By: Jeff Cooper
Hit and Run Morning Stock Report: May 22, 2023
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“God does not play dice with the universe.”
At the end of 2021, Wall Street's biggest firms divulged their outlooks for 2022.
Goldman Sachs predicted the S&P 500 would hit 5100 by years end.
BMO Capital predicted 5300.
Wells Fargo chimed in with a forecast of 5300.
Instead, stocks plunged nearly 30% within 9 months, finishing the year 1000 points lower at 3839.
In October 2021, we wrote, “The market will get hit hard in January kicking off a brutal bear market.”
It was the worst first half for the market in 50 years.
Why were so many of the Wall Street experts so wrong?
It’s easy to make a prediction.
It’s hard to be right.
There is a method in which I made the prediction which few are familiar with.
If you want to know about timing market turns, it has nothing to do with economics or earnings.
It has almost nothing to do with the Fed.
Most of the technicals the vast majority of traders look at are junk.
However, there is a method that few use that tells the tale of the tape and the really big turns.
It gave me the week of the 2002 Bear Market low.
It allowed me to call the final rally failure on October 31st, 2007 when I wrote an article “It’s A Dead Man’s Party.”
It allowed me to call the crash low on November 21st, 2008 at precisely 941 SPX.
Notably, the leading NDX struck it’s final bottom on November 21st, 2008 while the SPX made an undercut low on March 6th, 2009.
The NDX carved out a double bottom/higher low in early March 2009.
Our technique identified the March 6th, 2009 SPX final low.
There is one trading tool on the planet that integrates Time and Price allowing one to forecast accurately.
On the Hit and Run Private Twitter Feed this morning I reveal exactly how that November 21st 2008 forecast was made.
The technique is pointing to a momentous opportunity over the next 3 months.
Out method pointed to a top in February 2020 to be followed by a crash.
On March 23rd, 2020, we wrote that the market had bottomed and the SPX would advance to 4000 over the coming year.
The SPX hit 4000 on April 1st, 2021…and continued to extend.
What is the forecast now?
For a month we’ve been predicting a turning point for May 17th-19th.
We’ve covered a litany of reasons in this space.
Let’s look at a few more reasons.
WD Gann wrote that all major highs and lows are related harmonically which means they vibrate somehow off each other.
Allow me to explain how that relates to the current time period.
The range from the SPX January 4th, 2022 all-time high to the October 13th, 2022 low is 1327 points.
On the Square of 9 Time and Price Calculator…the only tool that integrates time and price, 1327 is square May 17th.
As Gann wrote, “When time and price square-out, expect a change in trend.”
Anniversary dates, solar returns, were very important in Gann’s methods.
May 17th is the 231st anniversary of the NYSE.
On the Square of 9 Calculator, 231 is square July 8th.
July 8th was the great low in July, 1932.
This is very important as we are in the great 90 year cycle.
1932 was 91 years ago…and it’s always + or -. The market is not a fine Swiss watch.
There are a great many indications that POINT to this July being momentous from a late May pivot.
Let’s take a look at the leading QQQ to see if time and price are telegraphing anything.
The Q’s bottomed at 254 on October 13, 2022.
254 vectors/aligns with May 19th.
One full revolution of 360 degrees up from 254 is 322 with 339/340 another 90 degree decrement higher and square May 19th.
QQQ hit 338.20 on Friday, May 19th before reversing to close down on the day.
QQQ is in a runaway move following last weeks breakout.
Continuation above 340 opens the door for a POSSIBLE climax run to 358.
QQQ struck an all-time high on November 22nd, 2021 and May 19th is precisely 1 ½ revolutions around in time or 360 + 180= 540 degrees. This is a cube, a true square-out, as there are 6 sides in a cube with 6 angles of 90 degrees (90X 6 = 540).
The Q’s have surged to fulfill a 50% retrace of the 2021/22 sell-off.
As well It has carved out a Measured Move: the 54 point rally off the March low mirrors the 54 point January advance.
These are just a few of the synchronicities playing out between Time & price at this juncture.
While Gann was an astrologer believing that time is governed by the wheels within wheels of the planets, he also stated that in the markets, math is more important than astrology.
Gann’s forecasts of stocks and commodities were based on Time and what he called the Time Factor.
He wrote that Time Turns Trend:
“Many people want to know what method I use to determine the future indications on the market. I keep charts of the various active stocks and also a set of averages. My charts are different from the charts of the average statistician because they are based on my discovery. I have discovered a ‘time’ factor that enbales me to determine important tops and bottoms one year or more in advance. My annual forecasts by this ‘time’ factor, which enables me to determine important tops and bottoms one year or more in advance. My annual forecasts on stocks, issued in December for ten years past, have proved remarkably correct.” Truth Of The Stock Tape, 1923
Gann referred to 60 years as his Master 60 Year Cycle.
90 degrees or ¼ of this 60 year period is 15 years.
15 years ago on May 19th, 2008, the stock market struck its pre-Lehman Brother’s Crash peak.
Maybe something, maybe nothing, but 15 years ago in March Bear Stearns went belly up the same weekend that SVB failed in March 2023.
In summation, at the end of Bear Market rallies, the vast majority believe in a “return to normal”.
It is Mr. Market’s job to make market participants think the train has left the station and they must chase after it just as the market is about to turn down for the count.
Many tech names such as NVDA, NEWR, META, SMCI, and CRM have rocketed, fueling full-frontal FOMO.
This is what happened in the spring of 1930 after the 1929 debacle at a 50% retrace like QQQ.
Of course in 1929-1930, the U.S. was the greatest creditor country on the planet. The dollar was good as gold.
Now we’re teetering on default. And raising the debt ceiling is just a band aid on cancer.
U.S. Treasury credit default swaps are the highest we’ve ever seen.
NAZ call volume is the highest in 8 years.
Bank deposits and M2 money supply are experiencing the most severe drop since 1929.
The descent from Mt. Everest is kills more than the ascent.