to 400 for Opex Pinball.

May 5th vectors/vibrates off 401 on the Square of 9 Wheel

If the downside pinball turns out to be a snowball from hell, then is it possible 350 SPY could be seen?

A weekly of IWM, The Truth Teller, shows it is perched on critical support.

Breakage will trigger a weekly Rule of 4 Sell signal on sustained trade below 169.

On my Square of 9 Calculator, 169  is 190 degrees straight across and opposite May 5th, today.

Now this could mean IWM has struck a low for a rally phase, but a failure over coming hours/days points to accelerated momentum to the downside.

Notice that this 169 support is within the context of a large inverse Cup & Handle (bearish).

For the bears, it’s a matter of pay me now or pay me later: there are no triple bottoms or triple tops.

The 4th time goes thru.

Maybe something, maybe nothing but 13 years ago on May 6th, 2010 we had the infamous Flash Crash.

W D Gann was a big believer in anniversary dates.

These anniversaries aren’t necessarily just market dates.

For example on September 3rd, 1929, the stock market topped leading to an economic nightmare.

10 years later, Germany invaded Poland on September 1st, kicking off WW2 and a geopolitical nightmare.

On May 5th, 1937 the Hindenburg disaster occurred.

That is 86 years ago. On the Square of 9 Wheel Of Time & Price, 86 is on what is called the Cardinal Cross.

These numbers are the ones that align on the Spring and Autumnal Equinoxes and on the Summer and Winter Solstices.

According to WD Gann, they are “exalted” numbers because of this and perpetuate more powerful vibrations.

So there was a disastrous event 86 years ago with 86 being exalted.

At the same time, today is a powerful Lunar Eclipse which often act as triggers or magnifying events in markets. This is documented by Steve Puetz. It is called the Puetz Crash Window.

Crazy thing is there is an indicator in the market called the Hindenburg Omen. It is a crash signal.

The stock market generated a first Hindenburg Omen observation on Wednesday, meeting all necessary criteria.

Once we have a second H.O. observation within the next 30 days, there will be an official H.O. stock market crash signal on the clock.

The last time the market triggered an official H.O. was April 12th, 2022.

We have a debt ceiling crisis on the radar.

We have a regional banking crisis swirling.

We have geopolitical tensions boiling.

15 years ago in May the market struck a recovery high that marked the pivot high preceding the Lehman Brothers  Crash.

15 years is 180 months/degrees, so opposition and vibrating off the Great Financial Crisis.

May 2023 is a pivotal time.

The News Breaks With The Cycles, not the other way around.