By: Jeff Cooper
Hit and Run Trading Morning Report - September 29, 2023
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Sign of the Bear
“I suspect we’ll see some upside continuation from here for one or two days.
At the very least we should clearly get trade above Wednesday’s high today (Thursday)---for the first time since September 21st.
A second higher daily high will produce my daily Minus One/Plus Two sell setup.”
The above is from Thursday morning’s Hit and Run Report which showed the following chart defining short term resistance.
Yesterday’s report went on to say “Upside follow thru targets the declining 50 hour moving average at 4323 which ties to 360 degrees down from the 4607 July high at 4338.”
Stocks may get a temporary tailwind from a rally in bonds…a drop in yields.
But temporary could be a sharp multi-week Squeeze Play.
Clearing 91.50/92 opens the door to 97 which is 90 degrees up from Thursday’s low.
TLT clearing the pivot at 92 could see a very fast move to 97---a mirror image fold-back of the two recent Breakaway Gaps to the downside.
A sharp rally in bonds won’t benefit stocks as it will stem from a flight to safety.
Indeed it may be an “orchestrated” to save bonds, crash stocks.
Said another way, to save banks, crash stocks.
There is a solar eclipse on October 14th.
It has some similarities to the solar eclipse in 1929.
We first flagged this synergy with 1929 this past July, noting that 1929 is 94 years ago with 94 aligning with July.
July proved to be the high for the year in 2023.
Moreover it may have been a Secondary High to the January 2022 peak in a fractal of the April 1930 Secondary High.
April 1930 is 180 degrees/days opposite October 1929.
Likewise July 2023 is opposite (540 degrees: 360 PLUS 180) the January 2022.
The Angle of Attack to the downside since this past July mirrors the decline off the January 2022 all-time high.
Importantly, the SPX has not turned its 3 Month Chart down since June 2022.
That led to an eventual closing monthly low 3 months later in September 2022. (Oct 2022 was an upside reversal month).
It will be easy for the SPX 3 Month Chart to turn down in October. It simply needs to trade below this weeks low.
If that should happen, without the market stabilizing, and we head lower, it will be the Sign Of the Bear (SOB).
Caution will be warranted if the 3 Month Chart turns down and the market accelerates.
Monday’s report will review the history of this pattern.
The U.S. is facing a possible government shutdown this weekend.
It would be a debacle.
The influence related to a solar eclipse can occur before the event itself.
October 11th is in the cross-hairs as it squares the so far low of the Bear at 3490 (349).
Importantly this October is opposition to a Great American Eclipse on April 8th, 2024, a key SEVEN years from the August 2017 Great American Eclipse.
That eclipse marked a period starting 7 years of intense volatility.
In sum, the SPX turned its Weekly Swing Chart up just once since the July top.
That was in late August.
We could get another turn up early next week on trade above whatever this weeks high is.
If this occurs the ensuing action will be critical to gauge.