By: Jeff Cooper
Hit and Run Morning Stock Report: January 6th, 2023
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Turning Point
On November 30, 2022, the SPX set a closing high of 4080 (408).
That high was tested 9 sessions later on December 13th when the index Pinocchio’d the prior high and reversed with authority plunging 300 points in five sessions into 3800 on December 19th/20th.
On the Dec 21st Winter Solstice, the SPX rallied to 3890 turning its dailies up for the first time since the slide started from 4080.
The next day the index plunged to 3764.
Those two days form the bookends for a 126-point triangle the SPX has been locked in through Thursday.
I can’t help but think that today with the Jobs Report we may break out of the range--especially as today is the first weekly opex for 2023.
With today’s catalyst, we may see this 10 trading day range exceeded.
If the triangle breaks, is it possible we get a drop to the 3700 strikes or a run to the 3900 strikes?
We must also be prepared for a whiplash with a Triangle Pendulum signal being triggered.
This is where price breaks one way out of a triangle and then reverses back into the body of the triangle continuing through the opposite side.
When this plays out the result is often times accelerated momentum.
A drop to 3700 ties to the idea of a right shoulder of an inverse Head & Shoulders.
A drive to 3900 backtests the 50-day line.
On Thursday, the SPX looked as though it might break the triangle but it remained intact by the end of the day.
Thursday night as I write this, the futes are green as the night monkeys are testing short-term resistance.
While the market has remained in a narrow range for two weeks, the swings overnight and during each session have been broad but going nowhere fast…like throwing Jello for distance.
Whichever way the SPX ultimately trends out of this triangle may continue into Feb 11, plus or minus.
Why?
The all-time SPX high is 4818 (482).
Checking my Square of 9 shows that 482 squares February 11.
Additionally, February 11th is 180 degrees straight across and opposite August 16th, the important rally high at 4325.
February 11th is also 120 days/degrees from the October 13th low for 2022.
Synergistically, geometrically, there is a strong likelihood for the Feb 11 region to be a turning point.
Moreover, I can’t help but think the market may be magnetized to that time frame.
We may see the market trend in one direction or the other into Feb 11th.
Conclusion. Today may be the pivot for that turn because January 6th aligns with/349 (3490), the low for 2022 on October 13th.