By: Jeff Cooper
Hit and Run Morning Stock Report: February 24, 2023
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3980 Test or Fail? That Is The Question
February 22 ushers in the final month of the Natural Year which begins on March 21.
March 21 is Gann’s “Zero Date.”
It’s where he begins his time counts.
In Gann’s view, Time runs forwards and backwards:
“Every movement in the market is the result of a natural law and of a Cause which exists long before the Effect takes place and can be determined years in advance.”
The last major swing low was the December 22, 2022 low. This is precisely 720 degrees from the important Jupiter/Saturn conjunction from December 21, 2020.
Likewise, the major March 23, 2020 low was 270 degrees prior to the December 21st, 2020 Jupiter/Saturn conjunction.
The major Christmas Crash low in 2018 was 720 degrees prior to the December 21sst, 2020 Jupiter/Saturn conjunction.
I think 90 degrees from the December 22, 2022 low will be very important.
Keep in mind it’s always + or – a week.
So let’s watch the price action into the week of the Ides of March closely.
This March will be both the 14th anniversary of the March 2009 Bear Market low and 23 years from the Bull Market top in 2000.
Underscoring this significance is that 23 happens to be square March 21.
The action yesterday has just reinforced this concept, setting the stage for reversal punctuated by Thursday’s large range outside up day or LROD (Lighting Rod).
I call such large range outside up days Lightning Rods because they tend to attract the vast majority of traders attention.
Of course not all LROD’s are created equal.
Thursday’s SPX LROD came from a test of the technical Maginot Line at 3980.
Underpinning the potential significance is that it occurred on a test of the 50 day moving average.
The index seems to have winked at us with its close virtually right on the 4013 level.
So far despite all the sound and fury this week, the SPX has not closed below 3980 nor has it closed below its 50 day ma.
If it holds again today, it will look like it has passed the test.
That doesn’t mean the coast is clear.
On the private twitter feed we said:
So if we pullback today and hold Thursday’s lows in an ABC versus impulsive fashion and then take out Thursday’s high at 4028, there is a strong likelihood a rally can play out.
Indeed this seems to be the message checking an hourly SPX.
Notice the declining short-term trend line in synch with the 4013 region.
You can’t make this stuff up.
If we pull back at some point today and then take out this trend line it will trigger an hourly Rule of 4 Breakout.
There is another reason why today may have been a successful test of a key level.
February 23rd is 90 degrees square the low close for the SPY in 2022.
This is the 356.56 close on October 12, 2022
So the price low on the SPY for 2022 vibrates off February 23.
And, we got a test of a key area leaving an outside up day.
Do I think it means a new bull market if we get a recovery high above 4196, the February 2 high?
I don’t know. But I doubt it.
If we should get a run, I think it is more likely that we get 3 drives to a high with a new high above 418 SPY high on Feb 2.
One factor is because 360 degrees up from the 348/349 October low is 427.
But remember, in order to suggest we have a near term bottom in place, we have to hold a corrective pullback, and take out Thursday’s high in coming hours/days.