By: Jeff Cooper

Hit and Run Trading Morning Report - April 24, 2024

Where Is the Bull/Bear Pivot?

The above daily SPX shows the dual Fugazy highs, the false Throw-Over highs, in January 2022 and March 2024.

I connected the Highs Before the Highs…the internal highs (blue).

I paralleled a line(blue) off the October 2022 low which ties to the 4000 region.

I also paralleled a line (blue)off the High Before the Low, the internal pivot high, which intersects the July 2023 high and the pivot low in January 2024.

These multiple points prove the geometry.

The two most important lows in the last two years were the October 2022 low and the October 2023 low.

I connected those (green).

I then paralleled a line off the most important top prior to the March 2024 top, ie, the July 2023 high.

This upper green Ghost Line also defines the first consolidation high in December 2023.

A Ghost Line is a trend line that seems to be dead but shows up as a live pivot out in the future.

To recap, in early December 2023 we stated that the SPX carve out a base for around a month from December 21st through January 21st and then ramp to a new all time high around 5 months after the October 2023 low.

That’s March 2024. We got another Fugazy Top.

I think it is fair to say that March was an Overthrow High given the angle of attack to the downside.

The point of this that there are multiple reasons for the bounce off last Friday’s low:

1)      The SPX struck the bottom of the green Ghost Line.

2)      The SPX satisfied a 360 degree decline from the 5265 all-time high at 4970 last Friday.

A number we’ve flagged for a month.

Of course when you get there low always looks lower.

3)      Last week the SPX tested its 20 week moving average for the first time since capturing it last November. A weekly Holy Grail buy setup.

4)      The SPX turned its 3 Week Chart down last week. It does so by carving out 3 consecutive weekly lower lows as depicted in the weekly SPX below.

Importantly, however, when the SPX turned its 3 Week Chart down last week it kept going.

In a continuing strong bull market a turn down in the 3 Week Chart, especially the first turn down in a Runaway Move, should define a low.

Last week the SPX dropped another 150 handles.

That’s potentially a Sign of the Bear (SOB).

Consequently, the pivot where the 3 Week Chart turned down should be quite important and telling. That number/level is 5107.94 or 37 points higher than  Tuesday’s close.

As well, trade above Tuesday’s high today will turn the 3 Day Chart up.

If the trend has turned down, a turn back up in the 3 Day Chart should define a high soon in terms of time and price.

Above we said that 360 degrees down from the all-time high is 4970.

180 degrees down is 5120. By definition, 18i0 degrees up off 4970 is 5120.

On my Square of 9 Wheel of Time & Price, 510 (5100) squares Friday’s OpEx.

That becomes a “live” pivot/square-out + or – a few days.

This 5100 region is the Bull/Bear Pivot.

Breakage below last weeks lows opens the door to the SPX 50 week moving average at 4635 region.

Below that is Line of Most Resistance…the Bottoms Line from October 2022.