By: Jeff Cooper
Hit and Run Trading Morning Report - October 9, 2023
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The News Breaks With The Cycles Not The Other Way Around
“Everything in the universe moves in a rhythm. Nothing happens at random. The underlying factors are, in their turn, subject to the same rhythms as the final product. The whole is not the sum of the parts but both the whole and the parts labor under similar influences.”
George Lindsay, market technician extraordinare
“...crashes occur from oversold conditions that fail to produce upside traction. Crashes come from lows, not highs.
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 moving average the SPX should knife thru it with authority.
We are just in the eye of the hurricane according to cycles.
We are 15 years from the fall of 2008 When September, October November saw an Autumn Panic.
That year October 6th started 5 days of free-fall.
Why is 15 years important?
It is ¼ of W.D. Gann’s Master 60 Year Cycle or NINETY DEGREES square of this master 60 year cycle.
So we also have some synergy with the 2008 crash as well as the 1029 and 1987 crashes walked through in this space since July.”
The above is from Friday morning’s Hit and Run Report, The Eye Of The Hurricane.
Israel was founded in 1948.
25 years later was the Yom Kippur War in October 1973.
50 years later in October 2023 another Yom Kippur War erupted.
50 years is 600 months, a fractal of W.D. Gann’s Master 60 Year Cycle.
Is the 60 Year Cycle a big deal?
It was 60 years from 1941 and the attack on Pearl Harbor and 2001 and 9/11.
These are the only two times American soil has been attacked.
In the following 7 years from the October 1973 war:
Oil advanced from 5 to 50.
Interest rates went from 6.5% to 18%.
Gold went from 42 to 875.
The S&P 500 dropped from 108 to 60 in 12 months or 44%.
A similar decline from current levels projects to the 2400 region.
This ties roughly to the weekly closing low in the March 2020 crash.
In other words, a complete retracement of the advance since 2020.
Interestingly, the 1973 war did not come at the January 1973 top but well into the Bear Market.
It tied to the Secondary High.
The Secondary High of the current Bear Market occurred this past July.
Since July Hit and Run has warned about the Time/Price synchronicity with 1929 and 1987, we’re not going to go through the entire litany again here.
To briefly recap the main ‘square-outs’: the Autumn Panic in 1929 was 94 years ago.
On the Square of 9 Wheel of Time & Price, 94 aligns with/vibrates off mid-July and squares mid-October.
The high for the year in 2023 will be on July 27th which is 90 degrees/days square October 28/29, the 1929 waterfall.
The Autumn Panic in 1987 was 6 squared or 36 years ago.
36 aligns/vibrates off 481 (4810) the SPX all-time high.
As W.D. Gann wrote, “all major highs and lows are harmonically related.”
Let’s look at a daily DJIA for the 1929 crash.
Notice that following a break of the 320 low there was a one day rally. When the low day was broken with 320 being violated the crash was on.
In 1987, there as a large range outside up day on September 22.
The SPX poked below that low and had a ONE DAY RALLY on October 13th.
The next day the index broke support and the aforesaid outside up day from September with authority and the crash was on as the SPX plunged through its 200 day moving average.
No one knows whether a dramatic decline on the scale of 2008, 1929, 1987 or from the October 1973 intermediate term top (22% in 6 weeks), but the setup is there. The synergy is eerily there.
The current structure indicates the SPX is on the verge of a powerful 3rd of a 3rd wave down.
The July high was Intermediate Wave 2 top.
September 14th completed upward corrective wave 2.
The ensuing decline is only Wave 1 of Intermediate Wave 3 down.
Downside follow-through opens the door to 4000 projected in this chart shown two weeks ago.