“You know my name, you know my number, what’s up with you?” – The Beatles
Although the indices have been going sideways for nearly three months, speculative sentiment has been off the charts in several sectors.
There have been vertical moves in EV plays, China names such as PDD and DADA (including China EV plays such as XPEV) and, of course, biotechs.
Biotech has been a standout and Hit & Run members captured moves in names such as PRLD, PSNL, HRMY and CRDF.
As well, we took NVCR as it came out, triggering a Cheetah (Cheater Entry… below a pivot high). Its decisive expansion in volume on Friday augurs well for continuation.
Catchup plays in tech percolated throughout the tape as well, underpinning the bullish tone.
For example, members took FSLY long on several swings last week based on the idea that Pin Action to 85 would prevail into Friday.
Following are some of the audibles on FSLY from last weeks Hit & Run private Twitter feed.
So, although the indices are stuck in a wide and looks-sideways range, the opportunity was there to capitalize on many pristine setups.
It just goes to underscore that my strategies revolve around the stock and its own innate underlying trend and structure. As long as the market is not getting hit, institutional money will be deployed into their focus list. Regardless of what the market is doing, individual titles rally strongly.
In fact, in an aimless, range-bound market, those few stocks on the move can accelerate as they capture the attention of more eyes by virtue of their strong relative performance… and therefore more money, often resulting in vertical moves.
The market has seemingly shrugged off the surge in the pandemic, but it is worth considering that the market seemed to shrug off the looming financial crisis in late 2007 as well — until the bell rung on the first trading day of 2008.
Likewise, the writing may be on the wall as to an economic downdraft in 2021.
The fat lady may be gargling.
This being a holiday week may see uneventful trade, but Time & Price harmonics point to early December as potentially pivotal.
Allow me to explain.
The March crash low was 2192 SPX.
The following Square of 9 depicts how 2182 (green) aligns with December 5 (red).
On its own this is interesting, but the fact that both 2192 and December 5 are 180 degrees opposite the important September 2 closing SPX high adds add significance to this early December time-frame.
As well, notice that 2192 and 3581 are both square the early September blow-off high.
W.D. Gann wrote that when time and price are equal or square-out, expect a change in trend.
As you can see, the beginning of September squares out with 3581, the closing high at that time, for a time/price square-out.
A single time/price harmonic is enough to be a turning point.
Now in early December we have a cluster of time/price harmonics which taken together suggest another turning point — a high, if the market is at highs at that time.
Alternatively, if the market is pulling back into early December, the indication may be a turn to the topside into a year end Santa Claus rally. If so, the Square of 9 Wheel targets potential to 3700.
With the SPX challenging the top of a long term channel following two prior rollovers in 2018 and 2020, we must be mindful of a 3rd such rollover in 2021.
