The SPX Is in the Wheelhouse
The SPX is in the wheelhouse of major time and price projections that should produce a significant turning point.
Whether it's a 7 week reaction like the one that started at this point in 1928 with a parabolic leg to follow or whether it's a more important peak remains to be seen.
The SPX popped through the 2720-2738 window yesterday on an opening spike and flat-lined the balance of the session.
This morning it looks like it is going to try for 2738.
So a slew of time/price harmonics are being satisfied in league with the 3 Day Rule.
Typically this plays out with 3 to 4 strong days with a reversal or day 4.
That said Friday's in bull markets at record highs usually (not always) close at record highs.
If a reversal is going to play out perhaps it waits for next week's anniversary of the 1973 top.
Maybe something, maybe nothing but the 2007 top was 34 Fibonacci years from the 1973 top.
2018 is 89 Fibonacci years from the 1929 top.
Something I hadn't noticed is that January 1973 top is 90 degrees square October 10-11, the date of the 2007 top.
Put another way, next week squares the time of the 2007 top.
Of course, that was another false breakout over the primary July high that year and we are straight across and opposite July on the calendar.
Something I may not have mentioned previously is that the 2007 high of 1576 is straight across and opposite next week. This means that the price of the 2007 top was across from the time of the 1973 top.
These are additional ‘gear's in the Wheelhouse.
This looks ‘big league'.
Remember, Gann said all major highs and lows are related to each other.
When you get a cluster of such relationships it is worth paying attention.
I am often asked why I make these time and price levels.
These are not forecasts, they are not ‘calls', they are ‘anticipations'.
They serve a very useful purpose. When the market doesn't do what is expected it is talking.
The purpose of setting up creating these time/price expectations is so that the market's action doesn't just roll off us like water off a duck's back.
Not all square-outs are tops or bottoms but ALL TOPS AND BOTTOMS ARE SQUARE OUTS.
In the same way, not all trendline breaks perpetuate a new leg up or down: it is always the subsequent behavior that counts.
Follow through is key.
This is true for traditional technical analysis and setups as it is for Gann Methodology.
So the purpose of looking for these time/price relationships and creating these expectations is not to lock oneself into a forecast.
Rather, they offer a way to measure the market.
If you don't have a way to measure risk, you cannot manage risk.
The Square of 9 Wheel is the most powerful tool on the planet for measuring risk.
It is worth stating that W.D. Gann's original outlook for 1929 was for a top on August 6 and panicky selling in the fall.
Of course, the market topped on September 3 that year.
I have gone back and looked at the natural cycles occurring on the week of August 6.
They are present here in January.
At the same time the SPX is kissing a potential target, the DJIA is as well.
The DJIA is flirting with 25,100.
Reducing this number to 251 to work with the Square of 9 shows that 251 is square 2738, the SPX projection.
251 is square March 6 (the low from 2008) just as 2738 aligns with March 6.
The hits just keep on comin' for the market that everyone hated, that everyone now loves with Wall Street strategists tripping over each other with higher projections for a price target in 2018…regardless of the longest run ever and one of the highest valuations ever.
Yes, I know low interest rates are these players get out of jail free card.
It will be interesting to see what happens if the perception and or reality of inflation raises its pointy head and the new Fed Chairs response this year.
Clearly, the commodity complex marked by recent rocketing moves in copper and gold are on the Fed's radar.
If this isn't the opposite corner of the wheelhouse from March 2009, I don't know what is.
Long time readers will recall that there was a square-out In March 2009—-March 6 is 90 degrees square 666-667.