By: Jeff Cooper
Hit and Run Trading Morning Report - November 16, 2023
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Don’t Follow Leaders Watch the Parking Meters
The magenta Ghost Line show on the private twitter feed yesterday acted as resistance on Wednesday as the index tailed off.
That being said, the 7 point gain on the index masked reversals in many generals.
META left a Key Reversal Day from an all-time high.
AMZN left a Key Reversal Day from a Megaphone Top produced since early August.
NVDA struck our 503 square=out level pre-market producing an all-time high and satisfying a possible Megaphone Top. It too left a Key Reversal Day.
TSLA flirted with the next square up from 234 which is 249.
CRWD and PANW left Gilligan sell signals and got clocked further after PANW reported shedding an addition 15 points.
One may have assumed under the current buying stampeded that PANW was a no-brainer into earning’s.
One would have been wrong
After reporting PANW closed at241.50 well below below its 20/50 Bowtie at the 245 region.
ANET left a Gilligan sell signal as well.
The oils took gas.
TDW and CEG.
The tape was more lackluster than the 7 point SPX gain led one to believe:
ORCL, RMBS, DUOL and ZS.
This has been one of the sharpest spikes I can recall.
Many technicians are quick to say that you don’t get rallies like this in Bear Markets.
However the crash in 1987 was the biggest one day decline ever and that was in the middle of a Bull Market.
Moreover, we’ve never been here before.
The cult of the Fentanyl Fed and the Alzheimer Algo’s whose idea of a long-term trade make Hit and Run players blush, have discombobulated markets.
Yes, Virginia, this time is different and there is no Santa Claus.
Although I believe Jerome will be stuck in a chimney in 2024.
Allow me to explain.
The SPX struck a primary high on January 22, 2020.
The index sold off and made a false new high before crashing.
Markets like to make false new highs and false new lows before exploding in the opposite direction.
From January 22, 2020 to February 2024 is 49 months or 7 squared months.
Notice that half this cycle ties to the January 2022 all-time high.
As you know 7 squared any time frame is pivotal…just as 49 years from the January 1973 false breakout peak gives January 2022.
52 months is synergistic with 52 weeks in a year.
52 months from the January 2022 all-time high is early May 2024.
If I am correct about a bottoming process from November 21/22 into (late?) January which is 180 degrees straight across and opposite the important late July 2022 secondary high, then the 90 degree period from late January thru earl May 2024 is going to be critical.
If a new high is going to play out this is the window I think it will do so because May 2024 is so important.
The Fed was founded in 1913.
109 years later is 2022 when the bear market started because the Fed had to reverse course acknowledging inflation was not transitory.
“Transitory”, “Contained” “Transitory”.
On the Sq of 9 Wheel, 110 vibrates off the 481/482 peak
Opposite 481 is Nov 22.
That’s one reason I think this Nov 21/22 is important.
In 2024 we will be 111 years from the start of the Fed.
111 is a corner number on the Sq of 9.
Corner numbers/dates are natural and more powerful.
111 squares May 7th, 2024.
So, the period from January to May 2024 I think will be the End Game.
If there is one more hurrah for the bull this is when it should take place within the context of not so much a blow off but Death Spiral of Volatility.
I say this because volatility precedes trend change and this will have been 14 years from the 2008-2009 low---two periods of 7 years.
This is validated by 2015-2016, seven years from 2008-2009.
My expectation is the 3 month or so period from January to May 2024 may see a hyperventilating tape, a series of spikes and air pockets that mirror the 2022-2023 tape but cramming it into 3 months.
We got a taste of that so far in October/November with a dramatic plunge and a surge.
May 2024 is going to be an important turn.
What we saw in 2022 and 2023 was just the dress rehearsal for a longer secular bear market that could be devastating.
Even if the price damage is done in a few years ala the 1930’s and the 1970’s , the time factor could prove diabolical.
As Gann wrote, “Time is more important than price.
There is no question in my mind about a secular bear market.
The only question is whether we are ready to rollover now or we have this Death Rattle Hurtle after a bottoming process into January 2024.
Underpinning this cycle is that May is 180 degrees opposite the 2024 election.
There is already a lot of divisiveness in the country and this cycle hitting 6 months before the election gives a lot of time for mayhem.
Interestingly the election of 1912 just prior to the implementation of the Fed brought Woodrow Wilson to power who ultimately was no longer competent to be President due to a stroke. His wife was calling the shots.
Of course shortly after the Fed was created WW1 started in 1914.
Next week we’ll highlight a myriad of war cycles due to exert their influence this decade.