By: Jeff Cooper
Hit and Run Morning Stock Report: October 27th, 2022
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Reversal
Another choppy day with the SPX gapping down then triggering a Jump the Creek buy on trade through the open gap, which perpetuated a spike toward the 3900 region. This ties to a 50% retrace of the August peak to the October low.
Then the market gave up all the gains reversing 50 points from the intraday high to low and closing near session lows at 3830 well below the key 3854 “square”-- 540 degrees up from the October low.
The SPX, DJIA, NAZ and Russell 2000 all left Lizard sell signals on the day.
This is a new 10 day high with the open and close near the bottom of the sessions following a run up to new 10 day highs.
The SPX reversed after kissing its overhead 50 day line.
The following chart shows the market may be topping right here.
If so, the structure indicates a dramatic decline ahead…a powerful 3rd of a 3rd wave plunge.
This is in keeping with the pattern from 2008 when the secondary high was in late May versus the mid-August secondary high in 2022.
In sum, at this moment, the stock market is in a similar cycle last seen in 1842 and 1932, both crashes during economic Depressions.
Interestingly, those crashes came 90 years apart with 2022 being 90 years from 1932.
This is what WD Gann called the Great Cycle.
It is 1 ½ revolutions of his Master 60 Year Cycle.
Just as 540 degrees is 1 ½ revolutions of 360 degrees.
From October 10, 2008 through election day Nov 4, the DJIA staged an impressive 13.9% rally.
However, from that election day high, it crashed 22.5% over the next 17 days bottoming temporarily on November 21sth.
As of yesterday, the DJIA has rallied just over 13% from the Oct 13 low of 28,661.