By: Jeff Cooper

Hit and Run Morning Stock Report: December 29, 2022

Third Time a Charm?

Mr. Market is uniquely good at being a forward looking beast.

By the time the majority of CEO Pollyanna’s begin to sing the recession song in unison, Mr. Market has already priced that in.

The T Rex in the ointment is if the recession turns out to be a doozy.

The bears have had field position most of December.

Once Santa was MIA, the bears were able to open up a can of whoop @$$ with impunity.

On the heels of an ugly year, elevated tax loss selling and forced selling ambushed the idea of a year-end rally, meaning for the most part, bulls kept their wallets on their hip, allowing Mr. Bear to do his best impersonation of Clockwork Orange.

December has been a story of icons AAPL and TSLA taken to the woodshed.

When the raid the house, they take the Madam and the piano player last… but take them they do.

Volume remained at its lowest level of the year on Wednesday… as it has all week.

The lowest closing for the NAZ for 2022 was 10,321 on October 28 -- until Wednesday.

Despite all the hopeful talk of “pauses and pivots” over the last several weeks and the hoped for Santa Clause Rally for the second half of December, the NAZ closed at a new 2022 low yesterday at 10213 -- more than 100 points below the previous low set on October 14.

The battle between an extremely weak year and normally bullish seasonal influences continued this week.

As we offered early this month… seasonal influences are the short straw in bear years.

That said the market had two opportunities this week to begin a rally that is magnetized to the 3890-3900 (straight across and opposite late December).

It failed each time. This morning looks like the 3rd attempt.  Will the third time be a charm?

The first indication of a drive to 3900 will be the SPX reclaiming 3860 overhead pivot where a micro Rule of 4 Breakout would be triggered.

As flagged yesterday, Wednesday’s lows may be seen as a little inverse Right Shoulder.

Consequently, taking out 3860 and holding theoretically opens the door to 3960 over coming hours/days.