By: Jeff Cooper

Hit and Run Morning Stock Report: November 15th, 2022

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:

  1. The structure lends itself to a powerful wave 3 decline as shown in yesterday’s report.
  2. 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.