By: Jeff Cooper

Hit and Run Trading Morning Report - May 13, 2024

A Big Week

W.D. Gann wrote that all important tops and bottoms are related in time and price.

There is only one technique I know of that proves this balancing or symmetry in time and price:

The Square Of 9 Wheel.

Below is a monthly SPX showing the 2000 top of 1552.

In order to work easily with The Wheel I’m going to move the decimal point, essentially giving us the SPY prices at these tops and bottoms.

For example 1552 becomes 155 etc.

The Square of 9 Wheel below shows how the following SPX  tops all “point to” or are harmonic with May 17th.

The 155 top in March 2000

The 287 top in January 2018

The 339  top in February 2020

The 481 top in January 2022

The 526 top in March 2024

Here are the time/price relationships:

155 purple is square May 17

287 yellow is opposite May 17

339 red is square May 21

481 blue is direct May 17

526  green is opposite May 17

As well, not show on the above image, the flash crash low in Feb 2018 at 252 is direct May 24th.

In addition the Feb 2016 low of 181 is square May 17.

The major bear market low on March 6, 2009 was 666.

666 red is direct June 12/13 (purple)

The December 2018 crash low of 234 green is square June 13.

The March 2020 crash low of 219 blue is opposition June 13th

 The market crashed in May 1962 striking an ultimate bottom in June.

On the Square of 9 the year 1962 squares out with June 13th.

1962 was 62 years ago .

62 is direct with June 6th which ties to the 666/667 low in 2009.

The year 1921 is direct June 6.

Late August 1921 was the major low prior to the Roaring Twenties Bull Market.

This adds more credence to my mirror-image foldback thesis.

But wait there’s more.

The year 1929 is direct May 17th.

May 17 is the Buttonwood Agreement that started the NYSE in 1792.

The year 1792 squares June 6 and the price low in 2009.

The year 1792 is direct March 6th, the low of the Great Recession.

The year 1792 is opposite early September, the high prior to the Great Depression.

Maybe something, maybe nothing but the time region of May 17th looks like a big turning point… and it ain’t a low.

As well the time period around June 13 sets up as a big low.

If there is a big high this week and a big low in just 3 weeks, there’s only one way that can occur.

In sum, as the SPX and Q’s challenge their all-time March highs calls are being bought at a 2 to 1 ration over puts.

As well the premium in puts has been crushed.

Apparently most folks are convinced that it’s Buy In May and Go Away.

Under the surface the smart money is seeking safe havens in gold and utilities.

We’ll take a look at those charts tomorrow.

Despite the push toward the March high’s, the QQQ shows a potential bearish Triangle Pendulum setup.

A Triangle Pendulum sell setup occurs when a stock or index breaks out to the topside of a triangle as the QQQ did Friday only to reverse in short order.

Breakage back into the triangle is a warning.

A failure below the bottom of the triangle which currently ties to the 50 day line, is an outright sell signal.

Opposite for Triangle Pendulum buy signals

While the Q’s broke below a Bottoms like at the end of April/early May this is not considered a Triangle break because a triangle pattern was not fully formed.

The Pendulum signal is ideally triggered in the range near the apex of the triangle.

Notice that breakage below the bottom of the triangle ties to the 15 day moving average.

I use the 15 day moving average to help determine major changes in trend because 15 sessions ties to the key 3 Week Chart.

This looks like a big setup bookended by Wednesday’s CPI.