By: Jeff Cooper

Hit and Run Trading Morning Report - March 28, 2024

Do Signs Point To A Market Crash?

“Go for the jellyroll”
-Art Garfunkel’s advice to John Lennon

“If the market is bullish, yesterday’s turndown of the SPX 3 Day Chart will define a lowsoon in terms of both time and price. Soon looks like immediate given this morning’s pre-open action.”

The above is from  Wednesday morning’s Hit and Run Report.

In fact the turndown in the 3 Day Chart on Tuesday was followed by a gap up on Wednesday which led to new record close high on the SPX.

Tuesday was only the second time since the late October advance started that the 3 Day Chart turned down. The first was on January 3rd and a low was carved out on January 4th.

Below is a chart from Wednesday’s report pointing to both turndowns.

My Swing Method revolves around the Wheels Within Wheels of time and applies to the hourlies, dailies, weeklies, monthlies and even yearlies.

Wednesday’s rally was not as “clean” as it might appear.

Just looking at the chart one it seems as if the market gaped up and closed on its highs.

But the index took the scenic route to a new closing record high.

Wednesday’s up opening gap found a high with the market pulling back, tracing out a sideways stint until the last hour…a mirror image of Tuesday’s tape.

You had to have a method behind the madness to stay the course for a rally to play out on Wednesday.

As offered in Wednesday morning’s report, if the market was going to new highs we would have to see a rally start no later than the end of this week.

On the above daily SPX, there is a Measured Move from the October low to the 2023 high on Dec 28th just before the SPX carved out its turndown in the 3 Day Chart. It points to 5371.

Interestingly, 537 (5371) points to April 8 which is the day of a powerful solar eclipse called the Great American Eclipse.

You may say what do eclipses have to do with the stock market.

A study of eclipses and their natural cycles shows that indeed there is a cause and effect relationship with the stock market.

They are a key to unlocking W D Gann’s coded novel, The Tunnel Thru The Air, about how to tell the future of the stock market.

Eclipses do not define the precise day of a high or low or an acceleration.

But there is no doubt they exert their influence on markets…often dramatically as was the case in two famous crashes, 1929 and 1987.

As well there was a solar eclipse on June 21, 2020.

90 days/degrees prior was a crash LOW on March 23, 2020.

It was one of the factors in my forecast on the day of the low at 2191 that the SPX was headed to at least 4000 within the coming 12 months.

By the end of March 2021, the SPX struck 3994.

Is there another stock market waterfall phenomena on the horizon.

I think there is a strong likelihood a crash plays out in the coming quarter.

The last time the SPX was this extended from its 200 week (roughly 4 year cycle) moving average was in early January 2002.

This was 7 squared or 49 years from the important January 1973 top.

This was one of the factors behind my forecasting a market crash in 2022.

Now we are 49 months from the February high in 2020.

April is 49 months from the March 2020 low.

The difference between the 2022 momentum unwind and the unwind on deck, is that 2022 was an escalator.

The upcoming event will be an elevator.

Timing will be critical to capture the turn.

I don’t say the above lightly.

Hit and Run has been providing market timing as well as long/short day and swing trades since 1996.

We nailed the primary high in late March 2000.

At the early September 2000 secondary high we wrote, “the most speculative area of market, the NAZ, is as vulnerable as the most speculative area of the market in September 1929, the DJIA.

In October 2002, On The Street.Com we said the bear market was over.
On October 31st, 2007 at an historic top, our report was titled Dead Man’s Party.

Hit and Run nailed the late January 2018 top prior to a crash and a second crash in December that book-ended 2018.

Interestingly, there was an eclipse on January 31st, 2018.

The high day was January 26th. A crash started on January 30th.

In that instance the eclipse tied directly to the crash.

But if it were that easy, we’d all be calling in our trades from the beach.

And the market does not exist to accommodate.

Natural cycles such as eclipses are only one factor in the hunt for The Market Hulk.

As W.D. Gann stated: “Every movement in the market is the result of a natural law and of a Cause which exists long before the Effect takes place and can be determined years in advance. The future is but a repetition of the past, as the Bible plainly states: ‘The thing that hath been, it is that which shall , and that which is done is that which shall be done, and there is no new thing under the sun.’
---Eccl. 1:9”

In sum, it was 58 years from the 1929 crash to the 1987 crash.

From 1929 to 2024 is 95 years.

58 divided by 95 = 0.61, the Fibonacci Golden Ratio, the natural progression of things.

Caution is warranted.