By: Jeff Cooper
Hit and Run Morning Stock Report: January 5th, 2023
Rorschach & Wall
Whether we like it or not, as traders, we’re in the pattern recognition business-- at least we should be.
Wall Street tries to sell earnings because they can’t tell you that billions of dollars are moving on a price or time pattern/cycle.
An outside day/inside day is one of the more reliable breakout patterns.
This is what we have on the SPX.
Tuesday was an outside day followed by yesterday’s inside day.
Interestingly, I looked back starting in January of 2022 and I do not see one other such pattern.
What is also interesting is that this pattern comes within the context of what looks like a Bear Flag with the market ready to dive.
Looking at this Bear Flag last Friday most traders would not have bet that names like META, PYPL, and HELE would have been explosive.
Yet Hit and Run hit pay dirt with these killer longs.
The last 10 sessions have been like throwing Jello for distance.
However, if the outside/inside pattern follows through according to Hoyle, the SPX should squeeze to 3900.
Making it more interesting is that the recent closing SPX high was 4080 (early December) or 408.
On my Square of 9 the number 408 squares today.
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