By: Jeff Cooper
Hit and Run Morning Stock Report: September 28th, 2022
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Relief Rally Setup?
The market surged on the open following Monday’s run the stops drop on the run-off.
Then another fade job which frankly took me by surprise.
That said, the SPX poked its nose above the 3710-15 key square region and dove downtown.
When it broke below the 3685 idealized support level, it tacked on another 65 points of crimson.
In sum the reversal finally saw the index satisfy a new low for the year on an undercut of the mid-June low.
What’s interesting is that the hourly SPX shows a possible Gann W V Bottom pattern.
This is where you have a W or double bottom and then an undercut leaving a V.
At the same time the hourly SPX shows a possible Megaphone Bottom pattern.
Both of these are in the context of a POTENTIAL weekly Soup Nazi long setup.
This is where you undercut a low within a 20 bar lookback (with at least a 4 bar interval from the low) -- in this case, the June low and reverse back up through the initial low and continue higher.
In sum, given the extreme oversold NYMO on Monday, the setup for a rally seems viable.
But, fast moves come from failed setups.