By: Jeff Cooper

Hit and Run Trading Morning Report - April 5, 2024

The News Breaks With the Cycles Not the Other Way Around As Markets Face A Come To Jesus Moment

We have walked through a litany of time/price cycles, square-outs and synchronicities pointing to a crash.

Our weekend report will further tie those all together.

It’s not a pretty package.

On Thursday markets gapped higher with the SPX spiking only 8 points from the 5264.85 March 28 all-time high.

The opening surge pulled back triggering a down ORB which carved out a low followed by an up ORB mid-day which all but certainly looked like it would perpetuate a new record high.

Key word “all but certainly”.

However, a 3 Plot ORB Day Played out when another downside ORB was triggered on trade below the morning low.

Markets often play out in 3’s just as rapid flipping of the 3 Day Chart often precedes a change in trend.

We’ll get to the 3 Day Chart in a minute.

When A Jump The Creek Sell was triggered when the SPX offset the opening up gap,  the wheels came off.

In the process the 20 day moving average was lost leaving the largest bar since the October 2023 low.

We have rapid flipping of the 3 Day Chart.

It turned down on 3/26 with 3 consecutive lower daily lows.

It turned back up when a new high was struck on3/28.

It turned back down on Tuesday.

My Swing Method was warning of Thursday’s reversal.


When the SPX traded back below the CIRCLED 3 Day Chart low of 5203.42 from 3/26 on Tuesday the 3 Day Chart turned back down.

There are two ways the 3 Day Chart can turn down: with 3 consecutive lower daily lows or trade below a Circled prior 3 Day Chart low.

Consequently, the SPX traced out 2 consecutive higher daily highs while the 3 Day Chart was pointing day. This satisfies my Minus 1 (the 3 Day Chart pointing down)/ Plus Two (2 consecutive higher highs) sell setup.

Succinctly when the 3 Day Chart is pointing down and you get 2 consecutive higher daily highs it produces my Minus 1/Plus 2 Sell setup.

This was the position of the SPX as it tested the March 21 and March 28th record highs.

In sum we it looks like we have a Test of a Test Failure pattern on the table

The double tops were tested and we rolled over with authority.

In sum, when the 3 Day Chart turned up directly off the October 2023 low with power the SPX never looked back.

The index turned its 3 Day Chart back down ONCE prior to the March 26 turn down.

That was on January 3rd.

That turndown defined a low.

Now we have a change in complexion because the SPX has traded back below the March 26 turndown low with authority.


Turn the chart upside down and look at the October low.

It would be surprising if the SPX didn’t take the direct route versus the scenic to a test of its 50 day line.

We’ve been warning the time that has elapsed without the 50 day being tested and the distance from the 50 argued that when it occurred it would be in a flash.

The 50 day m.a. currently resides at 5076.

Will we get a Flash Crash?

Interestingly we had one in  the Spring of 2010 (May). 14 years ago or 2 X 7 panic cycles.

Earlier this week Hit and Run’s report , This Things Gonna Crash, LINK HERE  laid out the scenario for a full-blown crash.

The record high on the SPY is 524.61

Rounding we’ll use 525 to look for square-outs on the Square of 9 Wheel?

525 is opposite May 19. This will be an important pivot if the market continues to trace out lower highs.

90 degrees down from 525 SPY is 503 with the SPY 50 dma at 506. Hmm.

Today squares out with 515. As I write pre-open, the SPY is bouncing a tad to 514.50.

515 region should act as resistance if cycles are going to exert immediate downside pressure and we get follow thru.

If we get a Flash Crash Friday/Monday the next SPY vibration  down for Monday is 493.

Interestingly, W.D. Gann wrote that 7 is the fatal number the number of panic.

This is why the crashes in 1929 and 1987 started 49 days (7 X 7) from high.

As well the slow-motion car crash that started in 2022 was 49 years from the January 1973 peak that perpetuated 2 year crash.

Currently we are 49 MOONths from the March 2020 crash.

It’s a come to Jesus moment for the markets.

Caution is warranted.

The weekend report will walk through the crash patterns from 1929, 1987, 2018 and 2020 and how they relate to the current time period.

Suffice to say that large breakage below the Holy Grail, the 20 day moving average in tandem with large range signal reversal bars such as Thursday’s that broke the Bottoms Line for 2024 (rising trend line)  means  the Matador is in the ring.