By: Jeff Cooper

Hit and Run Trading Morning Report - February 15, 2024

General Applause

“A fire broke out backstage in a theatre. The clown came out to warn the public; they thought it was a joke and applauded. He repeated it; the acclaim was even greater. I think that’s just how the world will come to an end: to general applause from wits who believe it’s a joke.”
Soren Kierkegaard

“I’m a cold Italian pizza, I could use a lemon squeezer.”
-Monkey Man, The Rolling Stones

On top of waves of speculation driven by animal spirits, there are undeniable harmonics in terms

Of anniversary dates, periodicity and price.

For example the rallies into the highs prior to the two greatest crashes in the U.S. both occurred in May.

The blow-off rally in 1929 started from a May 31 low and ran into September 3rd.

A period of 95 calendar days.

The blow off rally in 1987 started from a low on May 20 and ran to August 25.

A period of 97 calendar days.

The pattern into the crashes were nearly identical too with the crashes themselves occurring 49 to 56 days from their respective highs…what Gann called his Panic Zone or Death Zone.

The crash in 1987 was on October 19th.

The crash in 1929 was on October 24th and October 29th.

We are in the midst of a blow-off rally that started from an October 27 low in 2023.

To Monday’s all-time high this is a period of 108 days.

Some consider 108 a key to W.D. Gann’s time factors.

Below is the Gann symbol. It is also Da Vinci’s Vitruvian Man

Notice the angles on the chart at 108 degrees.

The distance between the Earth and Sun is 108 times the diameter of the Sun.

The diameter of the Sun is 108 times the diameter of the Earth.

The distance between the Earth and Moon is 108 times the diameter of the Moon.

The radius of the Moon is 1080 miles.

The 9 planets traveling through the 12 signs of the zodiac constitute the whole of existence.

9 X 12 = 108.

And God said, “Let there be lights in the vault of the sky to separate the day from the night and let

Them serve as signs to mark sacred times and the days and years.”

Interestingly the 108th day of the year is April 18th.

This ties to April 19th, considered the Day of Infamy.

Long time readers are familiar with this date.

I won’t get into it again right now but it ties to many historic events

including the start and end of many American wars. (+ or-).

If we are in a pre-crash blow off, we are long in the tooth.

The froth is stupefying in Generals  like NVDA, ARM, SMCI.

Chips off the old block.


February 91966 was the secular bull market high from 1949.

That was 58 years ago.

It was 58 years between the 1987 and 1929 crashes.

Those two crashes occurred in October. Following the crashes there was a return rally into mid-to late APRIL.

I can’t help but wonder if we’ve got a mirror image fold-back on the table with the start of a blow-off in October 2023 (versus a crash) and a corresponding plunge in April 2024.

In sum after the most negative NYSE breadth in more than one and a half years on Tuesday, market froth is overflowing: Buy the Dip has become Buy the Sinkhole.

Are we waiting for Buy the Kitchen Sink?

The monkey on the markets back is euphoric  sentiment which perpetuated a delirious bounce back on Wednesday…on a 15% decline in volume.

It’s a performance thing. The more momentum, the more performance demands participation,

The more the lack of supply of shares, the more vertical. The more applause, the more the clown car is on the crash curve.

As well new lows expanded yesterday on the NYSE and NAZ and SKEW (a measure of “tail-risk insurance” employed by major institutions, is close to a record at a 10 day average of 154.32.

Each time net daily NYSE declines have reached the proportions seen on Tuesday (a significant and infrequent event) in the past several decades coming off an all time high, markets have followed through with a significant decline.

Tuesday saw 92% of NYSE volume in declining issues.

Is the market broken? Or has it just lost its memory?

I am not one who loves to seek reasons why some think “this time is different”.

“Whatever has happened before will happen again. Whatever has been done before will be done again.” |
-W.D. Gann

“What has been will be again, what has been done will be done again’ there is nothing new under the sun.”
-King Solomon