By: Jeff Cooper
Hit and Run Trading Morning Report - November 17, 2023
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Run Up Into Prospective Turning Point
The SPX dailies turned down yesterday for only the second time since this run started in late October.
The last turn down on 11/9 closed on session lows as the index backtested the 50 day line and exploded the following day.
Yesterday the exuberance ball couldn’t stay underwater with the SPX reversing green into the bell.
The normal expectation is/was a pullback into the open gap from Tuesday, but speculative juices don’t follow logic.
It doesn’t make sense because it doesn’t make sense.
Yesterday’s turn back to the topside is in keeping with a micro count from the low which suggests a new high for the move will satisfy 5 waves.
That being said we have not closed back below 4497 which is 540 degrees up from low which keeps the upside door potential open theoretically.
The recurring pattern of advancing SPX on weak or negative breadth re-emerged on Thursday as SPX
Was higher for the 13th of the last 14 sessions since Oct 27th.
Those 14 sessions produced an advance of more than 10% or 421 points.
Despite the historic rise, net breadth was negative on 43% of those days, including Thursday.
Despite the gain in SPX yesterday, breadth was remarkably negative.
I emphasize this extraordinary internal weakness because it is highly unusual for a surge of this magnitude (+10% in 3 weeks).
The normal expectation is that the net declines are telling us something essential and we are setting up for at the very least a test of the low.
This would be the bottoming process I mentioned earlier in the week into January.
The October low is precisely 90 days/degrees from the late July high.
January will be 90 degrees from the October low and 180 degrees from the July high.
I expect a high to low to low cycle to emerge.
In addition to the anomaly of an SPX advance of more than 10% in a short period, nearly half of the sessions did so despite net declines.
Some net drops were extreme like November 9th when 1372 more issues declined than advanced on the NYSE.
GDXJ is set to come out.
It broke out on November 3 and pulled back.
Yesterday it challenged horizontal resistance, a Neckline
At the 35 strike.
Above this upside pivot opens door to the 200 day moving average.
The second mouse is set to get the cheese.
42 is 90 degrees up from the 30.50 October.
That’s where it’s going between now and January.
GLD shows two up-gaps this week after entering the weekly Plus One/Minus Two buy position.
The 3 Week Chart was pointing up when it traced out 2 consecutive lower weekly lows (just barely) to start the week.
Clearing and sustaining above 186 opens the door to 195 short-term on the Square of 9 Wheel.
That’s 90 degrees up from this weeks low.
As well 95 is opposition November 20-22.
In sum, the market is moving up into our November 22 time-frame, unless we get a rug pull between now and then.
Nov 22 is 180 degrees straight across and opposite the 481 all-time high.
When markets spike into a potential time/price square-out typically it underpins the significance of such a turning point.