By: Jeff Cooper

Hit and Run Morning Stock Report: August 24th, 2022

There is little new to add to the price action.

After the first hour, markets bounced somewhat but we said not to believe it because the SPX had missed turning down its 3-Day Chart by 2 cents.

Sure enough, it gave up the rally and traded below Monday’s low.

No Turnaround Tuesday for the bulls.

Now we have the first turn down in the SPX 3 Day Chart since July 26.

That marked a low and had the benefit of a Combo signal-- a Holy Grail-- a test of the rising 20-day moving average.

We are dealing with a change in character this week; however, as the index delivered two consecutive closes below its 20-day.

This is unusual given the Runaway Move that preceded this pullback.

It suggests something pernicious may be afoot.

Be that as it may, markets are trying to make a stand right in the low 4100 region and the NYMO moved up while the SPX closed in the red for a positive divergence.

We’ll have to see if the SPX can get some traction.

That said, if a dramatic Wave 3 decline is on the table, then the most I would look for is a 1 to 2 turn up in the dailies-- ie, trade today above Tuesday’s high and POSSIBLY trade on Thursday’s above Wednesday’s high.

Interestingly, that would put the SPX in the daily Minus One/Plus Two sell position in front of Powell and Jackson Hole.

You can’t make this stuff up.

August 25th of course is the anniversary of the 1987 peak and as you know Gann was big on anniversary dates.’301 QQQ is 180 degrees straight across and opposite August 25th so if the wheels come off going into the weekend…say hello to my little Square of 9 friend when we get to 301.

Energy and fertilizer stocks were the stars of the day.

In energy, names include CPE which broke out, VLO, EOG, and FANG.

Fertilizer stocks that ripped include CF and NTR.