Hit and Run Morning Stock Report: 07/21/2022

A September To Remember

The rally continues according to expectations as the stocks that looked like they were showing poor relative strength on Tuesday

Played Ketchup on steroids on Wednesday.

Names include FIVN, NET, BILL, and SNOW to mention a few.

Several high flyers on our Hit List “came out” yesterday.

These include BILL, COUP, and ETSY.

They triggered little Rule of 4 Breakouts.

The easiest way to get a feel for the extension these, and several other stocks, had yesterday is to turn the charts upside down in your mind’s eye.

Why? Because it’s easier to visualize the effects of gravity versus the rocket science of propulsion.

How long can this rally continue within the context of a bear market?

Early last week I indicated that the SPX Monthly Swing Chart should turn up.

That means trade over whatever July’s high is in August.

Taking the low of 3636 and moving the decimal point we get 363.

363 is square August 1, suggesting that the turn-up of the monthlies will occur early in the new month.

That does not necessarily mean an uninterrupted glide path between here and there.

We could easily chew up some time with pullbacks before turning the monthlies up.

Interestingly, 403 for 4030 is also square August 1…so the Rule of Multiples is in play.

In other words, when there are two simultaneous squares or square-outs the idea of a turning point is embellished or enhanced.

As we know, 4020 has been on the radar for a rally for several weeks.

Then it was a hypothesis. Not anymore. Now the market has validated the conjecture of a move to 4020.

A daily SPX shows a Ghost Line pointing to this 4020 region

The normal expectation following a turn-up in the Monthly Swing Chart would be a knee-jerk reaction/sell-off.

If that occurs, and we get a turndown on the next Wheel of Time, the weeklies that hold chart support and then 4020 is exceeded, opens the door to a further rally into SEPTEMBER.

If that plays out, chances are you won’t want to sell. You certainly won’t feel like shorting.

But, as tweeted on Wednesday on the Hit & Run Private Twitter Feed,  I believe September will be one to remember for the Bears.