Editor’s Note: This is a special FREE edition of Jeff Cooper’s Daily Market Report.
In this piece, Jeff discusses:
Our work set up last week set up as a major turning point.
The NASDAQ, which led the way up, left a weekly signal reversal bar in the spirit of a Key Reversal week.
The SPX and DJIA went on to score new all-time closing highs this week, luring players into thinking that options expiration and rebalancing were one-off culprits in last Friday’s reversal.
However, we’ve walked through several cycles and time/price harmonics that say the reversal was the real deal.
Earlier this week, we flagged 2431-2433 as the vital points to watch.
This is the level that is 90 degrees square this week on my Square of 9 Wheel.
It is a mirror image of the picture at the 2009 lows when the price of 666 squared March 6.
Yesterday’s report covered the important total solar eclipse on August 21st and how W.D. Gann believed eclipses were ‘activators’.
We sent a note saying that August 21 points to 2441.
Last Friday’s high was 2446. Yesterday’s high was 2443.
This eclipse is symbolic of a significant event, which may occur at any time months around August 21.
Whatever it is, it is going to relate to the market because August 21 is 90 degrees square May 17, the anniversary of the founding of the exchange.
Interestingly, we are 30 years from the late August 1987 pre-crash top, a 360 cycle in months.
This ties to the near 30-year Saturn cycle. Saturn is known as Old Man Time.
The cover of Time magazine in August 1987 featured a rare 7-planet alignment on the cover.
I can’t help but wonder if that Harmonic Convergence will be triggered in a tunnel through time by this year’s eclipse.
Be that as it may, we need to be mindful that two of the three greatest market tops, 1929 and 1973, form a T-Square with the year 2017 on the Square of 9 Wheel.
A waterfall event may be on the table in 2017.
Last week’s flash may be foreshadowing it.
Mr. Market has done a masterful job of setting up a ‘boy cries wolf’ psychology by making every break a false alarm and buying opportunity.
There are too many indications and harmonics here to shrug off the idea that a new wolf of wall street is at the door.
This is a good time to believe what you see.
While some savvy old-time investors remark about how they run into, not away from a bubble when they see it, these pros are wise enough to know when to run when it looks like the air is coming out.
I think such a change in character is oozing.
I do not believe last week’s break in the glamours was a one-off.
Our go-to go go names like SHOP, AAOI, and OLED can’t get traction and show several serious distribution bars.
As you know, NVDA, AAPL and AMZN all squared out.
TSLA bounced back to a new high on the heels of a famous money manager pumping it and pouring gasoline on the fire.
However, as you will recall, we stated that $384 satisfied a major square-out with the Feb 2016 $141 low.
Yesterday, TSLA hit $384.
The stars are in alignment.
Oil’s plunge beginning in 2015 mirrored the plunge in the stock market into January/February 2016.
Oil was the tail that wagged the market dog.
When a bottom was engineered in oil, the market followed.
Remember how all we heard was that every trader was keying off the price of oil?
That correlation decoupled.
However, I can’t help but wonder with oil threatening a parabolic sell arc, whether the stock market has some severe downside catch-up on the table.
Yesterday the market bounced back after a selling spree on the heels of a more hawkish tone by the Fed.
With today’s breakaway gap, that clearly looks like a sucker’s rally.
Trade below last Friday’s swan dive will blemish the idea that it was an outlier and a buying opportunity.
Dr. Fed has created a Frankenstein with their policies since 2008.
It’s not going to be an easy to teach this Frankenstein to waltz.
I can’t help but wonder whether Janet is Tunneling Through the Air to 1937.
Breaking below 1400 will trigger a big picture Rule of 4 Sell signal.
Bearishly, the leading SOX left a large-range Topping Tail from a new high last week, creating an Iguana sell signal.
It is in jeopardy of closing below a 1-year trendline this week if selling persists today.
The SOX is stretched. It has not turned its 3 Week Chart down in a year. It is entitled to breathe.
The question is whether it gulps.
What could possibly go wrong with the Fed’s plan to normalize trillions since they’ve done such a good job of being ahead of the curve and thwarting panics in the past?