By: Jeff Cooper

Hit and Run Trading Morning Report - April 11, 2024

Some Like It Hot

Some Like It Hot | Comedy, Marilyn Monroe, Billy Wilder ...

Yesterday’s hotter than hoped for CPI roiled the market.

IWM got hit hard ballooning the TZA that Hit and Run members bot on Tuesday.

The SPX is down…but not out.

While it took out Thursday’s Lighting Rod low yesterday, violating the Crouching Tiger long setup,

There is potential for a rally to trigger on a stab back up through last Thursday’s low--- in other words a Soup Nazi buy may be on deck.

To recap, a Soup Nazi buy is a new 20 day low---we have one---and a reversal back up thru the low of at least 4 days prior within the 20 day lookback.

Of course the impetus, as offered in yesterday’s report, feels like the Ketchup Play to the 50 day is on deck.

That notion is clearly backstopped by the price action in IWM.

IWM shows a Breakaway Gap thru its 50 day moving average.

As well it triggered an Angular Rule of 4 Sell …on a gap. No Bueno.

While IWM could certainly backtest the broken trend line into Phil D Gap, this breakage comes from a well-defined high as shown on the chart below we showed in March.

In addition Wednesday’s IWM carnage followed a picture perfect Minus One/Plus Two Sell setup.

The Truth Teller, as Clapton sang, “She no lie, she no lie, she no lie.

On March 28, IWM left a signal reversal bar, a Lizard sell signal.

In fact it was a test failure of the March 8 reversal.

As you can see the March 28th reversal was produced from 3 Drives To A High.

Bearishly IWM has dropped with authority below its prior rally high on December 27th at 205.49.

90 degrees down from the March 28 high near 212 is 198.

Wednesday’s low was 199.54.

198 squares May 1st…and 197 is a corner number meaning it has ‘natural’ significance.

180 degrees down from high is 184, Breakage below 198-197 opens the door to 184.

Since the 200 day moving average is at 189, the takeaway is that breakage below 197 projects to an undercut of the 200 day moving average.

180 degrees up from the 162 October 2023 low is 188/189 which as noted ties to the 200 day m.a.

It looks like 188/189 is the downside pivot on IWM

What happens if SPX 50 day line at 5100 doesn’t hold?

360 degrees down from high 4979. This ties to the bottom rail of a trend channel defining the advance from late October.

Below that the door opens to the bottom rails of  red and blue trend channels.