By: Jeff Cooper

Hit and Run Trading Morning Report - October 24, 2023

Market Instability Breeds Panic Selling

A Saros cycle is the eclipse cycle which runs 18 years and 22 days.

The world just saw a solar eclipse with the same Saros cycle that preceded the 1987 market break by 26 days.

We are 36 years from 1987 or two Saros cycles.

Black Monday on Oct 19, 1987 occurred 26 days after the September 23, 1987 solar eclipse.

This year 26 days after the October 14 solar eclipse lands on November 9th, a Thursday.

On Saturday the 11th of November, Mars (The Roman deity of bloodshed violence and war) opposes Uranus planet of revolution and chance.

This is referred to as the Mars/Uranus market crash cycle.

This is because every crash has occurred when Mars and Uranus are opposition.

That does NOT mean that every time Mars and Uranus oppose each other there is a crash, but rather that every crash has occurred during this aspect.

Consequently, if we get a flush or a flash crash here in October the vast majority of market participants may believe we have bottomed…that the coast is clear….just before the hammer drops in earnest.

This November 22rd is the 60th anniversary of JFK’s assassination.

This is the Gann Master 60 Year Cycle.

As offered last week, I would not be surprised to see something happen around that time period that is a shock to the U.S.---something that changes the fabric of our country.

Remarkably November 22 is 180 degrees straight across and opposite 481 (4818) the SPX all-time high.

So there is a lot of interesting synchronicity on the clock.

The low CLOSE for the bear market so far was on October 12th, 2022 at 3577 or 357.

360 degrees down from 480 is 397 (3970).

Another 180 degrees down is 357 (3570). So November 22 aligns with the low close for the Bear.

Where might panic selling send the SPX?

A monthly SPX connecting the March 2009 low with the March 2020 panic lows ties to 270 over coming days/weeks.

Notice that a declining Bottoms Line connecting the June and October 2022 lows intersects this fall at the 2700 region.

A Bottoms Line connecting the March 2020 low with the October 2022 low currently resides at the 4000 region. This ties roughly to the Head & Shoulder top projection (with July 2023 “the top”.

A failure below 4000 opens up the door to a drop to 3400…or an undercut of the October 2022 “so-far” Bear market low.

In sum downside continuation/acceleration following Friday’s turn down of the 3 Month Chart is the Sign of the Bear.

Yesterday, the SPX dove below the key 4208 level. This is 540 degrees down from the July 2023 high.

The index rebounded closing above 4208.

However, we closed below the 200 day moving average for a second day as well as scoring a second consecutive close below October 2022/March 2023 rising trend line.

We know that 4208 is important because it is 540 degrees down from the 4607 July high---a true square, a cube drop.

Another 540 degrees down is 3828, near the March 2023 low.

In other words if the Wheels come off this thing, a complete retracement of the March/July rally is on the table.

383 (3830) squares October 31st.

Markets are oversold for the short term. They COULD have a sharp one to three day rebound at any point.

But the overall trend remains DOWN.

Markets currently present an unusually high risk for short term traders, long or short.

While they are very oversold and MAY have a routine counter-trend rally driven by bargain hunters and short-covering at any point, the door to a sudden panic selling phase is open.