By: Jeff Cooper

Hit and Run Trading Morning Report - May 8, 2024

Orthodox High

I am counting March 8th as the orthodox high on the SPX.

The index topped that day at 5189 and left a Key Reversal Day.

The breakout over 5189 to 5264 was brief.

The false breakout was underscored by a large range outside down day on April 4th.

Connecting a Tops Line from the March 28th actual print all-time high and the April 4th high produces an important line.

Yesterday the SPX pushed above that line but tailed off.

It also left an N R 7 Day, the narrowest range in 7 days.

These contractions in range are typically followed by an expansion in volatility within a day or two.

Tuesday’s high  of 5200 with a close of 5187, essentially tested the March 8th orthodox high of 5189.

Is it possible this is a Right Shoulder of a Head and Shoulders Top?

Yes it is.

Breakage back below the 50 day line and Monday’s gap indicate we may be entering a powerful 3rd wave decline.

Wave 1 down was the drop into April 19th and corrective wave 2 would be the countertrend rally into this week.

Breakage below Friday’s opening gap validates this idea.

Starting from the March 8th low I paralleled a declining trend line off the Tops Line.

Notice that the April 19th low Pinocchioed the bottom of the channel.

Currently the bottom of the channel ties to that same level…4950.

When 4950 is taken out we should be in the heart of a 3rd wave drop to the 200 day moving average

Now at around 4710.

In sum, anchoring “zero” on the Square of 9 Wheel to March 28th puts the eye of the Gann Panic Window squarely at May 17th. This is the anniversary of the NYSE founding 232 years ago.

232 is 180 degrees straight across and opposite March 28th, the ATH.

1792 squares out with March 6, June 6th, and early September.

March 6th and early September define the low of the Great Recession (2009) and the high prior to the Great Depression.

June 6th is going to be very pivotal this year.

As you know, June 6th aligns with 666, the low SPX price on March 6, 2009.

June 6th also aligns with the number 62.

62 years ago is 1962.

The market crashed into the end of May with an undercut low in June…mirroring the crash in 1929.