“We skipped the light fandango
Turned cartwheels across the floor” A Whiter Shade of Pale, Procol Harum
In Monday’s report we noted that this week should find a high, with the key days being Monday or Friday to look for that high.
This analysis is based on a big picture view of Mr. Roadmap.
Shall we call him RM Mac Daddy?
On Monday the SPX went into the Minus One/Plus Two sell position.
The index shrugged it off pushing higher Tuesday leaving an outside up day.
We continued higher on Wednesday scoring an new record high.
The market capitalized on Thursday’s record briefly: it gapped up to an all-time high but reversed sharply closing in the middle of the range, but at a record closing high.
The point is that Thursday’s opening high is an important level on the Wheel.
Recently we flagged that 675 (6750) is 2 cycles of 360 degrees up from 483 (4835) the April 7, 2025 low.
Doing the math on my calculator I get the following:
1 cube up from 4835 is 5260.
How do I get this number?
I take the square root of the low, 4835 which is 69.53.
Adding 1 to get 70.53 and re-squaring gives 180 degrees up.
Adding 2 to get 71.53 and re-squaring gives 360 degrees up.
Adding 3 to get 72.53 and re-squaring gives 540 degrees up.
2 cubes up is 5700
3 cubes up from low is 6167. Notice that this ties to the February 2025 pre-crash high.
4 cubes up or 2160 degrees is 6649.
These levels will be important going forward on any downturn.
Breakage of one level opens the door to the next cube below.
Often times markets Overthrow a pivotal level by 90 degrees pulling both bulls and bears alike off-base.
A 90 degree Overthrow of 6649 is 6729 ish.
Thursday’s SPX open/high was 6731.
The SPX reversed with authority but once again hyperventilating Buy The Dip stepped in to save the day.
But what we want to do here is pullback the lens to look at the Big Picture as seen thru the lens of 2025.
First I connected the February 2025 high to the last swing high in September (purple).
I paralleled a line off that Tops Line from the important May 2025 low.
Why is that important? It’s the last time the SPX tested its 200 DMA.
The successful test perpetuated a powerful rally…from that May 23 low.
November 23 is 180 days/degrees out.
We have been talking a lot about the significance of November. I don’t know if it’s a high or a low—yet.
If it’s a high, it doesn’t mean we take the direct route. We could easily see a downdraft first. Easily.
Such a downdraft could target the bottom rail of the magenta channel.
This channel was produced by connecting the highs from late July and paralleling a line off the May 23 low.
I then connected the important December 6, 2024 high with the September 22 high (red)
The September 2025 high is important because it is the Autumnal Equinox, a Solar Eclipse, and it squares 96 (96 years from the 1929 Super Cycle Top).
I paralleled the red Tops Line off the April low. It comes in at around 5250 currently, rising slightly throughout the balance of the year.
The important takeaway is that breakage below the bottom of the purple channel in tandem with the 200 DMA opens the door to acceleration to the bottom red channel.
Due to the convergence of the highs of the red, purple and magenta tops lines in this 6700 region
The dominoes below become important to have on your radar.
Not shown is an obvious rising trend line from August that ties to around 6550 just below last weeks low.
Bottom line, breakage below last weeks low kicks out the jams.
Why raise the caution flag? Why not another melt-up?
Of course at the end of a melt-up the crowd is always calling out for more.
But the Dow Theory has stood the Test of Time.
The Dow Theory Crash Indicator shows in 2000 the DJIA hit a new high and the Transports didn’t confirm.
The Dot-Com Bust followed.
In 2008 the DJIA high a new and the Transports didn’t confirm. It was a ‘stealth’/ quiet signal but proved to be a blaring alarm.
The Great Financial Crisis followed.
In 2020 the DJIA high a new high but the Transports didn’t confirm.
The market crashed.
The DJIA is hitting new highs currently.
The Transports are not confirming.
“She said, ‘There is no reason and the truth is plain to see’
That I wandered through my playing cards.” Whiter Shade of Pale
The Roadmap for Friday
Mr. RM indicates another trend day to the topside.
- A pullback from the open into 10:00
- A rally into 10:45
- A little pullback into 11:15
- A rally into 11:45
- Another little pullback int0 12:15.
- A rally into 12:30 with a flat line into 1:15
- A rollover into 1:15 followed by
- A strong rally into the close
HOWEVER the trend day up and rally into the close is predicated upon a possible Inversion Pivot at 12:15 which if it exerts its influence suggests a turn down into the bell potentially…depending upon what plays out from the 1:15 pivot.