“Fools rush in
Where angels fear to tread.” Fools Rush In, Elvis Presley
“The human animal never behaves as wisely as he means to, particularly when his counselor is Hope or Fear.” Edwin Lefevre
With MSFT and META blasting higher the SPX spiked open to a new record high of 6427.
A turn down of the 3 Day Chart looked like a Bear dreaming of salmon going against the steam.
Yet as “fools rushed in”, the index opened on its high up 64 points and reversed to turn its 3 Day Chart down in a stunning 99 point drop from high to low.
Each time the SPX turned its 3 Day Chart down since the April low has defined an immediate low:
May 7
May 23
June 23
If the index does not find a low today/Monday and follows thru to the downside with authority, it will be a change in character worth paying attention to.
That in part is because the SPX satisfied a Time/Price square-out resonating off the 666 March 2009 bear market bottom.
Whether this weeks multiple reversals from the 641 square-out (6410) prove to be a major top, there is already something historic about yesterday, as tweeted on the private feed:
The lowest McClellan Oscillator reading on a day the SPX hit a new record high was -20.28 on December 13, 1961.
Yesterday mid-day the McClellan was -57 as the SPX struck a record high.
The most negative reading in history at a record high.
And, on a day when MSFT spiked open 42 points and META spiked up 80 points.
MSFT opened on its high and closed on its low on massive volume.
META left a Spinning Top on massive volume—opening and closing at the same level after running up.
Several momentum leaders left big signal bar reversals.
They include:
CRDO
RBLX
CDNS
ORCL
To mention a few.
On Thursday the SPX just missed leaving a massive Key Reversal Day by a fraction.
Be that as it may it registered an LROD—a Large Range Outside Down Day—A Lightning Rod—from a record high.
In so doing the index snapped a 3 point trend line from the June 23rd outside up day that produced the momentum run to this weeks high.
So it looks like the back of the momentum run has climaxed…it’s too early just yet to say whether its back has been broken.
But a Charlie’s Angels pattern (3 ‘Tails’ in close proximity) may be telegraphing a more important high than the vast majority are considering.
My gut is a drop to the February top plays out quickly shocking the Buy The Dip Bros.
The decline from the February 2025 top at 6147 saw a decline to the January 2022 top.
It played out over 9 months.
Prior resistance became new support.
In keeping with the Principle of Alternation, a drop to the prior resistance—the January 2025 top at the 6140 region should play out quickly.
As well, while the Feb 2025 to March 2025 drop perfected a test of the January 2022 highs at 4818 almost precisely, I suspect we could undercut the prior 6147 high.
A 360 degree decline from yesterday’s high projects to 6108. Perfect.
A 540 degree decline projects to 5953.
Virtually a direct hit with where the 200 day moving average resides.
It hasn’t been tested since May 23.
That successful test perpetuated the Climax Run to this week.
Should the 200 dma fail to act as support if we get a 540 degree cube-out drop, breakage below the 200 day opens the door to a full fledged crash.
In sum markets closed sharply lower on Thursday, capping off a pivotal session marked by extreme internal deterioration and historic divergences. A condition we’ve been flagging for weeks that the market shrugged off.
Until it doesn’t.
Let me repeat, in one of the most statistically rare events in modern market history, the SPX managed to record an all-time high while the McClellan Oscillator closed at -49, the most deeply negative reading ever recorded on a day when the SPX reached a record high.
This unprecedented divergence underscores the internal weakness beneath the surface of headline indices and reflects conditions not seen in over a century of trading.
To recap, the DJIA blow off in 1929 was around 97 calendar days (from the May low).
It was 33%
The current blowoff starting from the April 7th low has been 115 days.
It has been 33%.
And…33% to a Time/Price square-out of the bear market low in March 2009.
Caution is warranted.
For the last year I have pointed out the parallels to 1929.
There has been a lot of applause and stomping during this encore rally following the cliff dive into April 7, 2025.
We got Encore.
Fools rushed in.
They remained clapping and stomping throughout the signs that the
King had left the building.