By: Jeff Cooper

Hit and Run Trading Morning Report - February 23, 2024

What Is The Line Of Most Resistance In The Q’s That Will Trigger A Crash?

On the heels of NVDA’s print, the Q’s produced a massive gap up that elicited a Gap & Go to a new high close.

Fast moves often come from false moves and you can see that the break below a 2024 QQQ  trend channel put the hook in, stampeding shorts and longs alike.

In hindsight, notice how the Q’s turned their 3 Day Chart down on Wednesday.

It was the second turn down of the 3 Day Chart…the first instance being the beginning of January.

Will the 3 Day Chart turn back up immediately as it did in January?

It’s got its work cut out for it as a mid-channel line (red) defines near tern staunch resistance (check last weeks price action where the break below the red line on a gap produced resistance.

Now the Q’s are in the same position backtesting the region just below the red line.

As well a higher high today above Thursday’s high puts the Q’s  in the daily Minus One/Plus Two sell position.

Breakage back below the blue  Bottoms line of the trend channel is no Bueno---not that this is going to happen today.

But when it does occur follow thru below Thursday’s low cements the idea of an important top.

Recently we wrote about the sequence of January/Feb highs since 20018.

Jan 2018 marked the high prior to a Flash Crash.

2020 saw a primary high in Jan and a secondary high in Feb prior to the Covid Crash.

January 2022 saw a high followed by a secondary high in Feb and a debacle.

Here we are another 2 years out.

I think we may be mirroring the 2020 pattern with this nominal  high  on the table.

The presumption is a waterfall event this spring.

I think the Feb 12th high was a primary high and we’re working on a secondary high…like 2020.

The reason being is that Friday February 9th represents a solid Time/Price square-out.

The 342 October low squares Feb 9 the closing high prior to yesterday.

February 12th the market struck a new intraday high and tailed off prior to gapping down.

If the Q’s strike a new high above the February 12th high and knife back below the Feb 12 high today or Monday it will trigger a Soup Nazi sell signal.

Checking a daily QQQ from October shows breakage back below the Line Of Least Resistance warrants caution.

If so downside follow thru below Thursday’s low is a problem: it validates the idea of a January primary high and a Feb secondary high and underpins the notion of a Spring Waterfall.

Watch for a possible Jump The Creek sell signal below yesterday’s gap up for The Tell.

The market may back and fill with “2 weeks on the side” playing out going into the array of March anniversary dates this century.
I am not sure if markets panic on a spike into that March period or they go sideways first, but the week before and the week after the  the  Ides looms large in Mr. Market’s legend.

There is a Ghost Line from the Oct/December 2022 lows that is just overhead that should present beaucoup resistance.

Notice the symmetry above and below this Ghost Line.

Every time it’s been backtested has seen a pullback albeit they are shallower and shallower.

However when the Line Of Least Resistance (not shown) from the Oct 2023 low is snapped it won’t be a shallow sell off.

It will be a waterfall.

Let’s pull back the lens to see the high from MARCH 24 years ago.

The black Tops Line connects the intra-month highs from 2000 and 2022.

While there is overhead room there’s not much. Especially when you connect the monthly CLOSING highs, the magenta line.

We’re there.

Is it possible we overthrow these Tops Lines?


Anything in markets is possible. Our job is to trade what is most probable.

That said a super spike to end a Super Cycle has some logic.

Speak to NVDA.

Notice the black parallel Bottoms Line.

You like odds?

The red Bottoms Line from 2015 is a big deal. It is the Line Of Most Resistance.

It is currently at 320ish.

Below that is full on crash mode.