By: Jeff Cooper
Hit and Run Trading Morning Report - October 6, 2023
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Eye Of The Hurricane
As market participants awaited this morning’s numbers, the SPX traded in a narrow range late Thursday leaving a double down inside pattern in the spirit of a Crouching Tiger buy setup.
At the same time IWM rebounded to close above the key 171 level.
As I write this morning it is trading up at 172.10
The NFP report is crucial to financial markets as it offers a snapshot of the U.S. employment, excluding the volatile agricultural sector.
Its data informs perceptions of economic health, influences Fed monetary policy decisions, impacts consumer confidence and spending and provides insights on wage inflation.
Due to its significance, NFP releases can lead to substantial market volatility, especially if the figures differ from expectations and its repercussions can be felt across global markets.
We cannot know what the September jobs numbers will show until they are reported nor how the financial community will interpret them.
However we can and do know that the tone of this market has been among the weakest on record over the past five weeks, as only seven sessions since August have closed with more advances than declines.
Only two of those seven were four-digit numbers of net advances.
Markets remain in a downtrend and while we anticipate significant immediate volatility in reaction to today’s report, that response will, as is the case each month, be relatively short-lived and is highly unlikely to produce a change in TREND.
In sum yesterday the SPX rebounded from near the 200 day moving average to the upside 4270 pivot just as it did on Thursday.
It looks like the SPX is set for a third test of 4270 this morning.
Will the third time be a charm for the bears or the bulls?
Since September 14th when accelerated momentum showed up the SPX traded above a prior days high on two instances:
1) Sept 20th which left an LROD (Large Range Outside Down Day) from the 20 day moving average.
2) September 28th and 29th which produced my Minus One/Plus Two sell setup. The indes closed above a prior high for the first time only since September 14th on Sept 28th.
The next session (9/29) it gapped up and rolled over.
Extraordinary weakness in the midst of oversold conditions.
Yet we know that’s how crashes occur---from oversold conditions that fail to produce upside traction: Crashes come from lows, not highs.
That said, the SPX 200 day baby is being protected by the Algomatics and The Hand.
The bulls think of it as a buying opportunity; the shorts as a discreet place to cover.
Once both groups are disabused of their perceptions revolving around the 200 day it should knife thru it with authority.
We are just in the eye of the hurricane according to cycles.
Gann’s Master 60 Year Cycle is comprised of THREE cycles of the Jupiter/Saturn conjunction which is 20 years.
We are 15 years from the fall of 2008 when September, October, November saw a crash.
That year October 6th started 5 days of free-fall.
Why is 15 years important?
It is ¼ of Gann’s 60 Year Master Cycle or NINETY DEGREES of this 60 year cycle.
So we also have some synergy with 2008 as well as 1929 and 1987 crashes walked thru in this space previously.
In May 2023, Jupiter aspected the North Node in Aries… the beginning of the Zodiac and Gann’s Zero Point. The shadow of the eclipsed casted doubt on Jupiter symbolizing growth and clarity.
The last time they aspected or met each other in Aries was in May of 1929 leading up to the historic crash.
Both years saw blow-moves from May lows into the summer and an Autumn Panic.