By: Jeff Cooper
Hit and Run Morning Stock Report: 09/23/2022
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The market is getting close to dropping to new lows for the crash of 2022-- below the June 16th bottom.
Individual names that showed superior relative strength and were “safer-havens” during the rally off the June lows are giving up the ghost.
Names include BILL, ZS, AMD which struck new lows on the year on Thursday…and NVDA.
Buyers are on strike seemingly waiting for a test of the June low.
Remember back in August we said money managers were trying a Hail Mary play trying to squeeze the market higher hoping to bail out their year, but that if the play failed they could get “sacked” behind the line of scrimmage.
That’s what’s going on. They are running for the exits to try to rescue a dismal performance from becoming direr.
The tape was more crimson than the averages reflected.
TLT was the culprit…plunging on Thursday; however, the chart is looking like a 5th wave bottom is on deck.
It could start a 2 to 3-month rally in October.
During the stock market crash of October 1987, the 20-year Treasury Bond rose 13 points OVERNIGHT.
It would not be surprising to see VIX/UVXY spike in concert with TLT if the capitulation we envision plays out.
Depending on how dramatic the coming stock market plunge is, we could see TLT and TNX pop strong and quick.
Probably not 13 points but sharply.
So I have TLT and TNX on the long radar…especially on reclaiming Wednesday’s highs.
As to the SPX you can see the value of technical analysis when the market is under duress: our 3900 level worked like a charm in rejecting the market on Fed Day.
In sum, Ghost Lines that I will show on the SPX predict targets could arrive into our cycle-cluster of September 29-to October 4th.
The Ghost Lines and cycles are in agreement which powerfully validates the Rule of Multiples.
Interestingly the next Bradley Model turn date is October 6th.
Monday’s report will recap the 90-year cycle as to months which targets late November.
This is from the major low in 1842 to the major low in 1932 to another 90 years later here in 2022.
Of course, early October also ties to the major low in early October 2002.
So the 20-year and 90-year cycles are pointing strongly down.
This is why stocks can’t get out of their way as Time converges here.
The SPX is reaching a Measured Move from the August high.
That could theoretically perpetuate a bounce; however, if we are unable to move back over 3800-3840, then the next move is likely going to be a straight-line move to the June low.