Hit and Run Morning Stock Report: August 9th, 2022

By: Jeff Cooper

Raise Cash

The rally from June 17th is culminating.

Monday the market moved into SEVEN months of overhead supply counting from January 24th, 2022, and reversed with authority from 4186.62. (more on that below) skidding to an intraday low of 4129.

Significantly, Monday morning’s spike to 4186 is just above the last important peak in the SPX…the June 2nd high of 4176.90.

Consequently, Monday’s high may have been a Pinocchio (false move) above the important early June high which was a significant peak as when the index broke below the June 2 lows, it water-filled …punctuated by 3 Breakaway Gaps to the downside…to a panic low.

It was a panic low of sorts accompanied by extreme pessimism but not witnessed by the kind of Volume Reversal Washout that attends many Selling Climaxes.

As well the VIX and UVXY never really spiked.

In trading, you can’t swing from one limb. From my perch, Time and Price are the final arbiters.

Markets don’t exist to accommodate. There’s always a T-Rex in the ointment.

A spike in the VIX and UVXY may occur in the next leg down. Or they may be “broken." I don’t know, but I suspect there is an event of some sort that WILL see them balloon…at some point.

The key phrase is “at some point”.

Yesterday’s reversal from an Up Opening Monday Spike, and what I called Full Frontal Fomo on the private Twitter feed, is negative.

It left a Lizard sell signal-- a new 10-day high Topping Tail.

As well, Monday is often to the week as the first hour is to the day. It sets the tone and oftentimes defines Trend Days…up or down.

Whether the morning run for the roses was orchestrated in order to allow big money to distribute by getting the Street to chase, is unknowable, but it certainly has the whiff of an ambush.

Someone, somewhere probably knows something.

Be that as it may, whether Monday marked THE top of the rally from June 17th or it is a pullback prior to a push later in August remains to be seen.

However, the trend is bending. In a bear market, trends can break fast, the “bend” doesn’t always allow a graceful exit.

Moreover, Monday’s reversal came from a synergy of 7’s with the QQQ’s reversing from a picture-perfect kiss of a big declining trend line for 2022.

See QQQ chart from yesterday here again

This is enough of a warning to raise cash in and of itself.

However, Monday’s reversal in QQQ also occurred from a Time/Price square-out.

325 is 90 degrees square August 8th.

You can’t make this stuff up.

The Rule of Multiples is in play:

In addition, the drive to overhead resistance SEVEN months from the early January ATH, we have a Time/Price square-out that perpetuated a reversal.

In other words, the Q’s respected the time/price synergy.

In sum, if the market pulls back I suspect the SPX could trade down to the 4000-3950 region.
IF the agenda is for another rally attempt following a pullback, cycles put August 24th in the cross-hairs.


W D Gann was a big believer in the power of anniversary dates. This has to do with the Solar Return.

August 24/25 was the pre-crash top in 1987.

We are 35 years from 1987.

On the Square of 9 Wheel, the number 35 is straight across and opposite September 3.

An opposition.

September 3, of course, was the pre-crash high in 1929. Another late August/early September anniversary.

This also ties to the secondary high in 2000 from which the NAZ did a DJIA 1930-1932 lookalike contest losing some 86 % before a bottom was struck.

There was a lot of synchronicity between those two crashes in time and price. Something I would not lightly dismiss.

As well, remember that Monday was 4900 (70 squared days from the March 6, 2009 low).

The initial drop in the SPX bottomed on January 24th.

August 24th is SEVEN months from January 24.

Consequently, IF the market can mount a further rally, that time frame will be pivotal.