By: Jeff Cooper
Hit and Run Trading Morning Report - February 9, 2024
“A star, lit up like a cigar
Strung out like a guitar
Maybe you could
Educate my mind
Explain all the controls
I can’t sing but I’ve got soul
The goal is elevation.”
Since Christmas, the SPX has seen 3 N R 7 Days.
An N R 7 Day is the narrowest range in 7 days.
These contractions in volatility typically see fan expansion in volatility within a day or two.
Thursday was another NR 7 Day, the narrowest of all three.
Meaningful immediate drawdowns followed the first two.
Despite trading to another all time high on Thursday, the SPX’s narrowest day in two months yesterday was attended by a NYMO and NAMO below zero.
These are the NYSE McClellan Oscillator and the NAZ McClellan Oscillator.
Anniversary days were a big deal for W.D. Gann and as we have noted February 9th, today, is the 58th anniversary of the secular bull top from 1966 that started in 1949.
This is in the context of an Ending Diagonal sported by the SPX.
At the same time the 2 most important turning points of the century (since the year 2000) were
The March 10th 2000 NAZ Bubble Top and the March 6-9, 2009 bear market bottom.
March 10, 2000 was a Friday.
March 6, 2009 was a Friday.
Will we get our Spike & Reversal pattern today on an expansion of volatility as telegraphed by yday’s N R 7 Day?
Or, perhaps that is Monday’s business.
Be that as it may, this March anniversary period is opposite early September the top in 1929 and 9/11 and the start of WW2 (precisely 10 years after the Sept 3 1929 top of tops.
March 6th also is square December 7th, Pearl Harbor.
There is synchronicity for a possible event, be it market or otherwise.
Markets can only defy internal weakness for a time based on elation and extreme bullish sentiment. But the lessons of history are that EVERY market, including this one, has a limit and the more stretch a market becomes the more violent the reaction when the alligator Jaws snap shut
This week I mentioned the congruence with the 5048 NAZ high daily close on March 10th and the SPX hovering at 5000.
On the Sq of 9 Wheel, 503 (5030) points to February 19th.
Interestingly February 19th was the pre-Covid Crash high.
49 months (7 squared) from that February 19th, 2020 top is March 2024.
I do not think the market continues higher into March without an intervening downdraft first at least.
Caution is warranted as there is potential that the 2020 analogue is on the table.
An event that produces Air Pocketism.
February 19th is also straight across and opposite August 24, the time frame of the pre-crash high in 1987.
So we are on a vector that has blow-offs into have produced two major cashes.
In addition, these dates square November 2/22, the crash LOW in 2008.That was the internal low, the low around the world. The NAZ.
March 2009 was an Undercut Secondary low.
There is another reason to think a spike over 5000 SPX could culminate this rally.
W.D. Gann wrote a book called 45 Years In Wall Street. He did not call it 45 Years ON Wall Street.
So I took the low of 666 where this advance started, the Zero Point and calculated 45 cubes up from
It is 5013.
Attending the Ending Diagonal pattern of this market and severe internal weakness we have elation and delirium.
I have never seen stocks as big as ARM explode 50% in one day.
NET exploded from 83 to 111 on Thursday the last 20 points after reporting.
Generals are dancing with lampshades on their heads.
Our DASH and SHOP and CDNS yesterday.
To mention a few.
Stocks strength has perpetuated chasing. The stronger the generals get the more they must be chased for performance considerations.
They have to be owned. Like the Nifty Fifty of the early 197’s.
Like CSCO and INTC in 1999/2000.
And The Street is a master at concocting rationalizations for these monster moves.
The age old truth is stocks crawl before they walk, they walk before they run, they run before they
Sprint. They sprint before they collapse
“The most money is made when fast moves and extreme fluctuations occur at the end of major cycles.”