By: Jeff Cooper

Hit and Run Morning Stock Report: June 14, 2023

The Death Of ‘Don’t Fight The Fed’ Or Just Another Mania?

This week QQQ  cleared our long standing 358 projection from the October low.

In so doing it has eclipsed  an important trend channel.

I connected the October low and the late December low and then paralleled a line off the low in March---the low prior to the first significant bear market rally.

The question is whether this is a sustained breakout or a Pinocchio?

At the same time, the SPX has reached a pivot point.

In so doing it has cleared a square-out projection of 4320 -4330.

The normal expectation in both instances would be for a pullback…at the very least.

However, it seems like the laws of ebb and flow have been repealed.

What’s going on?

One of the factors is that there is no debt ceiling until after the next election.

The government can print what it wants based on the recent “debt deal’.

Consequently, this has led to the death of one of Wall Street most famous maxims: Don’t Fight The Fed.

I know…you say the market is celebrating the end of Fed rate hikes; however, history shows that the end of a rate hike cycle

ties to a market decline.

Mix in AI Mania and no restraint on money printing and you’ve got a powerful momentum cocktail for stocks.

And they are partying like it’s 1999.

Keep in mind there was no catalyst that popped the tech bubble in March 2000.

Other than Time and Price.

Maybe something, maybe nothing, but….

We are 279 months from March 2000.

Interestingly on my Square of 9 Wheel 279 vectors/vibrates with July 4th and January 4h…the SPX all-time high.

July 4th is 540 days/degrees from the January 4th, 2022 ATH.

This is a perfect cube in time.

Yesterday a few generals were shot…AMD, SMCI and ORCL.

AMD gapped open to a new swing high but immediately reversed below the last swing high on May 30th.

Both days left Gilligan sell signals: gap opens to new 60 day highs with closes at/near session lows.

AMD also left a Key Reversal Day yesterday.

This morning it is bouncing on news that AMZN may use one of its AI chips.

Drilling down to an hourly shows 3 swings to a test of the May 30 peak.

Pre-market this morning, AMD is testing 128 where it fell out of bed yesterday.

Let’s take a look at SMCI that shows an hourly Head & Shoulders top pattern.

Below yesterday’s low opens the door to 222 region.

Below 222 opens the door to 208 and the 20 day moving average which hasn’t been tested since SMCI exploded thru it on May 3rd.

ORCL exploded in front of earnings this week; however yesterday it reversed leaving a large range Gilligan.

These sell signals/setups on the above 3 generals don’t always lead to immediate downtrends, but often times when looking back months later, it shows that these signals defined major trend changes.

While there is a lot of hope that the market is broadening out, when the generals start to turn tail, the troops leave the battlefield.