Pay Me Now Or Pay Me Later

“Some days are diamonds
Some days are rocks
Some doors are open
Some roads are blocked” Walls, Tom Petty

“Good investing requires a weird combination of patience and aggression. And not many people have it.”
Charlie Munger

“March 13 was a low because it was a Time/Price square-out.
This is because the high price 6147 (614/615) squares March 13 on the Square of 9 Wheel.
It will be important to see if we get a successful test followed by a rally to put a “hook” in.”

The above is from Monday morning’s report, Parallel Universe.

As offered on the Hit and Run Private Twitter/X Feed, we were looking for a Turnaround Monday.

The SPX gapped down over 50 points on Monday testing the March 13 low and the door was opened lower, but it closed in the face of those who shorted into the hole.

We went on to say we couldn’t remember seeing a Black Friday/Monday play out since 1987…except for August 2/5, 2024 which was presumably due to the Yen Carry Trade unwind.
Was that a dress rehearsal?
Was it a short over the bow of the USS Bull?
Was it a one-off or a crash which saw a 5 month rebound…
Like the 5 month rebound from the November 1929 low to the April 1930 peak.
It was the phony Return To Normal Rally.

Is that what we got with the 5 month rebound following the Yen Carry Crash?

Today is April 1st.

If a mirror image foldback with 1929 is playing out, then April should be a doozy.

The difference between Monday August 4, 2024 and Monday October 19, 1987 is that the open on 8/5/2024 was the open and we rallied 130 SPX points off that opening low…albeit we settled in the middle of the day’s range.

There is another reason why an Undercut of Monday, a Trap Door, was likely.
2 cycles of 360 degrees down from the SPX all time high is 5535.
While the gap below that level opened the door lower producing breakage below the March 13 low, a funny thing happened on the way to an abyss.
The SPX Jackknifed back up through the 5505 March 13 low and the key 5535 “square-out”.

So essentially we have two tests of this 720 degrees region down from the all-time high.

hourly March SPX

March has been historic in this century.
March 2000 bull top.
March 2002 bear low.
March 2009 bear low.
March 2020 Covid Crash low

This March didn’t disappoint for being historic.
It produced a Key Reversal Quarter in the lead index, the QQQ’s

quarterly QQQ

You won’t find another quarterly bar like this in the Q’s

Hit and Run went on offense, starting with TSLA and buying the 553 SPY calls expiring Tuesday when the SPY was trading at 550.
We took SPXL long at 133.35.
We locked in gains on all of the above before the bell: Hit and Run baby.

The market’s job #1 is to deceive.
Will the SPX rally high enough to produce a “double bottom mantra”?

180 degrees up off Monday’s low will be initial resistance. That’s 5637.
Above that opens the door to a full 360 retrace.

In sum, the SPX turned its 3 Week Chart down right off its all-time high. The 3 Week Chart turned down.
Last week the SPX carved out a Minus One/Plus Two sell setup.
This is because the 3 Week Chart was pointing down and we got 2 consecutive higher weekly lows.
This is the heart and soul of my Swing Method that does a good job of determining the trend.

The SPX dailies triggered a Soup Nazi buy signal on Monday when it reversed up through the March 13.
It’s not going anywhere unless it recaptures its 200 day moving average.
And even if it Pinocchio’s its 200 day moving average it may be another lie…an A B C countertrend rally…just enough to make the Street believe it’s a return to normal.

For the bears, it’s “pay me now or pay me later”.
The likelihood is the August 2024 low is the bull case if The Cycle continues to exert its influence.

Some of the spokes in the Wheel of The Cycle warrant caution.

1) “1929” the year, squares out with the all-time high prior to this years waterfall

2) “2025” the year, squares out with 381, the DJIA closing high in 1929.

Breakage back below SPX 500 will see accelerated momentum.

Remember that the vast majority of traders have to be wrong at major turns.
Including the analysts and “experts”.
Think about what that means for how you seek market insight and who to follow.