By: Jeff Cooper

Hit and Run Trading Morning Report - April 29, 2024

Has NVDA Timed the Top of the Bull Market Like RCA in 1929?

“You had your time, you had the power.”
-Radio Ga Ga, Queen

“Many people, not content with the forgetfulness provided by sleep…in one common wish implore from nature’s hand the nectar of oblivion.”
-Samuel Johnson, 1752

“The majority of men, especially among the masses, do not possess clear and reasoned ideas on any subject whatever outside their own speciality. The leader serves then as guide.”
-Gustave Le Bon

The SPX struck the key 4970 square-out Friday, April 19th and proceeded to rebound in a Zig Zag or A B C pattern.

To recap, 4970 is 360 degrees down from the 5265 all-time high.

The SPX also kissed its 20 week moving average on April 19th.

This was a good place to expect a rebound.

We got one.

Friday  morning the Hit and Run Private Twitter Feed noted that 510 (5100) squares-out with April 26 (Friday) suggestion a strong likelihood that the SPXY would be magnetized to 5100 for OpEx Pinball.

The index closed at 5099.96 after pulling back from session highs at 5114.62.

You can’t make this stuff up.

You know how much you could have banked know this “magnet” in the morning?

However, Friday’s continued rebound is at near-term resistance:

1)      a 20/50 day moving average Bowtie is at current levels

2)      the SPX kissed the top rail of a declining trend line

3)      180 degrees down from the all-time high is 5120. Conversely, 180 degrees up from the idealized 4970 low is 3120.

Consequently, it would not be surprising to see the SPX perfect a push to 5120.

However, much beyond that, especially, on a closing basis takes some of the energy out of the structure for an immediate panic in May.

So early this week is important. Mr. Market will be talking.

The bear case, backstopped by a confluence of cycles flagged in this space for months, also revolves around the geometry of the current structure from major October 2022 low.

The mind of Mr. Market is math and he’s what it looks like he’s thinking.

I connected the two biggest lows since the January 2022 top.

These are the October 2022 low and the October 2023 low.

I then paralleled a line off the high before the low, the August 2022 high, an important pivot..

It’s a bull’s eye with the March all-time high.

Then I created a mid-channel line.

Fast moves come from false moves.

The top in January 2022 was a false breakout of a SEVEN week consolidation.

A fast decline ensued.

Likewise the October 2022 low was a false undercut of the June 2022 low.

I took a like from the false breakout in January 2022 and extended it.

Where the mid-channel line of the blue trend channel intersects with the red horizontal line, the SPX exploded.

If you connect the bottom of the trend channel you get a 9 week waterfall decline from August to October 2022.

Connecting the March high with the bottom rail of the blue trend channel completes a parallelogram.

The synergy opens the door for a potential 9 week waterfall from the March high.

In other words, 5 weeks down taking us into the first week of June.

This is interesting for two reasons, June 6th aligns with 666, the major bear market low in 2009.

It also aligns with 1921, the year, using the number grid in the Square of 9 as years.

That got my attention because the summer of 1929 was the start of the Roaring Twenties bull run and I’ve been suggesting the current market is a mirror image fold-back with 1929.

For example, late October 2023 marked a low followed by a melt-up into the spring.

1929 saw a meltdown into late October followed by a rebound into April 16, 1930.
The Great Return To Normal Rally. Until it wasn’t.

Interestingly, the SPX fell out of bed this year on April 15th when it knifed thru its 50 day line.

In sum, the SPX has rebounded, nearly backtesting its 50 dma.

A little push higher today will fully kiss the 50 day which currently ties to the aforesaid key 5120 level (180 degrees down from high).

That brings us to NVDA. In keeping with Gustave Le Bon’s quote at the top of this piece, “The leader serves as the guide.”

On Thursday morning, using the Square of 9 Wheel, Hit and Run mapped the projection for a drive by NAVDA to the 870, noting that eclipsing 870 opened the door to 884.


360 degrees up from 756 is 870.

Another 90 degrees is 884.

NVDA exploded to 883.31 on Friday before closing at 877.35

You can’t make this stuff up.

The first week of May “points to” 884 and squares the 756 low.
The end of the first week of May is going to be pivotal for NVDA and the market.

The Square of 9 Wheel prints money. Full stop.

Every bull run has its glamour stocks that serve as anthems for those long of stock.

These glamour stocks are underpinned by stores which shine a magnify the narrative of speculative sentiment of the bull.

In Green mythology, Anthemoessa, is said to have been the island home of the Sirens, from whence their plaintive songs drifted through the dark, luring sailors to their death on the concealed jagged rocks. The doomed would subliminally understand the fatality of the draw towards the beautiful sounds but would, or could not care to resist.

Likewise, every bull market has an icon that spearheads speculative fascination and captures the imagination of players who get ultimately swept up in a euphoria where the stock price and the company and their products become indistinguishable.

It’s about psychology. Everyone wants to be on the band wagon when the banjo’s playing.
When the music stops, being part of the crowd loses its panache. Mood is the money of the mind.

A stock is either under accumulation or under distribution or going sideways, buying and selling having reached equilibrium.

The great mistake that many investors make is to confuse a company with its stock.

They are two different things.

The NVDA story is reminiscent of RCA in the 1920’s Radio Corp of America.

RCA was simply THE icon of the bull run into the crest of the 1920’s bull run.

In mid-September 1929 before the big market crash, RCA fell 25% from 114 to 86 in 10 days. It was just the Fat Lady Gargling. When the market crashed that October, RCA fell from 85 down to 26.

It closed the year at 44, more than a 50% rally. The coast was clear. Right?

RCA fell to 2 in mid 1932.

True believers kept buying all the way down thinking it was cheap and looking for the prior strength to be revisited.

But when that strength fails to show up again, dashed expectations cause a new round of selling.

It was the road to perdition for those buy and hold forever investors who smirked knowingly at parties that you can never pay too much for ‘Radio’.

It was The Future. Like AI.

The chart above shows RCA’s spectacular climb to The Top in 1929.

The larger chart shows what Nvidia shares would do to replicated the swings that set up RCA’s plunge to hell.

The last high was a marginally new high, a false breakout.

That said, the market is not a Rolex.

Currently NVDA shows 3 lower highs. Often times fast declines happen from 3rd lower highs.
This is my Power Surge pattern.

So this week is going to be a tell from the Emperor.
If it clears and holds over 907 (the last swing high on April 11th), it may indicate a new high is on the table.

However,  a drop here back below the 20 and 50 day moving averages at 850 ish puts my Power Surge sell setup in the crosshairs. A failure below the 756 swing low opens the door to the 200 day moving average at 579.

There was as similar mind-set in the early 1970’s about a body of stocks called the Nifty Fifty.

Stocks like Polaroid and Kodak were considered one-decision stocks. Buy.

There are always historical anecdotes in the market that underscore how human nature never changes. Because it doesn’t. This is why we look at patterns borne out over history.

Will the mania in NVDA mirror the mania in RCA?

Will the charts coincide?

The action this week may hold the key.

As W.D. Gann stated, “History repeats itself. That is what I have always contended,---that in order to know and predict the future of anything  you only have to look up what has happened in the past and get a correct base or starting point.”

Is NVDA timing the top of the bull market?