By: Jeff Cooper
Hit and Run Morning Stock Report: January 11th, 2023
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SPX Closes Over 50-Day Line With Divergences and On Weak Volume
Early on Tuesday’s session, the SPX followed through from Monday’s downside reversal, testing the breakout pivot of the now infamous triangle from the December Winter Solstice.
The daily SPX below shows the backtest of the pivot with a red arrow.
It wasn’t as clean a test and turn to the topside as the dailies may suggest.
A 10 min SPX shows Tuesday’s whipsaws.
It wasn’t clean unless you are familiar with The Maestro, W D Gann, and his W V Bottom pattern.
Tuesday’s rally accomplished something that the SPX has not been able to do for nearly a month--it closed back above its 50-day line.
That said, it’s got its work cut out for: A 50 % retrace of the range from the December 13th high to the December 22 low is 3933-- the horizontal black line.
Notice the resistance region at this price going back 7 weeks.
Prior resistance becomes new support.
As well, as tweeted last night, there is a clear negative divergence visa vis the MACD.
Consequently, it may be rejected if the SPX pushes higher today to kiss resistance.
The bull scenario is that the SPX is tracing out a b wave higher following a c wave down from Monday’s 3950 high. That means we can expect a c wave decline which could be a bullish little wave 2 corrections on the heels of Monday and half of Tuesday’s wave 1 to the topside.
However, if the SPX should pull back, and violate the body of the triangle, it could open up a can of whoop-ass on the bulls with Thursday’s CPI looming large.
We took out the top of the triangle on Friday and if we get breakage below the bottom of the triangle.
To recap, 360 degrees up from the 3764 triangle low is 4013.
An a-b-c pullback may set up an extension to 4013.
A close over the 50% retrace (the horizontal black line) opens the door to 4013.
Reclaiming and holding above 4013 opens the door to 4141 which is 540 degrees up from the 3764 low.
For new members, 540 degrees is a very important measurement in time and price.
In the time it is 18 months.
18 months from the orthodox high in late November 2021 is late May 2023.
540 degrees in price is a cube.
This is because a true square is a cube with 6 sides.
6 sides with 90-degree angles. 90 X 6 = 540 degrees.
I am focusing on the week of February 13th.
Why?
The all-time high was 4818 or 482.
482 is square February 13th and February 13th is 120 days/degrees from the so-far bear market low on October 13th.
As well, the October 13, 2022 low was 120 days/degrees from the important mid-June, 2022 low.
So we have a 120 day/degree low-to-low cycle in play.
Mid-February is the SEVENTH week of the year.
It’s going to be something. Is it a high or a low?