Are the Hounds of Hell Coming?
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The fascination in the market for a technician is that like a crossword puzzle, every bar like every word in the puzzle, gives a new piece of information.
Recent reports have walked through the symmetry between the 1929 top and the current pattern.
As W.D. Gann stated, every major high and low in the market is related by time and price harmonics to other major highs and lows.
As you recall, the DJIA high in 1929 was 386. July 20 ties to 386 on the Square of 9.
The DJIA high close in 1929 was 381, which ties to August 8/9.
The DJIA set a record high on July 20 and a lower pivot high on August 9.
This is the 180 degree mirror reflection of the January 20/February 11 bottoms.
We have been focusing on August as a major turning point.
Whether that is a high early in the month near the August 12 anniversary of the 1982 low or a blow-off into late August remains to be seen.
Be that as it may, early August 2016 is 386 weeks from the March 2009 low.
At the same time the low for the year was 1810 SPX.
386 points added to 1810 gives 2196.
On Tuesday, August 9, the SPX set an all-time high of 2187 — a half of 1% from the 2196 idealized square-out level.
In other words, this balances (or squares out) the vertical price with the horizontal time.
Time IS price, price IS time.
Interestingly, 2192 is 90 degrees square the date of the bear market low on March 6, 2009.
March 6th is straight across and opposite the first week of September the date of the peak in 1929.
This links the two largest crises/debacles 80 years apart — the high prior to the first crisis is straight across and opposite the low after the second crisis.
There was a crash between these two that proved to be an isolated incident that did not relate to an economic crisis.
This was Black Monday, October 19, 1987.
It is fascinating that 386, the high in 1929, is 90 degrees square October 19.
Happenstance?
As Gann said, major highs and lows resonate off each other in time and price. This is Gann's Law Of Vibration.
We are 87 years from 1929. On the Square of 9 Time & Price Calculator, 87 ties to early September and early March.
So we are 87 years out and 87 points to the peak in 1929 and the low in 2009.
Conclusion.
Even in a continued bull market, the presumption is a 5 or 10% correction should play out.
However, given the long flat formation at 2100-2110, any violation of that breakout pivot indicates that the SPX probably saw an overthrow, a Bull Trap that could see considerable selling.
If there is one thing players don't like it's the feeling of being trapped and being hood-winked.
Of course. the last 5 year advance started with a Bear Trap from August/October 2011.
The SPX carved out a huge outside up month in October 2011.
If we get a large range reversal month in August or September, it will be a sign that cycles are going to exert downside influence.
Strategy.
The SPX is either topping just below 2200 or is going to run to 2290 ish into the end of August/early September. Youse puts up ya money, youse takes ya chances.
Although the market does its diabolical best to misdirect players, it should be easy to see which one once Mr. Market shows its hand –probably over the next 2 to 3 days.
We have had two quick downdrafts since last August. I suspect there could be 2 to 3 air pockets between August and October if the above Gann symmetry plays out — despite The Hand unleashing a swarm of V's since last summer.
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