The SPY closed at a record high of 417.26 on April 16.
Six days later, a new nominal new closing high of 417.61 was struck.
Today will be the important Gann Day 7 potential turning point day from April 16.
Monday’s NR 7 Volatility Contraction Day (the narrowest range in 7 days) underpins the idea of an expansion of volatility today/tomorrow.
For its part, the NAZ came out of a potential Cup & Handle.
The left side of the Cup is the February 16 peak at the record 14,167 region.
The right side of the Cup is the April 16 peak.
The action in the NAZ supports the idea of a thrust to 4225 SPX flagged in this space in recent reports.
4265 is 65 squared with 65 aligning with May 6 (+ or -).
In and of itself, this doesn’t paint a picture.
However, when you consider that the 666 bear market low in 2009 is 25.80 squared and is straight across and opposite 65, it warrants having on our radar.
Red is 65
Green is 25/26
Purple is May 6
Blue is 421 (SPY)
Notice that 421 (for the SPY) forms a T-Square, triangulating the 26/65 and May 6 axis.
In keeping with the Rule of Multiples… the more alignments or time/price harmonics, the greater the likelihood of a turning point.
As well, the mid-May time period is 90 days/degrees from the important Feb 16 peak… a time period which witnessed Buying Climaxes in many hot stocks.
So, the question is, does the first week or two of May represent a return rally in the NAZ?
If so, May could be the mother of Sell in May and Go Away.
The structure of the SPY underscores the idea of complete structure in play.
From the important September 24 SPY, it appears we are in the 5th of a 5th wave completion.
The rally from September 24 to Oct 12 is Wave 1. Wave 2 is the correction into October 30.
Wave 3 is the advance into February 16.
March 4 carved out a 4th Wave low.
Breaking down the move from early March and drilling down to the hourlies shows an A B C corrective 4th wave into April 22 of this larger 5th wave.
Many of the growth titles and beaten down former high flyers showed a change in complexion last week consistent with a surge where leaders and laggards join hands for a possible crescendo.
Let’s take a look at a few titles that showed signs of waking up last week.
AFRM was a hot IPO that came public in January.
It suffered a more than 50% haircut from 147 to 63 last week.
It undercut a flat formation on Tuesday and knifed back up through the flat line on Wednesday, triggering my Boomerang buy pattern. It further validated the turn by capturing its 20 day moving average and Hit & Run members took it long.
RUN, a leader in solar, struck a new low on April 21 but left a Lightning Rod buy signal (a Large Range Outside Up Day… LROD) and we used it as a long play.
The signal elicited a more than 10% move in a few days with RUN kissing its overhead 50 day line.
JMIA left a Gilligan buy signal on April 21st at its 200 day m.a.
A Gilligan is a gap down to a new 60 day low with a close at/near session highs.
NIO also left a Gilligan buy signal at its 200 dma on April 16.
It followed through, rallying from 34 to 42.60 yesterday, tagging its 50 day line in the process.
NET actually front ran many techs when it reclaimed its 50 day line on April 13.
It backtested its 50 day on Thursday and Hit & Run took it long on Friday.
SIMO setup long on Wednesday April 21 and we called an audible on the Hit & Run Private Twitter Feed.
It stutter-stepped but never stopped us out prior to exploding on Friday.
Recent hot IPO PATH showed a change in character in speculative sentiment in the growth arena we traffic in.
PATH IPO’d last Wednesday and its upside follow through signaled a stealth change in speculative fervor.
Consequently, using the 10 min to identify a pullback entry, Hit & Run members took it long at an average price of 73.83 on Thursday/Friday.
We trimmed on the way up, selling the balance of the position above 80 on Monday.
As the Square of 9 below shows, 81 is 180 degrees up and opposite from the 64 low
Green is 64
Red is 81
Throughout the years I have been writing the Hit & Run Report since 1996, many readers have recognized the accuracy of our stock projections, yet many have a hard time understanding the lens through which I view the markets.
In sum, in all the years I have been doing research and analysis into what makes markets move, I have not found a single form of analysis that provides the kind of market context that the Square of 9 Wheel of Time & Price does.
Succinctly, it is the best market tool on the planet, allowing traders to sell spike lows and buy spike highs and identifying when the trend is going to continue.
Coupled with my Swing Method (the 3 Day Chart and 3 Week Chart) to identify the short and intermediate term Lines of Least Resistance, the two disciplines stack the odds in of this crazy game in our favor.
In sum, while the SPX has gone nowhere for the last week and a half, under the hood many names have shaken off the selling.
The bull case is melt-up, new leg higher. The bear case is Sell In May & Go Away.
While anything is possible, it seems that looking for a melt-up on the heels of a 90% advance in 13 months is looking a gift horse in the mouth.
