By: Jeff Cooper

Hit and Run Trading Morning Report - July 20, 2023

Is This An Historic Top?

“If you only knew the magnificence of the 3, 6 and 9, then you would have a key to the universe.” Nicola Tesla

Yesterday’s Hit and Run showed the analogue comparing January 26, 2018 and July 19th, 2023.

Most of Wednesday’s session that analogue looked “so far” away.

However, the leading SMH, the semi-conductor index, did not make a new  recovery high and closed down on the day in the spirit of the pattern from the January 2018 top.

For example, SMCI left a huge signal reversal bar, a Gilligan’s Island, off 20 points having been up over 10 points.

RMBS failed to capitalized on a mini Cup and Handle and rolled over and threatens to snap its 50 day ma.

AMD gapped up 3 points and closed off 1.50.

To mention a few.

The leader, QQQ struck a new high for the move and closed down on the session in the spirit of the January 2028 peak.

Now get this:

As we know, yesterday was the anniversary of the primary high in 2007…16 years ago or 4 SQUARED years.

What are cycles but repetitions. So numbers of time or price squared are by definition a cycle of repetition.

Wednesday’s QQQ close was 385.65 or rounding 386.

What is 386?

It was the DJIA all-time high on September 3rd, 1929 prior to the historic crash.

In other words, the date of the primary, orthodox peak in 2007 vibrates off the DJIA all-time price high in 1929.

1929 saw an historic crash in October followed by the start of the Great Depression.

2007 saw a false new high in October followed by the start of the Great Recession.

Obviously this is happenstance. Right?

So, as W D Gann wrote, anniversary dates are important. It will be important to see what Wednesday’s signal reversal bar ushers in especially as the leader of the pack, the Q’s struck a recovery high synchronous with the 386 price high in 1929.

Why July 19th exerts a powerful vibration:

July 19th aligns with 386 the DJIA pre-crash all-time high in 1929.

It was the primary high in 2007.

It was 6 days from the July 13th pre-crash high in 1990.

It was 78 years from 1929 to 2007.

On my Square of 9 Wheel 78 is square March 6th, the Bear Market low after
the 2007 top.

The market is not random. It is geometric.

July also ties to the cycle of 66 and 666.

Allow me to explain. The aforesaid key January 2018 top was 66 months ago.

The bear market ended in 2009 on 3/6/09 SPX 666.

666 weeks from March 6, 2009 (3 and 6 and 9) is December 2021.

The NAZ topped in November 2021. The SPX topped in early January 2022.

Split the difference and you get December 2021.

Geometry proves the significance of the current price range.

From the SPX  March low of 3809 to yesterday’s 4578 high is 769 points.

Half the range is 384.50 points.

Adding 384.50 points to the 3809 March low gives 4193.50

This ties to the breakout point in May.

This ‘proves’ the market is at an inflection point.

And we already know that mid-July is pivotal.

In summation, the SPX shows a Measured Move from the late May breakout.

From that May 26th breakout, the market has run up to July 19th , the end of the 49 to 55 of the Gann Panic Window.

In this case it was a Buying Panic.

Downside follow thru opens the door to 4450-60 and the open gap from July 12th.

Below that opens the door to 4300.

As well July 22 is a Time Pivot: July 22 marks the point where the SPX move up off the October 13, 2022 lows is equal to the drop from the January 2022 peak to the October 13th low.

The concern is an impulsive (versus a corrective decline) points to the idea that a top here is consistent with a B Wave high.

In other words the January to October 2022 decline was an A Wave followed by a B Wave to this mid to late July 2023 time frame which would be followed by a vicious C Wave decline.

A C wave decline should at least mirror the 1327 point SPX drop from January 2022 to October 13th 2022.

If we just struck a high at 4578 that projects to a slide to 3251.

This ties to the Breakaway Gap from February 2020 where the Covid Crash started.
Mr. Market has a memory.

The concern is pretty much 8 stocks are responsible for 90% of the SPX rally.

If the market turns down these Generals will be a source of funds and a virtuous circle will become a vicious circle.

Is this an historic top or will a correction prove to be a buyable pullback?

Either way caution is warranted.