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Make the Market Great Again


“We all have one foot in a fairy tale and the other in an abyss.”
-Paulo Coehlo

Since the October 11 break of the Rising Wedge in the SPX, the Daily Swing Chart has turned up twice — once on a gap up and strong rally  on Friday that wilted giving up all session gains, and then another similar gap up yesterday which saw the index tail off again.

All this action is taking place below the declining 50 and 20 day lines.

We haven't even mentioned the continued deteriorating internals which are shouting for the potential of violent capitulation.

We haven't mentioned cycles. We're just talking price action and pattern, which shows the SPX is in a weak position.

Yesterday we reckoned resistance on the SPX to be at 2140 (214 SPY) and despite a brief push above that level on Tuesday, the index closed just below 2140.

In so doing, the SPY may have traced out a continuation Head & Shoulders pattern on the hourlies.

Additionally, note how, conspicuously bearishly,  this formation is since it is being  carved out below a broken trendline.

The bottom line is, the market is not seeing traction from these up gaps. Instead of Gap & Go's, we're seeing the market tail off with closes below the open.

In fact, all the gains in the DJIA yesterday were due to GS and UNH.

On Tuesday, the NAZ gapped up above its 50 day m.a. but closed below the 50.

While the NAZ set a high on September 22, the SPX and DJIA haven't registered new highs since August 15 for a possible classic negative divergence.

Today is the 29th anniversary of the 1987 crash, and interestingly, there are sparks flying with Iran just as there were on Black Monday in 1987.

A gap down open on October 19 in '87 turned into the abyss as news that the US bombed Iranian oil platforms hit. But most of those trading at the time don't even know that was a factor.

In the last few days, rebels in Yemen backed by Iran have been firing missiles at US ships.

My gnome tells me that over the next week, Mars the planet of war, is square the birth of the NYSE (May 17, 1792).

That was 224 years ago and interestingly 224 points to/aligns with the week of the election!

Is it possible the Hounds of Hell trade I mentioned months ago is on the table as unfriendly powers test President  Obama?

The bottom line is that it may get very rocky: IF stocks turn down they could do so with authority.

As you know, 360 degrees down from the all-time SPX high ties to 2010.

What is interesting about 2010 is that it aligns with December 7 on the Square of 9 Wheel.

December 7 of course is the day of the attack on Pearl Harbor.

This is what is called a Master Square vibration in time for the US. It is engraved in DNA of the US as Day Of Infamy.

Let's take a look.

December 7 is 90 degrees square the first week of September.

This was the start of WW2.

It was also the high in 1929 of course. Major events in the history of the U.S.

Straight across and opposite December 7 is June 6th which was D Day.

90 degrees square December 7th is March 6 which was the low in 2009 after the greatest debacle in 80 years.

W. D. Gann didn't think these were random events within a tunnel of time.

I don't either.

At the same time, the all-time SPX 2193 high is 180 degrees straight across and opposite 666.

Both numbers vector the dates of June 6 and December 7.

The 2193 August high has been installed for 2 months now. There is a chance that was an historic high.

December 7 is 90 degrees/days from the September 9 market break and 180 degrees/days from the June 8 pre-Brexit crash high.

Will the stock market hit an air pocket prior to the election or will  we see a Spike Up & Reversal pattern into the election?

Either way, the first week of December looks pivotal.

Remember that the January Indicator, the January Barometer and my December Low Indicator all forecast a tough year for the market.

Perhaps, Mr. Market is set to play downside Ketchup.

After Brexit, it looked like a genuine downturn was on the table with the bearish resolution promised by the above trio of indicators.

The vast majority of smart players who lightened up and played defense in front of Brexit looked smart — for 48 hours.

It is clear that Central Bankers circled the wagon to ‘make the markets great again.'

The reversal on the heels of Brexit caught markets by surprise as shorts scrambled as the SPX broke out above the pre-Brexit pivot high of 2120.

The rally carried to a new high into July 20 and subsequently has traced out one of the longest sideways stints I can remember.

Momentum just died in its tracks after shorts covered. Players didn't know what to think.

Then came the fall and the weirdest election ever. Players don't know what to think.

It may get very wild soon.