By: Jeff Cooper

Hit and Run Trading Morning Report - November 20, 2023

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Big Week

“Time is the most important factor in determining market movements and by studying past price records you will be able to prove to yourself history does repeat and by knowing the past you can tell the future.”
-W.D. Gann

November 21st is the 15th anniversary of the crash low in 2008.

That was the primary low. It was the NDX low for the Bear market.

The SPX staged an Undercut Low in March 2009.

It knifed below the November 21st, 2008 low for a total of 9 trading days.

Underscoring the significance of the November 21, 2008 low as the Bear market low

Is that the closing low that day was a Time/Price square-out.

The closing low was on Nov 20 at 752.

752 is precisely square November 20/21.

The 15 year anniversary of a major turning point is important as 15 years  is 90 degrees of Gann’s Master 60 Year Cycle.

As such this is a very important anniversary date.

All the more important because the SPX has spiked sharply into this date.

One might say we have crashed up into this date as the SPX has rallied 417 points or over 10% in 13 trading days.

When an item spikes up or down into an anniversary date or a square-out there is a greater likelihood it is an important turning point.

As well, 4497 is a key 540 degrees up from the 4104 October 27th low.

As well, November 21/22 is 180 degrees straight across and opposite 481, the all—time high.

In other words early this week squares the price of the Bull market top.

Speaking of the 60 year cycle, November 22 is the 60th anniversary of the JKF assassination.

While that event did not change the course of the market, it tore the fabric of the country.

November 21/22 is also 45 degrees from January 4th, the all-time high.

The question is whether this rally  extends to new all-time highs or rolls over to new lows from here.

Back in June I outlined my expectation for an important top in July.

The SPX declined sharply from July 27th carving out 3 big drives to a low 90 degrees in time later on October 27th.

The SPX just missed satisfying our Head & Shoulders projection (4070).

Time is more important than price as W.D. Gann stated.

I did not expect the kind of explosive rally off the October 27th lows that has played out.

I don’t know anyone who did.

That said, we’ve had our turning point of November 21/22 and we’ve clearly run up into it.

With the SPX challenging the low of the high bar day from the July 27th Key Reversal Day we are at an important juncture.

At the same time the SPX has rallied up to the right shoulder of a Head & Shoulders Top pattern.

Offsetting the right shoulder and sustaining above it triggers a Blade Runner buy signal.

In other words it wipes out the Head & Shoulders.

Fast moves come from failed patterns; consequently, clearing the Right Shoulder at 4541 implies the July 4607 high will be taken out.

That theoretically opens the door to an all time new high in 2024.

Gaps typically get filled but the SPX shows a series of 3 gaps which so far look like Breakaway Gaps to the topside. These gaps are feathers in the bulls cap…for the moment.

If two out of three get filled on a drop, get defensive.

The  middle 2nd gap (A) ties to an SPX 20/50 moving average Bowtie at the 4330 region.

This ties closely to a 50% retrace of November’s rocket…assuming the rally has struck a near term high.

It is not by rallies or downdrafts that the market reveals itself.

It is by the first pullback after a sharp rally and the first snapback following a downturn that the market talks.

We know where the technical trifecta is where a bullish pullback must hold:

1)      The 20/50 moving average Bowtie

2)      The second gap

3)      The 50% retrace

Currently this technical trifecta resides at the 4330- 40 region

A decline below 4330 warrants caution…especially if it occurs without the July high being taken out.

Especially if it is impulsive (5 waves).

Initial support is at Phil D Gap at 4425. This ties to the declining black Tops Line.

Notice the broken purple Tops Line which ties to the Technical Trifecta in the 4330 region.

Friday the market closed just above the idealized 4497 resistance.

It did so on the important Friday weekly closing basis a plus for the bulls.

Friday left an NR 7 Day, the narrowest range in 7 sessions.
These contractions are typically followed by an expansion of volatility in the next few days.

The presumption is that this will be to the downside.

The strong rally has convinced many that we will continue to rally into year end.

However, we must see what the November 21/22 turning point produces.

If we pullback into year-end holding support, the first week of January is an important pivot.

It is 2 years, 720 degrees/days from the Jan 4, 2022 all-time high.

As well the low for the move in Oct 2022 was 349 and 349 points to January 4th.

You can see how these Time/Price square-outs drive the market.

The 349 low squares October 13, the low in 2022.

Most market participants will tell you the market is a random walk.

The above proves the market is ordered and  and because of a definite relation between TIME and PRICE  to some degree predictable.

Conclusion. January will also be pivotal because late January is 180 degrees straight across and opposite the late July 2023 peak and 90 degrees/days from the October 2023 low.

Will be get a high to low to low cycle or a high to low to high cycle?

The price action coming out of January will tell us whether the bear market is in hibernation for a few more months…whether or not a new head-fake all-time high is seen.

They bottom line is the bigger the top the bigger and longer the drop.

The year 2000 saw a 6 month top.

2007 was a 3 month top.

The next high, be it a lower high than 4800 or an all-time new high,  by our cycle date in 2024 (reserved for Hit and Run members) will complete a 2 year top auguring in a secular bear market.

While many market participants will embrace a potential all-time new high as the Sign of the Bull,

Mr. Market loves head-fakes.

The structure suggests a new-all time high would likely be a B Wave prior to a devastating C Wave lunge.

Intriguingly, a new high would mirror the Undercut low in 2009 in keeping with W.D. Gann’s notion of “as above, so below.”

Bottom line  the market will crash but not where and when most think it will.

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