By: Jeff Cooper

Hit and Run Morning Stock Report: May 12, 2023

Timing Is Everything

“Time is more important than price.”
-WD Gann

Earlier this week we walked through the Puetz Crash Window and its criteria.

Below is a chart showing the setup 4 previous times since 1929.

If we’re going to get a serious downdraft, the time window I am looking at is the week of May 17th and the first week of June.

We’ve gone over the week of May 17th:

  • The anniversary of the NYSE
  • Alignment with the year 1929 on the Square of 9 Wheel,
  • Its squaring out with the 1327 point SPX range since the SPX January 2022 ATH (1327 is square May 17th),
  • Its alignment with 481, the SPX ATH price (4818).

As to the first week of June, we have a Bradley Turn Date then.

June 6 aligns with 666, the price low of the Bear Market in 2009.

Speaking of timing being everything…remember that the all-time 4818 SPX high points to May 1st, 2023.

Rounded down 4818 is 482.

482 days from the January 4th all-time high is May 1st, 2023.

The SPX spiked into May 1st and reversed sharply.

Is it carving out a right should under the cover of FOMO under the surface?

DUOL mention a few

It’s more than interesting to those of us who use the magic of the Square of 9 Wheel, that Congress has raised the debt ceiling 78 times.

The number 78 is 180 degrees straight across and opposite June 6th.

Is that “D Day”?

In addition, the SPX struck an important low in December 2022.

90 days/degrees later it struck an important low in March.

Another 90 days/degrees later is June.

My expectation is we are getting a low to low to high cycle.

When we look back at the market at the end of the year I think it will look like a first half rally and a second half decline.

Connecting the December 2022 low and the March 2023 low gives us a Ghost Line at 3850.

I think breakage below 4040 opens the door to 3850.

Whether that drop is an elevator or an escalator, I don’t know, but I think there is a strong likelihood of it playing out.

The SPX has been carving out a Rising Wedge, a bearish pattern, since it’s October 2022 low which underpins the idea of a strong downdraft on deck.

I think this year’s rally has been a Wave 2 corrective rally following 2022’s brutal Wave 1 decline.

What better way do disabuse the vast majority of market participants that the coast is clear than a blow-off in select names?

FOMO is doing an encore, but it will take a “bow”:

My expectation is the SPX will test/undercut its 3491 low in October 2022 before the year is over.