By: Jeff Cooper

Hit and Run Trading Morning Report - August 3, 2023

Bull Hits The Wall

In Tuesday’s report, we wrote that this week is 144 Fibonacci months from early August 2011 when the market plunged after a Fitch downgrade of US debt.

We went on to say that August 9th is 144 Fibonacci days/degrees from the March 13th, 2023 low and noted that on the Square of 9 Wheel 401 SPY squares out with August 9th.

Yesterday was 180 days/degrees from the February, 2023 peak and Wednesday’s downdraft underpinned this natural cycle.

270 days/degrees… NINE months from the major October 2022 low is August 13th which ties to dates in the first paragraph.

We were 40 weeks down into October 2022 and 40 weeks up into late July 2023 as in the subtitle of WD Gann’s coded novel, “Tunnel Thru The Air OR LOOKING BACK FROM 19  40”.

40 days and 40 nights is a Biblical cycle in days, weeks, months, or years.

You’ve all heard me say before that every 40 years or some something bad happens in the economy and market and every other 40 years something really bad happens.

We must remember that the leading QQQ high for the move is 388.

388 aligns with 94 which is important because 94 years ago is 1929.

As well 388 ties closely to 386 which is the pre-crash high in 1929.

You can’t make this synchronicity up.

90 degrees down on the Q’s is 368.

They closed at 375.

The 50 day moving average on the Q’s is 365.

Downside follow thru is likely:

The Q’s closed below their 20 day ma for the first time since May 4th….90 days/degrees ago.

Additionally Wednesday was the biggest decliner since February. It follows that momentum will produce

A consecutive drop.

The Q’s closed right on a little 3 point trend line and the angle and downside follow thru opens the door to the 50 day moving average at 365 ties precisely ties to a trend line from the important March 13th low.

Keep in mind the 3 Day Chart is pointing down. The rally off last weeks low never even traced out two consecutive higher daily highs: this is a change in character with the Q’s diving below a prior circle 3 Day Chart low…. the market is weak.

In sum to validate that an important top has arrived, potentially Intermediate Wave 3 (Intermediate Wave 1 down= decline into October 2022), we want to see strong follow through to the downside in coming days… particularly through the 4450 region.

This is the Breakaway Gap that signaled the last ditch rally into late July. It is the little double tops in June.

Consequently, breakage below Phil D Gap will trigger a Jump The Creek sell signal and indicate that the Gann M A Top pattern shown in July  defines an important top,

The SPY came within a whisker of closing below the 450 trigger for our  September puts.

So now we have to punt because we don’t want to buy them in the hole on another possible strong down close today.

This is what the market does. It’s goooood.

I’ll tweet as to the puts.

90 degrees down from the recent SPY 459 high is 438….and the 50 day moving average.

Considering we have a Key Reversal Day followed by yesterday’s Breakaway Gap, I think the 50 day line will be struck in coming days.