By: Jeff Cooper

Hit and Run Morning Stock Report: November 18th, 2022

Gann Vs Elliott

Markets began with a sharp gap lower after Fed official Bullard said that markets were underestimating the degree of restrictive Fed policy ahead.

But then after the first bounce, we never took out morning lows and markets spent the day rebounding and faltering before ultimately closing on session highs.

While internals such as NYMO fell into sell territory, by the end of the day they were in neutral ground.

While these internal metrics lean toward a clear downtrend, they left a compelling sense of uncertainty by the close

It felt like Thursday morning was a Breakaway Gap but the bears grabbed defeat from the jaws of victory.

The reason for the seeming “stick save” was that the SPX rebounded off the last swing high-- the late October/early November highs.

Nevertheless, it felt as if the SPX had a date with Phil D Gap in the low 3800 region.

So the case for a new downtrend for the short term is uncertain and we wait to see if we get a manic Opex Pinball day.

While the Elliott Wave suggests a structure that points to a plunging 3rd of a 3rd  Wave decline, Gann Methodology visa vis my 3 Day and 3 Week Charts look constructive, near term.

What do the 3 Day Charts and 3 Week Charts indicate?

The 3-Day Chart turned up in late October (1st black circle).

When it turned down again (2nd black circle) it immediately found low.

That’s an initial sign of bullish behavior.

That initial sign was validated when the 3-Day Chart turned back up as soon as it could do so (3rd black circle).

It has remained to point up.

That MAY be bullish OR the SPX may be tracing out an A B C corrective (bearish) pattern:

An A leg up, a B leg down followed by a C wave up.

The following is a weekly SPX for 2022.

The weekly SPX turned down immediately off its all-time high (1st red circle). Bearish.

The first time the 3 Week Chart turned up is the 1st green circle.

It immediately defined a high. Bearish behavior.

The 3 Week Chart turned back down as soon as it could (in 3 weeks…the 2nd red circle).

Notice that the 2nd time the 3 Week Chart turned up (2nd green circle) it defined a high immediately.

The 3 Week Chart turned down on the drop into mid-June…not because it had traced out 3 consecutive lower weekly lows; but because it took out the prior CIRCLED 3 Week Chart low.

In August the 3 Week Chart turned back up (3rd green circle) and pushed higher for a week before topping.

A bit of a fooler. That said, the 3 Week Chart turned back down as soon as possible (4th red circle).

Following the mid-October low for the year, the 3 Week Chart turned back up 2 weeks ago.

The pattern is reminiscent of the August peak which came a week or so after the 3 Week Chart turned up.

Today is Opex. It will be interesting to see what plays out given the above pattern and what transpires next week.

If markets can continue to hold up, it suggests the near-term trend is higher