By: Jeff Cooper

Hit and Run Trading Morning Report - May 3, 2024

Paper Moon

When we make a trade that lasts for more than one day we are making a forecast about the market.

The longer the trade, the longer the forecast we are diving into whether we know it or not.

W.D. Gann did not make his forecasts off the cuff.

He went about it very scientifically and mathematically.

It has taken me decades to peer into the seer that is Gann to determine what he was doing.

With that in mind, let’s go down the rabbit hole.

One of W.D. Gann’s most important cycles was 90 degrees…be it 90 days, 90 weeks, 90 months or 90  years.

Let’s unpack that.

Recently we walked thru the Biblical Cycle of Time, Times and Half Time which is 3 ½ years

(Time is 1 year, Times is 2 years and ½ time is 6 months).

We noted that if you take two of these cycles to get a “vibration” (any vibration must resonate off something else to get a vibration) you get 7 years.

Now let’s expand the concept to include cycles within cycles or Wheels Within Wheels as it says in the Bible.
For example, 90 months is 7 ½ years.

365 (the number of days in a year) weeks is 7 years.

90 years is 1080 MONTHS.

I don’t think it is happenstance that the radius of the moon is 1080 miles.

90 years = 4680 weeks.

Look at that number

4 + 6 = 10

10 and 80

1080 again.

Happenstance?  Again?

Mr. Gann liked playing with numbers that related to the moon.

This is part of the secret to his coded novel The Tunnel Thru The Air.

He gave clues to that secret on page 69.

The protagonist of the book Robert Gordon (Gann) is born on 6/9 in the book.

69 is the symbol for Cancer.

It is the only sign in the Zodiac ruled by the moon.

The ancients, (when the Bible was written ovbiously) told time by the moon.
If you want to know something about cycles you need to know how the ancients told time.

It is not my purpose to reveal exactly what Gann was doing.
it is my intent to get you to explore for yourself.

From the above we know that the 7 and 7 ½ year cycles played prominently into Gann’s forecasts.

This is why a forecast is an art as much as a science because you are dealing with multiple cycles concurrently.

Everything has a primary and a secondary nature and cycle.

We know that Mr. Gann liked playing with the 90 Year Cycle.

In his own words:

“When we start from Sunrise or the Horizon and measure to Noon, we get an arch of 90 degrees, which is straight up and down starting from the bottom."

90 months or 90 years is a very important time period. The 90 Year Time Cycle is one of the very important ones because it is two times 45. This time period must always be watched at the END OF LONG TIME PERIODS.

For example:

A) 1932 was 90 years from 1942. Study the Wheat prices around this time. 1850-1851---add 90 years and we get 1940-41. Note low prices of Wheat around that time.

B) 1855, June, high for Wheat 170. 90 years from this period gives 1945. Wheat reached high in June, selling at 170, come contracts at 168 and 169.

C) 1850-51, extreme lows for Wheat. Add 45 years and we get 1895 when extreme low was reached. From 1895 we again add 45 years and we get 1940.

It is pretty straight forward--- for Gann especially.

90 years and 45 years.

What is 45 years in Months?

540 months.

Long time members will recognize this number.

540 degrees is a cube.

And since the ancients told time by the moon.

540 degrees or months is very important.

To recap, a true square is a cube with 6 sides of 90 degrees for 540 degrees.

So 540 months is a big dea.

So big that Gann called one his books 45 Years In Wall Street.

He did not call the book 45 Years ON Wall Street.

Because we are IN time not ON time.

So two of these cubes or true squares is 90 years.I’m not going to get into why TWO of these 90 year periods is so important.

This is something I go into with students I consult with.

Suffice to say that one of the factors is the 90 degrees from the horizon to Noon.

Given what the market did in late 1929 we were on alert for a major stock market shock or crash around 90 years later.

We got the Covid Crash.

We also got a big low in 2022 which is 90 years from the major low in 1932.

Great. So we’ve dodged that bullet and the coast is clear.

That’s a nice thought but has nothing to do with reality.

There are a few reasons why I say that.

1)      There are various ways to look at time and cycles which we’re going to do below.

2)      We are way overdue for a collapse. 2022 was a bear market but not a collapse.

3)      As well the big picture structure from the 1932 low implies that the next top (which may have already been seen) is a Super Cycle Top as large as 1929.

4)      The structure from the 2009 low, in my view, makes it imperative to view each market top as THE top. Risk is way more important than reward at this stage.

Below is the pattern from the bear market low in 2009.

The last section may or may not be correct, but the Wave 3 is.

That is why I say any top could be THE top.

As you know from past reports this year, arguably December 2021/January 2022 was the top of wave 5 and October 2022 was the bottom of an A Wave and we have completed a B wave high ala the B wave top in 2007.

Above I noted there are various ways to look at time and cycles.

Rather than on a linear basis they can be looked at on a spiral logarithmic basis.

For example, let’s  look at how one cycle vibrates off another sequentially or in a progression.

We know that the 1987 crash is 58 years from the 1929 crash.

And the number 58 squares out with October 29th, the day of the big one in 1929.

We also know that the year 1987 squares out with October 29th.


I don’t think so.

I think it’s synchronicity.

The year 1929 squares out with May 19th.

It also squares out with November 21, the crash low in 2008.

So May 19th is opposition November 21st.

Above we noted that it is 58 years from 1929 to 1987.

The next number up from 58, the next full rev or square up from 58 is 92.

We are 92 years from the major low in 1932.

This may be pointing to a low to high cycle.

2024 is 37 years from the 1987 crash.

On the Square of 9 Wheel, 37 points to May 7th.

Interestingly the year 2024 is opposition May 7th.

It looks like May and 2024 vibrate off 1987.

As well, the ratio between the 95 years from 1929 to 2024 and the 58 years from 1929 to 1987 is a Fibonacci  .061.

The ratio between the 37 years from 1987 to 2024 and 95 (the years from 1929 to 2024) is a Fibonacci 0.38.

We have a high on  March 28th on the SPX.

Measuring from that time period the Gann Panic Window opens on May 7th.

We have compared the patterns of 1929 and 1987 and 2020 before in this space.

Is there any similarity in the patterns?

In 1987 and 2020 the meltdowns were 34%.

In 1929 the drop drop was 49%

In 1987 the SPX retraced 50% of the first drop, pulled back and rallied to trace out a near .618 Fibonacci retrace.

In 1929 the retrace after the first leg down was .618.

A 50 % retrace of the current SPX drop is 5115.

Monday’s high was 5123

A .618 retrace ties to apx 5180.

This presumption is we have satisfied a first leg down, but the first leg down was deeper in the prior aforesaid crashes.

The SPX has lost 5.9% off its high here in 2024.

The first leg down in 1987 was  8.6% on the SPX versus 17% for the DJIA in 1929.

However, the lead dog, the Semiconductor Index (SOX), had a 17.8% decline.

So we want to observe the action should the SOX backtest its 50 day line.

It may be a paper tiger.

Based on the rip in many techs yesterday, it may feel like a bottom on April 19th was successfully tested on Wednesday/Thursday.

However, if you’re a bull you need to be aware that if 5.9% was the entire correction it would be the puniest correction in a bull market ever.

Next week should tell the tale.

The market is up this morning following AAPL’s report, but not nearly as much as one would think.

If this is all the bite the bulls can take, it means there are a lot of sellers out there on spikes.