By: Jeff Cooper
Hit and Run Trading Morning Report - September 6, 2023
Need help? Check out the Hit and Run Success Guide.
The Truth Teller In Flagrante Delicto
Yesterday on the private twitter feed I stated:
“If I am correct about a leg down…or even a waterfall decline, cycles suggest it should bottom by October 19th to November 22nd .”
Here’s what I’m looking at.
The NDX topped on July 19th. 90 days/degrees later ies to October 19th.
That is a natural square-out in time.
As well, as you will recall, July 19th was the primary peak in 2007, fifteen years ago or 90 degrees of Gann’s Master 60 Year Cycle.
October 19th was Black Monday in 1987---36 or 6 squared years ago.
So this is one factor as to synergy with October 19th/1987.
At the same time the Gann Panic Zone counting from July 19th ties to the September 11th region.
The SPX topped on July 27th. 90 days/degrees later ties to October 27th.
This is synergistic with the October 29th crash in 1929 and the secondary peak in October 2007.
Remember that we are 94 years from 1929 and 94 is square mid-October.
So there is a lot of vibration with potentially dramatic turning point this October.
My instinct is it is not a high but that the market will be magnetized lower in this time frame.
We are 36 years from the October 1987 crash and 36 is straight across and opposite November 22, the NDX top in 2021.
As well, November 22nd is 180 degrees straight across and opposite 480/481…the SPX all-time high
Big vibrations with November 22nd..
The Gann Panic Zone for the SPX from the July 27th high ties to September 17 + or -.
Mid-September is 180 days/degrees straight across and opposite the important March 13th, 2023 low.
The Hunt For Red September/October/November.
This is Gann 60 MONTHS (a fractal of the 60 Year Cycle) from the waterfall decline in the fall of 2018.
The year 2023 vibrates off November 20 which ties closely to the November 22nd NDX high 2 years ago. 720 degrees.
In sum I think the market will be magnetized lower into November.
A low could come earlier, but cycles may exert their downside influence thru November 22nd.
Tuesday’s session produced a significant decline of 2.11% for the RUT 2000 ETF, IWM. The Truth Teller.
This is the equivalent of a 700 point drop for the DJIA.
Declines swamped advances.
A daily IWM for 2023 shows what looks like a continuation Head & Shoulders top with a Neckline at 183.
Yesterday IWM knifed thru its 20 and 50 day moving averages after installing a possible right shoulder.
IWM looks headed to 185, a bottoms line connecting the May and August lows.
Below 185 opens the door to the Neckline at 183.
Below the Neckline at 183 projects to 168.
If the green bottoms line from the March low is lost at around 179, it suggests a waterfall decline to 168, the Head and Shoulders projection.
My Square of 9 Wheel supports this setup.
The last swing high was 199 on July 31st.
Interestingly, IWM held up longer than the SPX and IWM.
The Truth Teller was lying.
Be that as it may 199 squares out with July 31st for a perfected Time/Price square-out.
180 degrees down from 199 is 171---close to the 168 H & S objective.
By definition, 191 and 171 are on the same vector, but the Wheel’s coup de gras may be that both numbers vector October 29th….the crash day in 1929.
Blue=199, green =July 31, red =171, purple-October 29
Stocks shrugged off the decline, Torpedo’s, include IONQ, UPST, ORCL, DUOL, TSLA, GTLB and ROKU to mention a few.
Homebuilders got demolished. Names include our LEN, PHM and DHI. Other names in the group such as IBP and BLD got taken to the woodshed.
This is not a good development for the economy as the housing sector is a big driver.
Conclusion. It’s only one lower low in IWM from its circled 3 Day Chart high on Friday.
The SPX has traced out 2 consecutive lower lows.
There is a strong likelihood that it will turn its 3 Day Chart down today.
It’s 50 day line at 4472 looms large.
It must be said that the SPX weeklies are in the Minus One/Plus Two Sell position.
A decline below its rising 20 week moving average at 4368 warrants caution.
The SPX has not violated its 20 week m.a. since March.
Sustained breakage below the 20 week suggests an important peak is behind us most likely the high for 2023.