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What Is the Sign of the Bear?


“trouble on my left, trouble on my right”
-Cage The Elephant, Trouble

“When everybody is running around saying how great a stock is, everybody who can buy probably already has, and the only direction for the stock to go at that point is down. When it’s obvious and exciting to everyone, it’s too late!”
-William O’Neil

The SPX struck an all-time high of 5264 on March 28th. It tailed off to close at 5254 that day followed by the largest pullback in the Runaway Move since last October.

The drop into April 19th overbalance in Time and Price any decline on the advance since October 2023.

chart, line chart

Breakage below 5100 and 5050 open the door to the downside and the 4950 April low—particularly if it occurs in a 5 wave impulsive drop.

Breakage below the April 19th low of 4950 is trouble.

Because 495 (4950) squares out/points to March 28th, the high day.

a basketball on a blue background

In other words the day of the high, March 28th, squared out with the price of the low, 49i50 for a time/price square-out.

This is why the market has rebounded so sharply—the aforesaid square-out presented key support.
The T Rex in the bull ointment is that a break of 4950 going forward smashes this time/price square-out support.

In addition, trade below the April 4953 low will pierce the 3 Day Chart circled low (4953.56O).

There is nothing but air below.

Yesterday, the SPX hit a high of 5250, a fraction from the all-time high.

Is the SPX in a new leg up or is it making a double top?

The Square of 9 Time and Price Calculator shows a square-out for today May 15th at 526 (5260).

In other words, we have a Time/Price square-out, opposite of what we had at the April 19th low.

As W.D. Gann stated, when time and price square-out expect a change in trend.

While the SPX hit this region in March, time was not up.

Now that price has caught up with time we must be mindful of a change in trend.

As Gann wrote, “Time turns trend.”

Checking a weekly SPX shows that the index turned its 3 Week Chart down on the week of 4/15 and extended to kiss its 20 week moving average before rallying back to the prior highs.

Yesterday the 3 Week Chart turned back up.

If indeed we are at a double top, this turn back up of the 3 Week Chart should define a high soon in terms of time and price.

It would not be surprising to see a WEEKLY Soup Nazi sell signal occur before the weekend.

This occurs when an item makes a new 20 period high and reverses quickly back below the prior high within the 20 period lookback, but with at least 4 bars of separation from the prior high.

Since this is a weekly pattern we’re looking at here it means to perfect a weekly Soup Nazi sell we would need to print a new high above the March high and jackknife back below the high of the week of March 25th.

Current prices show at least a 4 week interval from the March high and we are within the 20 week lookback, the criteria for a weekly Soup Nazi sell is present.

A Spike and Reversal today that produces a red close on the day and especially a red close on the week is a strong indication that a top is in.

Consequently, a spike up today on the CPI that reverses, sounds a sell siren.

Why a siren? Because in addition to the cluster of cycles and time/price harmonics/square-outs showing up this week, a double top warrants caution as the structure of the waves indicate we may be culminating the advance from 2009 or longer, as shown in recent reports.

Trouble on the left, trouble on the right.

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