Hidden Pivots

“The fluctuation of share prices is roughly proportional to the square root of the price.”
-Sir John Templeton

Last Thursday’s report showed the following daily SPX bearish Rising Wedge.

Typically Rising Wedges are bearish and typical they culminate with a false breakout from Climax Run.

This looks like what occurred on June 15^’s spike over the tops line of the formation.

Synergistically, the Climax Run started with a false breakdown May 24^th.

As above, so below.

So we have a Bear Trap on May 24^th and a Bull Trap on June 15.

In keeping with the presumption of a top, on June 16^th, the day after the “breakout” the SPX left a Gilligan sell signal.

This is a gap up to a new 60 day high with a close at/near session lows.

In addition, this was a Gilligan from a new 52 week high.

Below is an updated daily SPX .

It shows a turndown in the SPX 3 Day Chart last Thursday leading to a complete reversal to green with a close at session highs.

The market had the perfect set up for upside follow thru.

Allow me to explain.

In the context of the ongoing runaway move from late May, the normal expectation is for the first turndown of the 3 Day Chart to define a low.

Instead, the SPX gapped down on Friday, closing at/near session lows.

The leading QQQ exemplifies the failure to follow thru to the upside last week---as least so far---and the threat to the runaway upside move.

The Q’s turned up on Thursday (like the SPX) leaving an outside up signal reversal bar.

As offered on Friday, trade below Thursday’s low over coming days will trigger a Keyser Soze sell signal ---a Reversal of a Reversal.

Importantly this pullback must be seen in the context of a Time/Price square-out on the QQQ:

372/373 is square June 15/16.

Based on the Gilligan sell signals by the SPX and QQQ on June 16^th, my expectation is that this failure , so far, to gain traction off the turndowns in the 3 Day Chart opens the door to lower prices.

How low?

Let’s drill down to a 10 min SPX from the important May 24^th low to see the Hidden Pivots as revealed by the geometry of the Principle of Squares.

The Principle of Squares reveals the nature of price to move in a logarithmic spiral versus a straight line.

These squares occur naturally in 90 degree decrements.

The green horizontal lines show these 90 degree decrements down from the 4448 June 16^th high.

Notice the last push to 4448 defines 90 degrees down and what looks like a possible right shoulder of a mini Head & Shoulders top.

As well, the break below 4381 snapped the rising trend line from late May.

The SPX should be magnetized to 4310, which is 180 degrees down from the 4449 recovery high.

The takeaway is working down from the recent 4448 high defines the Hidden Pivots all the way through the advance proving the geometry of market.

Notice the first pullback into May 31^st/June 1^st.

Notice the breakout over the next ‘square’ on June 2^nd and the following consolidation.

Notice how the SPX coils at the next ‘square’ 4310 from June 9^th to June 12^th before breaking above the aforesaid 4310 region.

This is the benefit of my Square of 9 Wheel Of Time And Price: if you can’t measure risk, how do you define risk?

4310 is an important pivot because it is where the SPX went vertical on June 9^th.

Offsetting this last rip higher suggest a Buying Climax has occurred.

As well the 4310 region ties to where the 20 day moving average currently resides.

In a strong uptrend, the first test of the 20 day moving average should define support.

If it does not, the premise of for an immediate continuation of this uptrend is in jeopardy.

In summation,  we’ve outlined in this space over the last few weeks how cycles due to exert their influence to the downside starting in June and how mid-July is a significant time period for many reasons:

1929 is 94 years ago and 94 ‘vibrates’ off July 13^th.
33 is on the same vector on the Wheel as 94 and 33 years ago the market struck an important high on July 13^th falling more than 20% into October.

This July 13h is 90 degrees square October 13^th, the low for the move in 2022.

A weekly SPX from the all-time high shows the symmetry suggesting a false breakout in June marking an intermediate Wace 2 high.

The green horizontal line shows the Trap Door undercut of the June 2022 low.

But, notice how it defines important pivots going back to 2020. Bull and Bear markets have memories like elephants.

The red horizontal line shows the Trap Door throw-over of the August 2022 high.

Notice how it also ties to the important low before the high in 2021.

Hidden Pivots.

If a Trap Door has occurred here with the plug being pulled just as complacency reigned for a continued ramp into Quarter End,

Then there is a strong likelihood that a dramatic Wave 3 Decline is on deck.