By: Jeff Cooper
Hit and Run Morning Stock Report: November 15th, 2022
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Rising Bearish Wedge
Monday’s high is now going to be important in the near term.
This is based on the double square-outs shown yesterday-- in the SPX and the QQQ.
As long as we remain below yesterday’s high, my expectation is that we can engage Phil D Gap in the 3850 to 3820 region.
That’s the gap from Thursday’s 100-point spike on a puny CPI number.
Even the Fed had to remark “the market over-reacted.”
You think? 100 SPX points in a minute.
It must be said that below Phil D Gap may be the mother of all Jump the Creek sell signals.
A Jump the Creek is trade that offsets an open gap with authority.
I say that for two reasons:
- The structure lends itself to a powerful wave 3 decline as shown in yesterday’s report.
- The pattern of lower highs and loss of momentum on each rally to the 200-day that registered Overbought Oscillator sell signals.
The DJIA has led the rally off the September 30th closing low.
So what’s it saying now?
It shows a clear 5 waves up from the September 30th closing low.
As well, since November 3, the 5th wave looks like it’s carved out a Rising Bearish Wedge.
The tip of this possible Rising Bearish Wedge may be a Pinocchio of a declining tops line from February.
If so, breakage below the ‘wedge’ ties to a drop back below the magenta tops line.
A swift retreat could follow given the culminating 5 waves and ending wedge.
In sum, if today’s PPI triggers another rally, the Street may be ready given last Thursday’s riot and may stampede. If so, I would not be surprised to see such a stampeded turn tail….with today being a Bradley turn date.