By: Jeff Cooper
Hit and Run Morning Stock Report: July 14, 2023
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The Whites Of The Bulls Eye
The market has stretched to the maximum acceptable level for me to maintain the imminent B Wave top thesis.
If we push higher from here it will be another extension in the 5th wave of a B Wave which would make it a bigger Ending Diagonal than mentioned earlier this week.
In that case, we push somewhat higher possibly to 4550 and then see a sizeable decline, thereafter pointing us to 4600 for the wave 5 extension---IF we don’t top here.
I connected the double tops in December with the February high and extended it.
Notice how it hits the mid-June high precisely.
On Thursday the SPX broke above the tops line.
However, we have a full 5 wave count off the March low and a reversal back below this tops line could telegraph Jump The Creek sell signal: a drop below Thursday’s open gap.
Fast moves come from false moves so if Friday’s “breakout” proves to be a false move it could easily offset Thursday’s gap opening the door to the green rising trend line from the gap up at the beginning of June which currently resides at 4400.
In other words a 100 point SPX drop could occur here without doing anything to the uptrend.
Except for the fact that we have a full 5 wave count and have hit a SEVEN month tops line.
Seven is the number of panic. Buying Panics can turn into Selling Panics if everyone who wanted to buy has bought and there are no bids until meaningfully lower that entices pullback buyers.
Fast drops often play out from Ending Diagonals or Rising Wedges such as the current pattern.
As well, the SPX shows 3 little Drives To A High potentially.
If the short-term green trend line snaps it opens the door to a test of 4350 and the red trend line from the important March low.
The presumption is a 4350 would act as support; however, breakage of this 3 point trend line will trigger a Rule Of 4 Sell signal.
That would open the door to 4050, the bottom rail of the purple trend channel.
That’s a 10% drop….and that’s the bull case.
There are further cycles and time/price synergies pointing to a turning point and the fact that the market is hyperventilating
Into this setup should underscore the idea of a Buying Climax.
Let’s take a look
You are familiar with Gann’s use of 7 as the number of time and panic.
From the 2002 bear market low, 7 years out is the 2009 bear low.
7 years from 2009 is 2016.
In February 2016 the SPX struck a major low producing a 1000 point advance in 11 months.
7 years from 2016 is 2023. We didn’t make a bottom in 2023 which suggests a low to low to high cycle is on the table---
A high in 2023.
So we are 14 years from the 2009 low here in 2023.
On the Square of 9 Wheel the number 14 points to July 19th.
That is the primary high in 2007.
A sharp downdraft played out followed by a nominal new all-time high in October.
From that nominal new high false breakout, we got the Great Financial Crisis.
They say the markets never wrong.
Did the market have it right in October 2007 at the all-time new high?
What does the market think it knows now?
Does the market have it right now?
All trading is contextual.
Just because the market MAY have it wrong doesn’t mean to fight the tape.
It’s one thing to be intellectually bearish, and wait for the whites of their eyes; it’s another to throw short logs on the fire.
We should be looking into the whites of the bulls eyes. I thought we saw the bull blink with the Bearish Island Reversal last week.
In addition to July 19th being the 16 year anniversary of the 2007 primary high, July 13th is the 33 year anniversary of the 1990 pre-crash high.
As well July 8th is the 91st anniversary of the major 1932 low.
We have a slew of Gann anniversaries on the table in July.
Speaking of pre-crash highs, 1929 was 94 years ago. On my Square of 9 Wheel, 94 aligns with/points to July 13th.
Is that all voodoo cycles?
Well it was 58 years from 1929 to 1987.
On the Square of 9 Wheel, 58 is square October 29th, the day of the 1929 panic.
If you knew this relationship in 1987, you could have deduced that a crash might occur as the square-out pointed to the 1929 crash.
You can’t make this stuff up.
Yesterday’s report walked thru a multi-faceted Time/Price synchronicity.
Thursday squares-out with 448/449 SPY.
448/449 vectors October 13th, the low day for the decline off the ATH.
July 13th is straight across and opposite the 349 October 13th low
Green July 13
Blue 448/449
Pink Oct 13
Red 349
The above Time/Price square-outs are as much as a bulls eye as I can remember for a turning point.
Should we get a turning point 360 degrees down from 448/449 is 360 or 3600 SPX.
In conclusion, the SPX began to ramp higher 6 weeks ago on June 1st.
Next week is week 7 which ties to completion.
If the SPX strikes a high here, the tail end of the Gann Panic Zone is September 3rd , the pre-crash high in 1929.
If we were to roll over, could this be telegraphing that early September is a crash?
This possible mirror image synergy with the 94 year square-out here in July from 1929 is fascinating.
If the Rising Bearish Wedge breaks, caution is warranted.