By: Jeff Cooper

Hit and Run Trading Morning Report - April 12, 2024

NVDA Sparks A Rally, But Is It Bullish?

“You cant become a big winner in the stock market until you learn to be a good seller as well as a good buyer.”
-William O’Neil

The Hit and Run Report for March 24th, 2000 was entitled succinctly, “Pop”.

It turned out to be the day of the bull market high.

Further down in this report I’ll show one of the reasons why I thought that was “all she wrote”.

We are 24 years from the NDX and SPX Bubble Top in 2000

The number 24 is equal to the 360  degree revolution of the earth on its own axis giving us 24 hours to a day.

My Square of 9 Wheel blends the Earth’s orbit, ie, our calendar with the spiral number grid.

This is how W.D. Gann integrated  numbers (price) with time.

The Square of 9 implies that the Pythagorean logic of “units in a circle or in a square are related to each other in terms of Space & Time at specific points.”

SPECIFIC POINTS.  not random points.

This is why Gann wrote that “Every top and every bottom in the markets had a mathematical counterpart in both price and time.”

Let that sink in.

Essentially what Gann is saying is that Time and Price become one and the same at turning points.

“When Time and Price square-out expect a change in trend.”
-W.D. Gann

How do we use this practically to make money?

On Wednesday on the Hit and Run Private Twitter Feed we sent an alert to buy NVDX (the 2 X long NVDA ETF) paying 90.42.

We trimmed on the way up and are still long.

The long setup was two-fold:

1)      On Tuesday we tweeted that if there were buyers in the wings they would show up near a pullback to the 50 day line…or they would not show up. Traders looking for a picture perfect kiss of the 50 dma were left standing at the aisle. NVDA got close to the 50 but the train left the station without stopping there to pick up passengers.

2)      What sealed the deal for us in assuming the 50 day would not be fully satisfied was the remarkable Square of 9 Wheel.

Allow me to explain, NVDA topped on March 8th at 974.

March 8th squares out with 830 (red),

Tuesday’s low was 830.

You can’t make this stuff up.

The date of the high squared-out/corresponded to the price of the low.

As soon as momentum in NVDA showed up we could calculate projections.

Markets play out in 90 degree decrements in price and time.

The above Square of 9 image shows that 90 degrees in price up from 830 is 859.= (blue).

NVDA exploded to 860 on Wednesday’s open pushing to 874 before consolidating in a Line Formation.

However, clearing 859 with authority opened the door to the next 90 degrees higher which is 889 (purple).

Notice how NVDA exploded clearing 889 on Thursday.

Importantly, it eclipsed the 890 strike going into today’s OpEx validating the prospect for a drive to the next 90 degrees up which is 919/920 (green)…the next strike higher.

This is the benefit of the Square of 9 in producing projections/targets.

Anyone can recognize a breakout and momentum, the art of the trade knowing when to exit with a chunky gain.

A full 360 degree revolution or one full square up from 830 is 949.

The underlying momentum of in NVDA the last two days implies this full 360 degree price cycle will play out.

However, one of my discoveries is that a true square-out is not merely a 360 degree move but a 540 degree move.

Why? Because a true square is 3 dimensional cube. A cube has 6 sides of 90 degrees for 540 degrees.

Consequently, a cube-out in NVDA of 540 degrees from the 840 low ties to 1013.

This is 360 degrees + 180 degrees up from the 830 low.

So it is the next full square up from 889 (purple).

Of course 1013 is a new all-time high above the 974 March high. It is 107 points north of Thursday’s close.

It could happen as quickly as the Buying Climax in March which saw NVDA rocket 150 points in FIVE DAYS.

Interesting the March Buying Climax saw NVDA run from a closing high on March 1st of 823 to a closing high near 827 on March 7th…or 104 points, mirroring the afore said potential of a 107 point melt-up in a coming days.

Above we noted the March 24th record NDX high in 2000.

From that 4816 high NDX plunged to 795 in October 2002.

There were 3 ruling factors that lined up point to Hit and Run’s top call on the very day of the high.

1)      The run from the January 31st low to March 24 is consistent with the 7 Week  Gann Panic Zone, in this case a Buying Panic.

2)      NDX broke a trend line prior to the high with the top day satisfying a backtest of the trend line.

3)      The last ditch run was 7 days. 7 is the number of completion and panic mirroring the 7u week panic.

Let’s compare the action from 24 years ago with what’s happened here in 2024.

Currently NDX struck a high on March 8th that left a Key Reversal Day from a backtest of a broken trend line.

A second top played out on MARCH 21st which also was a backtest of a broken trend line.

It also produced a Signal Reversal Bar.

From the March 21st all-time high, NDX dropped to its 50 day line for the first test of that important metric since the October 2023 low!.

As well, the SPX dropped to 5139 at Wednesday’s low for a Time/Price square-out:

As tweeted on the H&R Private Twitter Feed on Wednesday, 514 (5140) squares April 10th.

Is it any surprise that we got a bounce?

From my perspective even if a nominal new high is struck, this is the perfunctory bounce suggested Wednesday on the Hit and Run Private Twitter Feed in the context of what I think is a strong likelihood that March was the primary/orthodox high.

In fact, there is a Time/Price Square-out that supports that presumption.

The NDX March 21st all-time high was18,464.70.

Rounding and moving the decimal point to work with the Square of 9 Wheel we get 185.

185 squares the day of the low, October 26, 2023.

In sum, Thursday the NAZ closed at a record high but the breadth at an all time high was the worst since the 2021 all-time high.

Monday’s report will walk through a litany of time and price synchronicities indicating April is an historic month.

If I am correct, there will be Mayhem before the second quarter is done.