By: Jeff Cooper

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

You Can’t Make This Stuff Up

40 is a key Gann cycle/pattern. Remember that Gann was a Bible Belt Christian and believed the Bible was a book of coded numbers.

40. Moses was on Mount Sinai for 40 days and nights.

Moses lived forty years in Egypt before God selected him to lead his people out of slavery.

Forty years after Jesus' crucifixion, the Roman Empire destroyed Jerusalem and its temple according to Jesus' prophecy.

God flooded the earth for 40 days.

In sum, 40 is considered a period of TESTING.

The subtitle of Gann’s coded novel Tunnel Thru The Air is

Or Looking Back From 19  40.

Those who have a Square of 9 Wheel know the significance of the placement of 19 and 40 on the Wheel.

Well,  19  is a cycle as 19 squared ties to the 360 degree circle.

360 divided by the last whole integer, 9, gives 40.

Following the initial decline from the peak on September 3, 1929, the market staged a reaction rebound of about 40 days.

Actually, 40 days from September 3rd gives October 13 and the DJIA rebound ended on October 11.

That was the last pivot high before the crash.

Following the initial decline from the peak on August 25, 1987 the market staged a reaction rebound of about 40 days as well.

Actually 40 days from August 25, 1987, is October 4th. The final rally high prior to the 1987 crash was on October 2nd.

You can’t make this stuff up.

Of course, those counts were from all-time highs, but I believe taking the count from a secondary high is viable.

So, from the August 16, 2022 rally high, 40 calendar days give September 25th.

I am not saying the market has to or will rally into September 25th.

For all I know, the rally could end right here.

After all, the SPX is in the Minus One/Plus Two sell position.

This is the first really bona fide  Minus One/Plus Two sell setup since the August 16 high.

Why?  Because the August 26th -1/+2 sell setup occurred in the first hour-- the setup couldn’t even carry through the day as Thursdays did.

That happens. It exemplifies extreme selling pressure.

What’s interesting is that September 21 is the Fall Equinox, which W D Gann wrote was one of the most important turns of the year in any market.

This was proved in a study by legendary technician, Paul Macrae Montgomery.

On the daily SPX below I show a declining trend line off the August 16 peak and a rising trend line off the June/July low.

They intersect somewhere in time from mid-September to September 21st.

You can’t make this stuff up.