By: Jeff Cooper
Hit and Run Morning Stock Report: January 10th, 2023
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A High Or A Low?
As offered Monday morning:
180 degrees up from SPX 3764 December 22nd low is 3884,
270 degrees up is 3950
370 degrees up is 4013
The SPX struck 3950 precisely, up 50 points on the session, and reversed sharply pulling back to this Monday morning’s open gap.
On Friday the index broke out above a two-week triangle at 3875 from a low of 3802 on Thursday.
It was magnetized to the 3900 strike for Opex.
The SPX tacked on another 75 points above the breakout pivot of 3875 running to 3950 yesterday.
So there were a number of ways that 3950 presented resistance on Monday.
An hourly SPX shows Friday’s breakout and Monday’s Spike & Reversal.
The rising 20-hour moving average is at 3884.
Theoretically, the SPX could backtest Friday’s breakout pivot at 3875.
However, if it carves out an impulsive 5 waves down---especially if it dives below 3875, get more defensive.
Below the bottom of the rising blue line will trigger a Triangle Pendulum sell signal, opening the door to 3600.
Fast moves come from false moves and a failure of Friday’s breakout given the structure of the market points to a test of 3600.
Alternatively, if this pullback holds support, there is a strong likelihood we see a push to 4013 or 360 degrees from the recent swing low.
A bullish pullback following that playbook with an ensuing drive-thru 4013 opens the door to 4300 and a test of the August high.
We must be mindful of a run to 4000 + into the end of this week that is NOT followed by a bullish pullback
This week's end is 90 degrees from the October 13 low for 2022.
Will this week establish a high or a low?