By: Jeff Cooper

Hit and Run Trading Morning Report - April 22, 2024


1/3 of the $43 trillion of US Indexes is held in 7 stocks.

Panic rippled through many of those names that are the tip of the speculative spear on Friday.

While the former King and Queen of speculation, AAPL and TSLA,  have abdicated their throne, the current heart and soul of speculation, NVDA and SMCI, were gripped by panic on Friday.

Maybe the decision was made on Thursday night on the heels of the Israeli attack by big funds to raise cash where they were heaviest, and once that unwind started, momentum just accelerated Friday afternoon spreading like a virus amongst anything semiconductor.

The crimson tide swamped MSFT which accelerated below its 50 day line last week.

META dived below its 50 day for the first time since the October low.

Ditto AMZN.

GOOG remains above its 50 dma but it ties to an open gap at the 147 region which could act as a magnet.

AMD which bottomed at 93 in October and ran to 227 on March 8th looked like it was trying to hold a 50% retrace at the 160 region and its 50 day line  throughout late March opened the door to more downside when it knifed below its 50 day moving average on April 4th.

Still the 50A% retrace was intact until Wednesday with AMD looking like a heat seeking missile to its 200 day moving average at 136.

Was there any way to have seen the Chip-Wreck coming?

Let’s analyze AMD using the best forecasting tool on the planet, my Square of 9 Time/Price Calculator.

AMD bottomed at 93 on October 26, 2023.

October 26 squares-out with 93.

As well, 227 vibrates off October 26th.

In other words at a price of 227, AMD squared-out, aligned with the October 26, the low day.


A 360 price cycle down from 227 is 171.

Look how AMD plunged thru 171 with authority on April 4th.

It was an Expansion Pivot sell signal on an expansion of volume.

180 degrees down from 171 (or 540 degrees 360 + 180 down from high) is 147.

Notice how 147 points to April 22/23rd for a possible Time/Price square-out.


That said, while AMD could bounce if it respects this square-out,

It has broken the Neck Line of a Head and Shoulders Top.

The Neck Line is 164/165.

As well notice how AMD accelerated once it caved in below its November 30th, 2021 top.

Prior resistance should act as new support.

The failure to even pay lip service to the 164 November 2021 top was a Sign Of the Bear (SOB), a blaring siren of lower prices.

In fact, AMD proceeded to lose 19 points in the next 6 sessions.

Panic is a rare bird on Wall Street.

To say that Friday’s tape  was rare  doesn’t tell the whole story.

While the QQQ and SPX got taken to the woodshed, the DJIA was actually up 211 points

And IWM was up a fraction.

It was a strange day.

The Advance/Decline Line was 2 to 1 positive while the SPX was down 0.88%.

How often has that happened?

Since 1926, never.

As David Einhorn says, the market is fundamentally broken, broken by passive quant investing.

This quantitative versus qualitative systematic mechanic approach knows the price of everything and the value of nothing.

The Index tail wags the market dog.

This is how you get a name like NVDA or AMD to go vertical because they are bought without regard to price. They are bought by passive index funds. As the money comes in it is allocated to them.


However what was a virtual circle on the way up will be an unvirtuous spiral on the way down.

The battlefield between the Passive which has eclipsed the active,  leaves many stocks “unengaged” in effect making markets less liquid.

The less liquid a market is, the higher the chance of a butterflies’ wings causing an avalanche, a catastrophe.

Of course there have been bears saying the chickens would come home to roost like clockwork.
Why should it happen NOW?

Why will panic continue to hit the market over coming weeks and months?

Time. Cycles.

Legendary trader W.D. Gann is known to have used astrology to guide his forecasts.

But even Gann stated, “Astrology is important but math is more important.”

“Everything in existence is based on exact proportion and perfect relationship. There is no chance in nature, because mathematical principles of the highest order lie at the foundation of all things.”
W.D. Gann

The heavens leaves signs. Math is the signature.

As a friend and fellow trader says, “There are signs all down the freeway, but they aren’t the precise on ramp or exit.”

It is math that is the foundation for Fibonacci relationships and Time/Price synchronicities that underpin all market.

Despite what is going on with active/passive, fundamentals, news, etc, markets are ordered and deterministic.

As hysterical and emotional as panic is, it too follows an order.

As to when it arrives and how it progresses.

Otherwise, how would I have been able in December to point to panicky conditions in April and May this year?

Allow me to explain.

Recently I noted that it was 36 years from the Spring Panic of 1893 to the Fall Panic of 1929.

This is 6 squared years. It's time cubed as a true square has 6 sides.

From the Fall Panic in 1987 to the Spring of 2024 is 36 years. (It won’t be 37 years until this October).

We pointed out before in this space that it is 58 years from the Fall Panic in 1929 to the Fall Panic in 1987 and that 58 squares October 29th, the crash day in 1929

The point is if you were trading in 1987 and realized this it would have alerted you to a potential waterfall event for October.

What does this have to do with 2024?

Well 58 years ago was a Spring Panic in 1966. In fact it was the start of a Secular Bear Market.

On the Sq of 9, we mentioned that 58 squares out with October 29th. It also squares out with April 27th.

Notice that 36  squares-out with/points to May 17th , the anniversary of the NYSE.

Checking the charts show this is more than a correction.

QQQ is the lead dog.  While the market action was split on Friday, the Q’s  have broken a trend channel for 2024.

From the March 8th all-time high (which ties to the NAZ top in 2000) of 448/449  the Q’s slid below 90 degrees down at 408 opening the door to  180 degrees down at 408.

At the same time 413 squares-out with March 8th. Consequently it would not be surprising to see a bounce from here; however, I’ve learnt the hard way over the years that surprises happen in the direction of the trend…especially when the trend is fast as it is currently.

The bottom of a trend channel from the late October low ties to the 200 day moving average at 395 ish.

Given the angle of attack to the downside, the likelihood is a full 360 degree drop to 368 is on deck.

Given the history of Panic Cycles, arguably 368 should be seen before the end of May.

Double breakage below the  200 day m.a. and the bottom of the trend channel should elicit a whoosh to 368.

The current split pattern between the Q’s/tech and the rest of the market is reminiscent of the action following the QQQ top in 2000.

Pulling back the lens to check the weekly QQQ shows an authoritative break of the 20 week moving average.

The Q’s closed the week on a trend channel from the October low.

It would not be surprising to see a rally attempt.

It would not be surprising to see a backtest of the 20 week moving average.

As well, it would not be surprising to see a bounce as 360 degrees down from the 5265 high is 4970.

The SPX struck a low on Friday at 4953 before. closing at 4967.

Be that as it may, the 50 week moving average (which ties to the 200 DAY m.a.) on the NDX,  converges with a Ghost Line (magenta) connecting the late 2021 peak with the July 2023 high.

I think this convergence can act as a magnet drawing the Q’s to the 380/387 region.

387/388 is 270 degrees down from the ATH.

In sum, the evidence has risen that an important top is in.

According to cycles, the leg down from this high should be an elevator versus an escalator.

We should alternate with the more slow-motion crash in 2022.

As well, I connected the 2002 low and the 2009 low and paralleled a line off the 2000 top.

The 2021 false breakout perpetuated the slow-motion crash in 2022.

A rising trend line (magenta) off the 2016, 2018 and 2020 lows acted as support in October 2022.

We got a second push above the top of the blue trend channel; however the danger zone is a convergence of the top of the blue channel and the bottom of the black channel.

This occurs at around 16,000.

If you think stocks have plummeted now, the ensuing drop to the magenta trendline near 13,000 with take your breath away.

Breakage below the magenta Ghost Line will trigger a Monthly Rule of 4 Sell signal.

If that occurs, pure panic will be on the tape.

In sum, we’ve been pointing to 4970 on the SPX as that region is 360 degrees down from the 5275 all time high.

We closed at 4967 on Friday satisfying that projection.

It would not be surprising to see a 1 to 3 day bounce to 270 degrees down from high.