By: Jeff Cooper
Hit and Run Trading Morning Report - December 14, 2023
Markets Explode Into Gann Panic Window
The low for the decline was 3492 or 349 (SPY).
349 squares October 13 for a picture perfect Time/Price square-out at the October 13, 2022 low.
Now notice that 470 is straight across and opposite 349.
The above is from Monday’s Hit and Run Report.
We followed up on the Hit and Run Private Twitter Feed, suggesting Powell could pour fuel on the Buying Stampede leading to a spike to 4700 into Opex.
Powell did. The SPX struck 4709 on Wednesday.
This occurred into the Gann Panic Window of 7 squared days or 49 days from low.
The Gann Panic Window of 49-55 days has defined many crashes including 1929 and 1987.
Those crashes culminated 55 days from the top.
We’re in a “crash-up”.
Opex is day 49 from the October 27, 2023 low.
Notice the SPX has not traded below a prior days low for more than 2 consecutive days and that obly occurred once since the low
The DJIA struck a new all-time high on Wednesday.
It may seem like a bullish event but it’s part of several high-risk intermarket Bearish non-confirmations:
We have a Dow Theory non-confirmation ]between the DJIA and The Dow Transports
We have a major non-confirmation between the NDX and the NAZ Comp.
There is also a non-confirmation between the DJIA and the SPX.
This is a situation often seen at/near major tops.
The DJIA breakout has produced an RSI of 84, the most overbought condition in 6 years.
Checking a daily DJIA shows a confluence of trend lines at the recent October low.
At the October low the DJIA hit a Bottoms Line from 2020 and backtested a Ghost Line from the January 2022 high.
The DJIA has been on a date with destiny to new highs since converting a Tops Line connecting the January 2022 high and the early August 2023 high.
Notably, it is challenging the top rail (magenta) of a parallel channel (it parallels the Bottoms line from the 2020 low).
Breakage back below 35,400, the recent breakout pivot is a yellow flag.
Breakage back below 33,500 is warrants caution as it will trigger a Rule Of 4 Sell signal.
The DJIA reached 37,100 on Wednesday.
Moving the decimal point to work with my Square of 9 shows that 372 (37,200) squares Dec 15.
Precious metals exploded in tandem with the market on Wednesday.
GLD sported an NR 7 Day on Tuesday following a turn down of its 3 Day Chart.
An NR 7 Day is the narrowest range in 7 days.
Typically these contractions in range are quickly followed by an expansion of range.
Wednesday GLD came out of a bullish 1-2, 1-2 structure indicating it is entering the heart of a dramatic Wave 3 advance.
Follow thru especially on a new weekly closing high will validate this analysis.
GDX telegraphed the explosion in the metals yesterday.
Drilling down to a 10 min GDX shows it was working on a Cup & Handle prior to yesterday’s liftoff.
We alerted the pattern on the Hit and Run Private Twitter Feed.
An inverse Head and Shoulders on GDX projects to 36.