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A Bullish Setup


The stock market is not the economy…although the funnymentalists will tell you so.

What is Goldman supposed to tell their muppets? “Cycles suggest….”

Indeed the question as to whether the 1929 Crash caused the Great Depression or whether the Crash was discounting it and it was on deck anyway has been debated for decades.

This question underpins the nature of what truly drives markets.

I’m not an economist. I can’t tell you the ‘reasons’ for market bubbles and crashes.

But I know math. I know how to connect the dots.

Having been at this game since the early 1980’s, after years of study, I have proven to my complete satisfaction that VIBRATION explains every possible phase of the market.

Allow me to explain. By vibration I mean that nature, whether it is the stock market or some other phenomena, is subject to the universal laws of ebb and flow created by gravity and the moon.

This ebb and flow is the emotion behind the moon, the psychology behind markets.

By vibration, I also mean the number vibration, be it price resonating off a prior price or time resonating off a prior time or time period.

More importantly, as legendary trader WD Gann, wrote, “When Time and Price square-out, expect a change in trend.” This can be on whatever time frame you are measuring.

Specifically, integrating Time and Price, is the most powerful indication of a change in trend.

This means when Time and Price balance our or square-out, expect a change in trend.

Let’s take a look at a couple of examples pertinent to two historic melt-ups that were followed by crashes, 1929 and 1987.

The last ditch run for the roses in 1929 that capped off an 8 year bull campaign started in late May and ended on September 3, 1929.

The Square of 9 Calculator shows that late May squares September 3.

As well, the 386 DJIA high in 1929 squares October 24th, the date of the first crash that fateful October.

On August 25, 1987 the SPX struck a high of 338,

338 is 180 degrees straight across and opposite August 25th.

The market crashed on Black Monday October 19th, 1987, the low of the crash was 216 SPX.

What would you think if I told you there was a geometric relationship between 216 and October 19.

Take a close look at the Sq of 9 image below that shows 216 squares-out with October 19th.

The interim low following the crash of ’29 was at 195 DJIA on November 13th.

What would you say if I showed you that 195 squares out with Nov 13.

195 is 180 degrees straight across and opposite Nov 13

You can’t make this stuff up.

The harmonics between Time and Price even in the midst of waterfall declines that stop on a geometric dime is undeniable.

a basketball on a blue background

What about the current rally?

The SPY bottomed at 409 in late October 2023.

409 points to April 2. The week of a powerful solar eclipse, The 2nd Great American Eclipse on April 8.

Interestingly the 1st Great American Eclipse occurred on August 21st, 2017.

It was a low that perpetuated an uninterrupted 5 month advance into the end of January 2018.

Is it possible a mirror image foldback is playing out with the SPX making a HIGH on/near this April 8, 2024 eclipse versus a low on the August 2017 eclipse?

Checking the SPX dailies we see a trend channel with the Tops Line starting from the first interim high of the rally in December.

Notice that the SPX broke out of a consolidation last Wednesday followed by a kiss of the top rail of the channel on Thursday.

Subsequently the index has traced out two consecutive lower daily lows on Friday and Monday.

Both sessions were N R 7 Days…the narrowest range in 7 days.

These contractions typically see expansions in volatility within a day or two.

So we have a double volatility setup.

Another lower intraday low today will see the SPX turn its 3 Day Chart down for only the second time since the advance started.

That’s a phenomena.

The first turndown of the 3 Day Chart was on January 3rd.

The market went a tad lower and then exploded to the topside.

The parameters are clear. The bottom rail of the trend channel ties to the 20 day moving average at the 5150 region.

A parallel Bottoms Line from the late October low ties to 4975.

The leading QQQ  also shows 2 lower daily lows.

The Q’s have only turned their 3 Day Chart down twice since the late October low.

Trade today below Monday’s low will see the 3 Day Chart turndown in the region of a trendline that has defined support since early January.

A parallel trendline from the October low ties to 422.50.

Drilling down shows that on Thursday QQQ tested the Key Reversal Day from March 8th leaving a signal reversal bar of its own—a Gilligan sell signal, a gap up to a new 60 day high with a close at/near session lows.

As well knifing below the March 8 high triggered a Soup Nazi sell signal.

Trade below yesterday’s lows will turn the QQQ 3 Day Chart down.

The all-time high on the Q’s is 449 last Thursday.

449 is 180 degrees straight across and opposite April 8th, the eclipse.

That said, if momentum shows up and the Q’s eclipse 449, the projection is to 470 which squares-out around April 8th.

If the market is going to pop its cork, with a cherry on top of this runaway advance, this shortened week is do or die.

In sum, this is not a monolithic meltup, it’s stock specific.

Chips rip with NVDA, MU and SMCI pressing higher on Monday while AMD whiplashes players in a trading range.

IPO’s are the heart and soul of speculation and ALAB and RDDT exploded on Monday.

Energy is on fire with VLO, MPC, WFRD and CEG parabolic.

Hit and Run was triggered long in CEG on Monday on an up ORB (a breakout over the 1st half hour range) at 182.60.

The ORB did a good job of telegraphing a trend day.

Retail is a mixed bag. TGT was a disaster for 2 years into October ’23 when it bottomed at 103. It struck 170 in early March when it began to consolidate.

Hit and Run took TGT long on a swing at 167.88 as it came out leaving a V-Thrust buy signal on March 18th.

On Monday it left a continuation buy signal, a “180”

One of the biggest winners of the last year has been ANF, but it got taken to the woodshed on Monday.

Let’s take a look.

It ran up from a low of 22 in May 2023 to 140 on March 5th.

It’s easy to get into a stock with momentum. The trick of the trade is to know when to get out.

This is where the Square of 9 Wheel has proven invaluable.

Specifically, March 5th squares out with 140.

After testing its  high, ANF crashed through its 20 day moving average on Monday.

This is the 2nd drop below the 20 dma.

The second mouse below the 20 dma looks like it will get the bear cheese.

Putting the pieces together, the test failjure of the highs produced a waterfall decline because

Pulling back the lens to the next larger wheel of time, the weeklies, shows that ANF left a Key Reversal Week 3 weeks ago.

180 degrees down from 140 is 117 which was tested 4 days after the high.

Breakage below 117 opens the door to 107.

Conclusion. SPX and QQQ may not turn their respective 3 Day Charts down on Tuesday.

They show two lower lows while the 3 Day Chart is pointing up which produces a Plus One/Minus Two buy setup.

This in and of itself is a strong buy setup coming as it has on the heels of last weeks upthrust to new all time highs.

The late sell-off into the runoff on Monday may have pulled the rubber band back and hunted stops.

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