By: Jeff Cooper
Hit and Run Trading Morning Report - April 3, 2024
Hit and Run Links
The Panics Of 2024
The first financial panic in the U.S. was in March/April 1792.
That was 232 years ago.
On the Square of 9 Wheel 232 is 180 degrees straight across and opposite March 28th.
March 28 is the closing record all-time high for the SPX…so far.
The great bull market that started in 1982 actually was part of a 2 year bottoming process (1980 was a lower low than 1982) that started with the selling climax in MARCH 1980, (March 27), The Hunt Brothers Panic.
It almost took down a brokerage firm, Bache…just as the crash in 2008 took down Lehman.
March 1980 is 528 MOONths ago.
On the Sq of 9 Wheel, 528 is 180 degrees straight across and opposite May 8/9.
I can’t help but wonder whether the “2 years on the side” from 1980 to 1982 before the great bull got going mirrors 2 years of a topping process from 2022-2024.
If so then 2022 marks the orthodox high while 2024 marks a secondary B Wave top prior to devastating C Wave crash.
As being 528 months from the Hunt Panic, remember that April/May this year is when I’ve been looking for blood on the street.
If that sounds dramatic, consider for a moment that the King and the Queen of the bulls, AAPL and TSLA are not just below their 200 day moving averages---but in an abyss well below their declining 200 dma’s.
This has got to affect the psychology of money managers who consider them the point of the spear of speculative sentiment.
Think---nowhere to run, nowhere to hide.
Is the market doing a good imitation of Wile E. Coyote with one foot over the precipice?
We are 49 months from the March 2020 panic low here in April 2024.
Of course 49 is the start of the Gann Panic Window being 7 squared months from the prior panic.
There was a panic in 1893 which led to a depression.
On the Square of 9, the year 1893 squares-out with May 7.
Early May again.
Throughout 2024 we’ve presented synchronicities with 1929 and the thesis that a mirror image foldback may be playing out with that year.
Indeed the calendar in 2024 and 1929 are the same---the days of the week are on the same dates.
In late October ’29 the market crashed with the crash low in November beginning a return rally into April 1930.
In late October 2024, the market started a crash UP into April.
The market gaped to the topside in NOVEMBER 2024.
Let’s check out the pivots in the Spring of 1929.
So far the SPX struck a record high on 3/28.
A closing pivot low was struck on April 8th which is a powerful eclipse this year.
Friday April 5th we get the NFP report.
The bond market is trying to disabuse the stock market of the notion that rate cuts are coming---any rate cuts--- where 6 to 7 were the consensus in January.
TLT triggered a Blade Runner sell signal when it broke below the right shoulder of an inverse Head and Shoulder pattern.
Failed patterns often times lead to fast moves.
If this Friday’s NFP throws more cold water on rate cuts the SPX is on track to plunge to its 50 day line. It hasn’t tested its 50 day m.a. since knifing above it in early November.
90 degrees down from Thursday’s 5264 high for the move is 5191.
The SPX peeked under 5191 dropping to 5184, the 20 day moving average, which once again provided support.
While the SPX tailed up from its 20 day moving average we have a Breakaway Gap on the table.
An hourly SPX shows well-defined resistance at a DECLINING 20/50 hourly Bowtie.
This 20/50 hourly Bowtie at the 5225 region ties to the open gap in the context of a short-term double top.
Trade below Tuesday’s low violates the 20 day moving average and the 90 degree pullback zone.
80 degrees down is 5119.
270 degrees down is 5048. This represents a violation of the 50 day moving average which currently resides at 5063.
A full 360 degree rev down is 4977. This ties to Phil D Gap from February 22nd.
Is it possible the open gap will magnetize the SPX to a full 360 degree decline quickly?
Interestingly 495 (4950) squares-out with March 28ith, the high in place for the moment.
Is it possible the SPX sees a plumb line drop of 200 points?
The 20 week moving average hasn’t been tested since the rally kicked off in October.
April is 180 degrees from October so we have natural turning point potential.
Yesterday the SPX Weekly Swing Chart turned down for only the second time since the October 2023 low.
The first instance was in early January. Here we are 90 days/degrees from early January for a natural potential turning point again.
If we get downside follow thru after this turn down in the weeklies, it underpins the importance of last weeks 5264 high.
In sum, above we noted that 270 degrees down from high is 5048.
The March SPX low is 5056.82.
So this is an important downside pivot.
The monthlies haven’t turned down since the rally began.
Because it’s been so long, the implication is that if they turn down the SPX slides further to satisfy a 360 degree drop to 4977.
In sum, a mean Mr. Reversion may be on deck.
Markets seek equilibrium.
The fulcrum of this rally, 50% of this 1160 point advance is 4684.
This is just above the 4607 July 2023 peak.
If panic is unleashed, prior resistance is new support.
461 (the July high) squares mid-May, the Panic Zone measuring from March 28th…should that high hold and a series of lower highs plays out.
The problem is, as shown recently, breakage back below the prior 4818i high at this stage destroys the structure of the bull…in the same way it did in 2007 when the SPX cleared the 2000 peak and then reversed back below it ultimately producing an almost a 60% downdraft.
We’ll review that structure further tomorrow.