By: Jeff Cooper

Hit and Run Trading Morning Report - March 19, 2024

Somebody’s Feeding The Ducks While They're Quacking

A large gap up opening in the market on Monday opened the door to drive to a new all time SPX high.

However bulls snatched defeat from the jaws of victory as most stocks stalled out giving up their early gains in the first hour.

The SPX closed at the low of the session.

The promise of a gap up open from the 20 day moving average in tandem with a Plus One/Minus Two buy setup fell flat.

Somebody’s selling into strength. Somebody’s feeding the ducks while their quacking.

The SPX hasn’t struck a new high since its March 8th  Key Reversal Day which kept a lid on the market.

The DJIA left a Lizard sell signal reversal on February 23rd and hasn’t struck a new high since.

The 3 Day  Chart on the DJIA turned down on 2/28 right off the all-time high.

A 3 point trend line resides just below current levels.

A Rule of 4 Sell followed by breakage below the 50 day moving average suggests a blow-off top may be off the table.

Interestingly, 6 years, 6 months and 6 days from the August 21st  2017 Great American Eclipse is February 27th, 2024.

Maybe something, maybe nothing but that time span also ties to the SPX 666 bear market low on March 6, 2009.

The second Great American Eclipse is on April 8th,  the same day as the beginning of the Jewish year.

Israel became a nation 76 years ago in 1948.

76 squares April 8.

We are currently 94.5 years from the September 1929 top.

94.5 squares April 8th.

The October 2022 SPX low of 3491 (349) squares April 8th.

April 8th looks like a big pivot.

My expectation has been for new highs into April. Monday took some of the wind out of those sails.

We also must be mindful that  519 (5190) the all time high squares March 18th.

So Time may have caught up to Price with Monday squaring out with the all-time high SPX price.

This is all the more reason if the SPX clears 519, we could get a run for the roses.

As well clearing the 5190 all-time high Key Reversal Day triggers a Reversal of a Reversal…what I call a Keyser Soze.

Fast moves come from false signals so clearing March 8 signal reversal bar should see acceleration.

The weekly SPX below underscores why the SPX has been entrapped in a 100 point chop since March 8th from roughly 5116 to 5220.

From the October 2022 low of 3491 to the July 2023 high (blue arc) is 1116 points

From the Oct 2022 weekly closing low of 3583 to the July 2023 weekly closing high is 999 points

Adding both of those to the respective October 2023 low and weekly closing low

Give 5220 to 5116 range.

Breakage above 5220 that sticks suggests a run for the roses.

Alternatively a failure below the 3 point trend line on the DJIA with follow thru below its 50 day line pictured above suggests a top is in.

As offered in yesterday’s piece, this is the week that will likely determine whether we have a Buying Climax.

Below is a daily SPX channel we showed in February.

It starts from the Oct 2022 low.

It ‘explains’ why the SPX has being going sideways after hitting its head on the top rail of the channel.

However, as long as support around 5050 holds, then the door is open to a “As Above So Below” move---an Overthrow of the top of the channel mirroring the October 2023 Undercut of the channel.