By: Jeff Cooper
Hit and Run Trading Morning Report - September 7, 2023
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3 Of 3 Of 3 Shock Wave
“Well it’s been building up inside of me
For oh I don’t know how long.”
-Don’t Worry Baby, The Beach Boys
“If you only knew the magnificence of the three, the six and the nine, then you would have a key to the universe.”
-Nikola Tesla
There are a lot of reasons to think the July peak was the top of Intermediate Wave 2.
Let’s recap a few big ones:
The duration of the decline from early January 2022 SPX top the October 2022 low mirrors the time from the October 2022 low to the July 2023 high.
From the January 2022 peak to the July 2023 high is 18 months.
This is a true square a cube.
Why?
A 3 dimensional square is a cube with 6 sides of 90 degree angles or 90 X 6 = 540.
540 days/degrees is 18 months.
This is a fractal of the 18 year Eclipse Cycle which was important to W D Gann.
In researching my DVD course Unlocking the Profits of the New Swing Chart Method covering the SPX from 1941 to 2004, I discovered many time swings of 18 months, up and down, and many price swings of 540 degrees.
Let me show you one example of the Power of the Cube that knocked me off my feet when I found it prior to the 2007 top.
In June of 2007 I noticed that SIX full revolutions of 360 degrees up from the 2002 SPX low of 768 was 1576.
I reckoned that if 540 degrees is an important square because it is the six sides of a cube, then six full revolutions of 360 degrees would be like a master cube.
Allow me to explain.
Think of it like a Rubik’s Cube that has multiple squares on one side with the entire cube itself being a Master Cube.
In other words if 6 sides of a square is a cube then 6 revolutions of 360 degrees is a Master Cube or square.
The proof is in the pudding.
From the early October 2002 SPX low of 768 to the 2007 July high of 1576 is precisely 6 full squares up in price.
The SPX did not hit 1576 in July 2007. It struck 1576 in early October…precisely SIXTY MONTHS or 5 years later.
If 6 revolutions in price is important so is 60 days, weeks, months and years.
From the start of the secular bull market in 1949 to the bottom of the GFC in 2009 is 60 years.
Moreover, 768 and 1576 (SPX) both square early October.
This is what allowed me to state in October 2007 that the market was going to crash.
It did, plunging into a primary low on November 21st, 2008.
That would have interested Gann as the NDX all-time high occurred on the anniversary of the 2008 crash with a crash UP into the November 22, 2021 all-time high.
That was a Monday Key Reversal Day. The closing high was Friday, November 19, 2021.
Anniversary dates. You can’t make this stuff up.
So the September 1, 2023 anniversary of a 25 year high in 1929 is a big vibration… a Shock Wave if you will.
The market crashed from SEPTEMBER 2018 to December 2018.
60 MONTHS from September 2018 is September 2023.
The market has been down sharply since September 1st.
If July represented the top of Intermediate Wave 2 (Intermediate Wave 1 down was January to October 2022) then the leg down from July to August 18th is arguably wave 1 down of Intermediate Wave 3.
A small wave 2 followed into the September 1st high.
So stay with me here.
Let’s assume the a wave 3 OF 3 down started on September 1st.
This is a legitimate presumption because we can count 5 waves down from September 1st.
This means that following the next bounce the SPX will commence a 3rd of a 3rd of a 3rd wave decline.
That’s the heart of a potentially dramatic decline which opens the door to the low 4200’s.
Not so coincidentally the SPX 200 day moving average is 4160 and rising.
How do I get 4200?
From the July 4607 high, 360 degrees down is 4338.
The August 18th low for the decline was 4336.
Another 180 degrees down from 4607 for a 540 degree cube decline is 4208.
You can’t make this stuff up.
In a nutshell the mind of the market is math.
Clearly, if we are on the cusp of a 3 of a 3 of 3 wave decline, the expectation is that the 200 day moving average would be hit.
It would be fitting if a 3rd of a 3rd of a 3rd wave down began near the anniversary of the high prior to the Macdaddy of Declines, the 1929 crash. That high was September 3rd.
That was 94 years ago.
On the Square of 9 Wheel 94 squares mid-October.
If we get another slow motion car crash like the plunge from January 2022 then it could take through October to early November to wash out.
However if the Principle of Alternation plays out, we could get a genuine Flash Crash occurring in September. Remember the Gann Panic Window is in full swing here in September counting from the July top.
If the King and Queen of the Ball, NVDA and AAPL, become a source of cash, think the unthinkable.