By: Jeff Cooper
Hit and Run Morning Stock Report: November 10th, 2022
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The News Breaks With the Cycles, Not the Other Way Around
“On my command, unleash hell.” The Gladiator
As Hit and Run warned yesterday, if Tuesday’s intraday low broke downside acceleration would follow.
The above daily SPX shows the mid-August secondary high labeled Wave 2.
The subsequent rollover started Wave 3 down.
By my count Wave, 1 of 3 ended on October 13th where we got a large range Key Reversal Day.
Wave 2 of 3 down culminated at the end of October. We suggested as much at the time with a morning report titled, “It’s A Dead Man’s Party.”
From there, Wave 1 of 3 of 3 down unfolded defined by a turn down in the 3-Day Chart.
The 3-Day Chart turned up on Tuesday and the SPX took its cue putting in wave 2 of 3 of 3.
If the above count is correct Wave 3 of 3 of 3 to the downside commenced on Wednesday.
Notably, the SPX closed just below a trend line connecting the October 13 low and the November 3 low.
This morning we get the CPI.
If it is hot, we’ll get a Breakaway Gap sealing the deal on 3 of 3 of 3 down….the most powerful wave.
As such it would not be a shock to see the October low and the 3600 region tested today/Friday.
Not just because a dramatic 3 of 3 of 3 suggests a 100-point plus waterfall decline but because 2008 Analogue looms large.
But, interestingly 360 (3600) conjuncts/vectors November 10/11.
Those of you who have been reading me for some time, are familiar with my maxim---the news breaks with the cycles, not the other way around.
And we certainly have news…the kind of news that causes concern and contagion: a mess in Crypto Land.
You all know what’s going on. This is what happens when you mix debt with leverage.
What no one is talking about yet is that Crypto is really no different than Derivatives.
There is no intrinsic value in either. It’s all ethereal.
The plug pull yesterday in the oils that have been a big prop to the SPX suggests The Margin Man is knocking on the door. When you can’t sell what you want to, you sell what you have to.
Hence, OXY, DVN, EOG, and LNG caved on Wednesday.
In sum, the news is riding the cycles hard.
The question is how hard.
Is it hard enough to be systemic?
Confidence in the system is front and center…and precious metals have a front-row seat.
As offered a week ago before gold and silver miners ramped, the metals were poised to explode out of a SEVEN-month corrective coil formation in the context of a 7-year cycle.
We are in the first pullback/check-back following this breakout, the next turn-up should see a run for the roses.
We know that November 16th is 90 days/degrees from the August 16th secondary high.
We know that November 16th is 180 degrees straight across and opposite from 482 (4820), the all-time high.
Given the above wave structure, the 2008 analog, and the Time/Price vibrations according to my Square of 9 Wheel, if the market is going to tank, this is where it should happen.
Today’s CPI is wrapped around the Crypto Lehman moment like a pig on a spit at a do-or-die Luau for the Fed.
Breakage by the SPX below the October 13th Key Reversal Day over the coming hours/days will finally see a full-fledged capitulation.