By: Jeff Cooper

Hit and Run Morning Stock Report: December 6, 2022

What’s A Soup Nazi Sell Signal?

Fast moves come from false moves.

But how to get on board before the train leaves the station?

My Soup Nazi sell signal does a good job of identifying these situations..

A Soup Nazi sell signal is a new 20-day high that reverses back through the prior high of a 20-day look-back the same day or the next day.

There must be at least a 4-day interval between the new high and the prior high within this 20-day look-back.

This is to prevent continuation moves.

The idea is that there is a school of systematic traders who buy new 20-day highs.

But if there is no follow-through, and the stock reverses with authority, there is “no soup for them”.

VLO is a good example of the setup.

VLO struck a new 20-day high on November 22.

There is a 4-day interval between that high and a prior high on November 15th.

The next day VLO reversed below the November 15th high.

The subsequent session VLO traded inside, but from that point on VLO unraveled.

VLO is down 19 points in 7 sessions.

Not all signals are created equal.

All trading is contextual within the scope of multiple time-frame analysis.

Checking a weekly VLO shows that the November Soup Nazi sell signal is in the context of a double top.

This enhances the probability that the November signal would hit pay dirt.

It did.

What “buffed out” the set-up and made it compelling is that the November 22 high at 142 was a Time/Price square-out.

My Time/Price Calculator below shows that 142 is 180 degrees straight across and opposite Nov 22…the day of the high.

Time points to price; price points to time.

As W D Gann wrote, when time and price square out expect a change in trend.

Putting together reversal patterns such as the Soup Nazi along with square-outs is unique to Hit and Run

And stacks the odds of a successful outcome in your favor.

The unique Wheel of Time & Price is proof that the stock market moves in a remarkably orderly fashion.

As such, as traders, we can speculate with the wind at our backs.

180 degrees down from the 142 high is 119. Breakage below 119 opens the door to the next decrement of 90 degrees down which is 109.