“He hears the ticking of the clocks
And walks along with a parrot that talks.”
Simple Twist Of Fate, Bob Dylan

Yesterday Fed Chair Powell was asked whether “a soft landing was still possible.”

His response was, “That’s not our base case.”

In other words, the door is wide open to a hard landing if that’s what it takes to get the Inflation Genie back in the bottle.

Today is day 55 from the July 27th SPX high.

It is the heart of the Gann Panic Window.

Allow me to explain.

W.D. Gann wrote that 7 is the number of panic.

He also believed that time and price ‘squared-out” creating a vibration.
After all what is a vibration but two things multiplied together or squared.

In keeping with his market theory called LOV or Law Of Vibration,

PRICE squares are important as are TIME squares.

There are many ways in which a price or time square can be perfected.

For the purposes of this 55 day Panic Window suffice to say that Gann stated that since 7 is the number of panic 7 X 7  can lead to a crescendo, ie 49 days or from the 7th week into the 8th week from a turning point.

From the September 3rd high in 1929 the market crashed on October 29th, Black Tuesday, the 55th day from high.

There was a precursor. The market crashed on Black Thursday, October 24, 1929.

From the August 25th high in 1987 the market crashed on October 19th, Black Monday, the 55th day from high.

The market is not a Rolex but this is a compelling setup—not just because of the 55 day count but

For a number of factors such as the structure of the market, major cycles and time/price synchronicities highlighted in reports over the last month.

Our “Chaos” report recently for example is just the tip of the iceberg.

We’ve been waiting.

Wednesday looks like a precursor to the wheels coming off.

The SPX gapped open and was up 19 points in the opening salvo and flat-lined until a Jump the Creek sell was triggered after the Fed.

A Jump the Creek is a move that offsets an open gap.

A 10 min SPX  shows that in keeping with my FOMC Cha Cha pattern after the first stab down the market retraced only to Jackknife lower carving out a waterfall decline in the last hour.

Going into the bell, bulls did a Costanza as bears clawed at stocks with impunity.

In the process, the SPX closed below an important trend line connecting the March/August lows.

Just below is a Neck Line at 4377-80.

Breakage below this Neckline projects to 4147.

Breaking the March/August trend line opens the door to the October/March trend line at the 4225 region. However, before that there is small support at 4300.

In sum, downside follow-through targets 4300 and if that is violated a further plumb-line drop could play out to 4225 to as low as the aforesaid Head and Shoulders projection to 4147.

Wednesday’s failure below what we’ve been calling the Maginot Line at 4430 is doubly important inasmuch as it is 360 degrees down from the July 4607 high.

Another 90 degree decrement down is 4273.

A full 540 degree decline equals 4208.

4208 is The Big Kahuna.

These are the geometric projections according to the Principle of Squares and my Square of 9 Wheel.

Notice how 540 degrees down ties to the October/March trendline at 4225.

If Mr. Market’s agenda is to crash, the 4225 to as low as 4147 region is the target.

Interestingly the 200 day moving average currently resides at 4188 which ties to a 540 degree decline and the Head and Shoulders projection.

Is it possible the market can be quickly magnetized to 4200?

The question isn’t whether it’s possible. Anything is possible in the market.

The question is whether it is probable.

Crashes are rare birds, but the setup is there.

Gann Day, September 22, is square 431 or 4310.

In other words we have a possible square-out at 4310 over coming days that could exert its downside influence.

Below 431, we see that 411 (4110) is 180 degrees straight across and opposite Septembe 21/ 22

Now that’s a Knife. However, checking a monthly SPX shows that 4110 is the high of the March 2023 bar. In other words the high of the low bar month where the 2023 rally started is 4110.

A weekly SPX shows the index is testing its rising 20 week moving average. The last time the SPX was at its 20 week moving average was MARCH.

Breakage below the 20 week ma is another Sign Of the Bear. SOB.

On Sept 6 Hit and Run included the following IWM chart and tweeted it.

It broke down yesterday from its Head and Shoulders.

Below the flat-line shown on the weeklies opens the doors of hell.

“He felt the heat of the night
Hit him like a freight train
Moving with a simple twist of fate.”