“Check it and see, one more time for me” Mr. Postman, The Beatles
“The trading favorites of 1928 were high-priced, untried, and unseasoned stocks that made one wonder whether the public did not think that the higher the price the better the stock.” Edwin Lefevre
Today let’s walk through how I create my short term charts in sync with the Square of 9 Wheel.
Square of 9 Wheel
Purchase your own Square of 9 Wheel. Shipping to US only. Contact Jeff for shipping outside the US.
A free ebook is available on the Sq of 9 on the site (cooperhitandruntrading.com)
Below is a 10 min SPX chart for the last 3 days. I use 10 min, 1 hour, daily, weekly and monthly charts typically.
The first thing gto notice is that despite Mondays large gap down the SPX struck a low in the opening half hour of the session.
1) An up ORB (a breakout above the first 30 min range) saw a little checkback and then an extension of the rally.
Textbook Trend Day action.
2) The first little consolidation perpetuated a push into Phil D Gap from the morning. Offsetting the gap triggered a Jump the Creek continuation buy signal.
3) As soon as we got the Opening Range Breakout we can grab the Wheel to measure possible upside
90 degrees up from Monday’s low is 5562. Clearing that opened the door to the next 90 degree decrement higher which is 5636.
So there was an unfulfilled agenda to 5636.
Like clockwork a pullback stopped almost exactly 90 degrees up from Monday’s low for the move.
Tuesday’s pullback stopped at 5558. The 90 degree square up…5562.
You can’t make this stuff up.
4) The rally off the “square” was struck mid-day Tuesday satisfied and exceeded 5636. However it didn’t last long. The 180 degree square-out rejected the rally after two tests of the top of a micro channel
We don’t really know that’s a little trend channel until we get the THIRD point…Tuesday’s high.
However, the 3 tests of this upper channel elicit a drop to the bottom of what we can now construct as a channel before the fact, before it highs it late Tuesday and bounces off it.
How can we create the channel? We have 3 points defining the upper rail of the channel. As soon as we have that we parallel a Bottoms Line off Monday’s low.
And, lo and behold the late pullback on Tuesday drops right to the bottom of the channel.
Amazing.
Happenstance? Not likely.
5) Having cleared the 180 degree square up theoretically opens the door to 270 degrees up…especially if 5636 is cleared again. Doing so opens the door to 5712 which is the 270 degree square up from low.
You are asking yourself where is a full 360 degree advance, That number is 5788. Sound familiar?
It should it is the March 25 high, Monday a week ago. (5777 to be precise).
Said another way. The drop from 5777 waterfalled exactly 30 degrees in THREE days and 1 hour.
Markets play out in THREE’s.
Let’s look at a example of how to integrate pattern with the Wheel with CRWV.
The lack-luster IPO shined on Tuesday.
A 10 min CRWV shows it traced out a Cup and a High Handle.
In sum animal spirits woke up on Monday.
Is NMAX an April fool’s joke?
The deal is when animal spirits stir in the context of a bear market, they can wake up a gorilla.
A gorilla with a penchant for ringing the doorbell just when the party gets in full swing.
The bulls answered the doorbell once it was rung after the 7 day rally into March 24th/March 25th. It was a Trading Places moment.
If they answer the doorbell again to the chimes of FOMO, they may be staring a Wave 3 in the face.
You know what they say… don’t feed the gorilla.
Trade above Tuesday’s high today puts the SPX in the Minus One/Plus Two sell position.
The same position it was in on March 25th.
If the index trades above yesterday’s highs and extends, the presumption is it is in a C Wave corrective rally:
A up into March 25.
B down into March 13.
And C up into?