By: Jeff Cooper

Hit and Run Trading Morning Report - March 15, 2024


Thursday pretty much personified the Pops & Drops in the dailies since late January “basing” phase ended that we spoke about yesterday.

Thursday was a day full of whiplash. A gap up open defined a high followed by a downside ORB.

From there the SPX meandered drooping to take out the morning low.

Once again there was no follow thru as the index rallied to the top of an intraday channel.

The kiss of resistance led to another slide to the bottom of Thursday’s channel  and it looked like the market would close on its lows. Nope. We got yet one more whipsaw with the top of the channel acting as a magnet.

Is this a preview for today’s OpEx?

One can only imagine how bizarre next Wednesday’s FOMC Cha Cha will be.

Today squares out with 519 and with the late comeback, that may be the agenda, but The Truth Teller, IWM, tells a much different story.

IWM broke badly snapping a Bottoms Line from last October’s low with authority triggering an Angular Rule Of 4 Sell signal in the process---a break of a rising 3 point trend line.

When the 20 day was lost in January, IWM sagged to its 50 day line.

IWM’s price action is decidedly bearish: Following last Friday’s Large Range Key Reversal Day the 3 Day Chart turned down. All the IWM could do is muster a meager turn up of the dailies before knifing lower yesterday.

In other words the turndown of the 3 Day Chart did not perpetuate a rally phase. Instead IWM dropped sharply below Tuesday’s 3 Day Chart low.

From last Friday’s 23 month high of 210.41, a 90 degree decline is 196.50. This ties closely to the 50 day line at 198.

180 degrees up from the 161.67 October low is 188 which ties to the 200 day moving average.

The October 27 low is straight across and opposite 199 which is the 50 day moving average

Consequently, 199 and the 200 strike are the downside pivot. Breakage below there opens the door to the 200 day and 188.


Yesterday’s IWM low was 200.17.

This is important as 202 also squares the Great American Eclipse.

IWM closed at 202 on Thursday. Another swing below 202 opens the door to 188.

IWM’s weakness corresponds to breadth that has produced some of the most negative readings since the 2020 crash

As for the SPX without MSFT, AMZN, AAPL and GOOG on Thursday, it would have sung a much different song more in tune with IWM.
It feels like there was an agenda to protect the baby.

Speaking of pre-crash 2020, the WEEKLY VIX is on the verge of a buy signal (a sell signal for the market) that mirrors the pattern in early 2020.

Notice how the Bollinger Bands were “pinching” in February 2020.

VIX rose above the top Bollinger Band (yellow) and then came back in thru the band triggering a VIX Buy signal.

The signal was confirmed when VIX knifed back up through the top of the yellow band.

The market crashed.

There is a  similar pattern playing out in the VIX currently.

The analogue calls for a rally in the VIX above the upper band corresponding to a market downdraft.

Then VIX should pull back in keeping with the analogue synchronous with the SPX rallying to new all-time highs.
There is no way to say exactly how low the VIX will go in tandem with how high the  market could spike, but when the VIX rises back above the upper yellow band, it should telegraph a market plunge as it did in February 2000.

A rally should be sharp enough to disabuse bears of shorting and convince bulls that  any subsequent drop will be absolutely “made for the buying”.  It will brandish “buy the dip” in the DNA of market participants on all future declines… at exactly the wrong time.

Which is exactly what Mr. Markets intentions are.