By: Jeff Cooper

Hit and Run Trading Morning Report - May 16, 2024

The T-Rex In the Ointment

Price action into Friday will be critical in determining if the SPX is in the midst of a significant breakout through the late March highs or whether this is an Throw Over, false new high---a B Wave

Mirroring the pattern from early 2020 prior to the Covid Crash.

The wave structure and Time/Price synchronicities shown in this space suggest this IS a false breakout is in play.

However,  we must be mindful that at the end of major cycles and this is a Super Cycle degree, that a surge on top of the surge we’ve seen since late October 2023 is theoretically possible.

This is the T Rex in the technical ointment.

In addition to the major time and price cycles/square-outs outlined in prior reports, we have culminating peaks for three key cycles associated with bear markets due to hit this year:

The 3.5 year cycle. This is the Biblical Time, Times and half Time of 1260 days.

Two of these cycles is the important 7 year cycle.

The 19 year cycle in panics and real estate prices.

And a peak in sunspot activity. The last five sunspot cycle peaks were in:

1969 (start of the 14 year post WW2 bear market).

1980 (gold and silver crash)

1990 (Tokyo stock market crash, 2000 (NAZ crash) and 2014 (minor decline in commodity prices).

In 1930 and again in 1968 the sunspot cycle and the 19 year cycle peaked simultaneously---with disastrous consequences in both instances.

This year, both cycles will gain peak simultaneously for the first time since 1968.

Interestingly, on the Square of 9 Wheel, 1968, the year, squares-out with the end of May.

Timing is going to be critical. Any top can be a MAJOR TOP.

Any failure of a breakout will be a blaring siren.

That is why I say the next few days and this weekend will be extremely important to gauge.

The exact timing will depend on what happens into the end of May which in turn will hinge on what

We said above about the next 2 to 3 days.

A debacle is on deck, but whether it is around the corner as I have thought or is later in 2024 is the question.

An imminent collapse will clarify that the top is in place, whereas a continuation of the upside breakout will suggest that there is a T-Rex in the ointment…that the structure, the overbought signals have become irrelevant.

This only happens during terminal blow-off phases of a mania.

What does the Wheel say?

The October 2023 SPX low was 4104 (410).

410  is direct/conjunct March 28th, the prior top until yesterday, Wednesday.

Time points to price, price points to time.

4950 (495) was the April 19th low.

495 is direct/conjuncts March 28th, the prior top.

5264 (526), the March high, points to May 17th. So this is a potential Time/Price square-out with time, May 17th, catching up to price (5264).

535 (5350) is 180 degrees straight across and opposite April 19, the recent swing low.

533 (5330) is direct with October 27…the major low prior to this Runaway advance.

So you can see why I think momentum past 5350 opens the door to a mania.

I should say FURTHER mania.

At the same time a reversal back through 5250 is the first signal of an impending collapse.

W.D. Gann liked to say about markets, “As above, so below.”

Checking the bottom from November 2008/March 2009, we see an Undercut low in March ’09.

The Primary low, the low around the world, the low of the QQQ was in NOVEMBER 2008.

The November 2008 SPX low was 741.

The March 2009 low was 666.

This represents an Undercut of 75 SPX points.

It was only 6 trading days from the drop below 741 to the ultimate 666 low.

I can’t help but wonder if as Gann would say, “As below, so above.”

In other words what if we see an equal and opposite “vibration” of a 75 point Overthrow, above the prior 5264 high.

This points to 5339.

This ties to the afore said 5330 square-out with the October, 2023 low potentially.

Yes, 75 points was a huge percent of an Undercut in 2009 versus a possible 75 point Throwover from today’s prices; but, the Law of Vibration works in its own Wheelhouse.

There is another “harmonic” to the 2008 crash.

The pre-crash high in 2008 was on May 19th.

The crash was 180 degrees/days into November 21st.

The May 2008 pivot high was 1440. It squared-out with mid-May.

So the Wheel did a great job for us then.

The crash from 1440 to 666 is precisely 6 revolutions of 360 degrees. So a Master Square.

(a true square having SIX sides).

This is not a time to dismiss the message from the Wheelhouse.

However, that being said, we must allow for the possibility that if the market does not turn back down over the next week in MAY, of an ongoing advance.

I do not see that in the wave structure at the moment.

For example, above we mentioned the Cycle Cluster in 1930.

The 1929 top occurred prior to that idealized cluster.

If an engineer or scientist were trading back then with a familiarity of these cycles they would have thought the coast was clear in the Fall of 1929.

Markets don’t work that way. They are as much art as science.

So while this current Cycle Cluster could theoretically stretch out into the Fall of 2024,

Caution is warranted on any foot-fault by Mr. Market.