By: Jeff Cooper

Hit and Run Trading Morning Report - February 26, 2024

Circus March-imus: A Turning Point For the Ages

Circus Maximus was an ancient Roman stadium for mass entertainment.

Not unlike the circus we call the stock market which provides death defying leaps and bounds, thrilling The Crowd.

The month of March this century marked many turns of the chariots we call stocks.

March 2000 is known as the Tech Bubble Top.

It’s gladiators were CSCO, DELL, INTC and MSFT known then as The Four Hoursemen.

24 years later we have the Fab Four…MSFT, META, AMZN and NVDA---the remnants of the Mag 7.

Few realize this but it took 13 years for the top on March 24, 2000 to be cleared on a sustained basis.

In fact Friday, February 22, 2024 was the first time since March 21, 2000 that the SPX closed 2% higher on the day at an all-time high.

3 days later on March 24, 2000 at 1552.87 it topped starting a multi-year decline.

The index struck a nominal new high by 0.8% for 3 days in July 2007 and again in Oct 2007 for 6 days with a high at 1576.09 again starting another multi-year decline.

So we got a high on March 24th, 2000 to kick off this century.

In March 2003 we got a higher low which began a 4 year rally.

March 2009 defined the Great Recession low.

March 2013 saw the SPX finally clear the 2000-2007 tops on a sustained basis.

March 2020 was the Covid Crash low.

March 2022 produce a pivot high before the market crashed into October that year.

March 2023 produced a low for a stellar run into July 2023 ..120 degrees/days later.

Drilling down shows the dailies into the March 24th, 2000 top.

We are 120 degrees/days from the October 2023 low which opens the door for the potential for turn in league with the aforesaid Buying Climax.

That said this blow-off has exceeded the duration of the 1929 and 1987 blow-offs of 90 to 100 days.

It could extend further into March.

It has exceeded the percentage moves higher of other historic last ditch blow-off rallies….other than the Big kahuna…1929

In sum, in early December I wrote that my expectation was for a basing period starting from December 20/21 and lasting for about a month prior to extreme series of spikes and gaps up and down.

SPX broke out on January 18th, 2024 and has seen a series of spikes and gaps up and down.

I went on to say that this could last until the Spring.

My expectation is for a possible short-term panic in the first half of March which could evolve into a full-fledged waterfall event.

Alternatively the market could march higher after a sharp shakeout installing a top prior to the big Kahuna Top..

SPX exceeded 5048 opening the door higher.

5110 is a potential Time/Price square-out with 510 squaring the October 27, 2023 low.

However, clearing this region opens up the door to projections stacked up all the way from the upper 5100’s to as high as 5500-5600…a region I mentioned last year that I never thought we’d see.

The complexion of the market in the first half of March will give us a lot of information about

When and where we will top prior to a drop to the 3200 region.

In the near term, the Q’s left a Combo sell signal on Friday---a Gilligan and a Soup Nazi.

Let’s see if the market respects the setup.