“My expectation is that we get a Selling Climax into late September/early October based on cycles that have exerted their influence in 2022.
In a tape that is already wicked, the potential for whiplash is present today in what is bound to be a doozy of an FOMC Cha Cha Cha.
This is where you get THREE moves in opposite directions post-Fed.
We have a pretty good idea that the Fed statement will be uber-bearish because it is their credibility that is most important to them now after Mr. Bubble dropped the ball….traders may sell hard on Wednesday if the hoped for ‘baked into the cake squeeze higher’ doesn’t materialize.”
We wrote the above in Wednesday morning’s Hit and Run Report.
In sum, the hoped for ‘face ripper rally’ on a buy on the bad news that some pundits were looking for tried to lure lambs in the early going, but, once Powell spoke, the lambs were led to slaughter.
As a 10 min SPX showed the lamb-bulls would not be easily disabused: after the initial reversal they came back for more.
Following the initial swoon, the die-hard bad news bulls dove in feet first perpetuating a spike to new highs on the session.
But look where it failed: on a Pinocchio of the 3900 level of lore we’ve been saying all week that pressure remains down as long as below that region.
The downdraft after the Fed rate hike was Cha 1.
The spike to 3900 was Cha 2.
The plum-line drop from the 3900 region to 3790 was a stunning 110 point slide in 1 hour.
Now THAT’s entertainment…if you’re positioned properly.
Hit and Run members were hitting and running throughout with SQQQ, TZA and SOXS.
We’ve been writing about the September 21/22 Gann Day Fall Equinox as a mega-pivot historically.
Wednesday was one remarkable reversal…a few of them actually in keeping with FOMC CHA CHA Day’s.
Today/Friday aligns with 371 (for 3710 cash) on my Square of 9 Wheel.
That’s another 90 points down and futes are under pressure overnight as I wrote.
Breakage with authority below 371 opens the door to 352 (for 3520).
Why? 352 is square September 22/23.
As W D Gann wrote, “When Time & Price square-out expect a change in trend.”
That’s an interesting square-out with the market in free-fall because 3500 ties to a 50% retrace of the Covid low in March 2020 to the January 4th 2022 all-time SPX high.
Is it possible 3520 is struck over coming hours/days.
I know it’s hard to believe. But then our call on March 23, 2020 that the SPX would hit 4000 within a year was ridiculed too.
With the mega-big caps like MSFT, AMZN, META, and GOOF going from a place to hide to a source of funds, the SPX could unravel in a Ketcup Play as to the former NAZ high-fliers.
Watch AAPL here as it left a 1 2 3 Snapback/Holy Grail sell setup at Wednesday’s high.
We may be on the precipice of capitulation.
Watch UVXY which is on the verge of breaking out and if the wheels come off with a continued waterfall, UVXY could spike to who knows where.