This could be the last really big week of the stock market year. On Tuesday we have the inflation number and on Wednesday, that’s a special day as the Fed returns to rear its head on our economy. What’s its all about? They’ll likely go 50 basis points but the key point for this week is the retracement and nullification of the Powell rally from a week ago where the market shot straight up based on news they’d slow down the size of interest rate increases. What took roughly 2-180 bars has now been sliced and diced in roughly 26-180 bars. It lifted but now right back in the soup.
Its also important to note the beginning of this rally in October is on a monthly golden spiral (163 months from 09 bottom) relationship and if that does not hold, it could fall a very long way if it gets to that. But right now we are concerned about the near term action, not what happens on a test of the bottom.
Remember I showed you this chart a week ago? We were sitting at 23-180s from the 623 low which just so happened to be the Powell rally launch pad. This thing had everything in its favor on the surface to go higher. Two higher lows with a reading and replication (23s). Then something strange happened.
Basically what I’m trying to piece together is the failure on liftoff. The problem is the rollover of the contracts from December to March and the numbers got switched up on the continuation chart so I had to scramble. Just when I wanted to get this chart done on Friday morning, all the numbers changed. Just be sure to rollover your own contracts as soon as you can.
What happened could be similar to the Bitcoin fail earlier this year but this is on a smaller scale. What ended up happening on the hourly above is the action fizzled at 28 hours from the 528 high. THAT’S IT.
You can see how weak the week closed. They’ll try to play a waiting game for the inflation report and Fed meeting. The open on Monday morning didn’t reveal too much but it did initially drop when the futures opened Sunday night.
But I’ll tell you the same thing I told you when Bitcoin started fizzling. If that 23-180 reading was invalidated, when that low breaks (which it did) the door is open for a much bigger drop. Its not that readings don’t work, its that we are dealing with nonlinear math and its important to understand the implications of what can happen when a good reading fails. You could get the equal opposite reaction.
So lets take a look at the Dow with its very complex reading which took me a couple of days to figure out. Sometimes, the more complex a reading is, the bigger the reaction coming out of it. This one is well hidden but I smoked it out.
We talked about that overhead resistance zone that was not tested. Instead the Dow had other ideas. How many of you remember a manual I did about 3-4 years ago called Counter Reversal Action Play? Its the kind of strategy we use in certain types of markets. Those of you who are new, we covered this a long time ago and just because it collects dust on the shelf for a while, there is always a time where it becomes relevant again.
See, the Counter Reversal is a strategy/tendency where we compare the relationship of 2 counter-trend thrusts in the market. Let me show you how this Dow is lining up. The last leg up to the August high was 4628 points. The current tally leg is 5928.83 points up. Lets look at that ratio. In this case we take 5928/4628 and its 1.28. How is that for replication? Both ranges end at 28 and the ratio from the bigger to smaller is 1.28. But thats’ not all. Its 228 trading days to the top last January and its also 329 calendar days. As it turns out, its also 75 bars back to the August 16 high and that only means something because the low came in on the Gann calendar’s 276dg vibrational day.
See how all this ties together? When we get 75 high to high and the low has a 76 vibration that’s called a pass-through reading as it passes on that 276 vibrational low.
The bottom line? Now we have a Big Tree manual so I’m looking to see if first support breaks right here because that little line you see at the low of that last big green bar at the top is potentially THE TRAP. It drops from here and it might not come back.
Now, it might not drop automatically because this is a Santa season and the market doesn’t usually drop in December very much. But I do remember many years where there seems to be one week before Christmas where the market really takes it on the chin. I couldn’t readily figure this one out but when I got curious and did the counter trend reversal test (simply taking the ratios of the 2 legs), that’s where the whole thing opened up to me. Then I saw the trading days/calendar days and came to the conclusion its a simple reading but its WELL HIDDEN. That’s been the theme of Kairos price and time vibrations. Simple but not easy. Dig and you’ll find. So lets see what another chart is up to. How about the SPY since I started on that last week.
This one is a little different but still lines u p. From the August high this high is a 74% retracement and the inverse is 1.35. So its 35 days up and its 74 days across from the August high. Good enough.
Then I had a coaching session where the client was interested in TSLA. So I found a major Counter Reversal that drove that chart.
This is not current action but you need to see this. If you are interested contact me if you would like Counter Reversal Action. Many of you will have it so check your hard drive before you email. The secondary is on a 181dg day for the Gann calendar, keep that in mind. So this high is up 48.06 points and the next one was 38.81. That ratio is 81%!
So this is incredible replication where we have a Gann calendar vibration lining up with the ratio of the 2 counter trend legs and its also 38.81 which rounds to 39 and since its a 220dg day with the prior high at 181dg, that’s 39dg!
Are we having fun yet? You can find these relationships on many charts and depending on the time frame you trade, you can readily use this. Its a little tough doing it on a 1 minute because one has to be lightning quick but I can work it on a 4 minute and I can certainly work it in the larger time frames.
So we have 2 major technical vibrations working. The high with the 28 replication and the fail on the 180 chart we discussed at the top. I can’t make a prediction on this but what I can tell you from past years is when the market falls in January there have been years where the actual peak was in early to mid December and we don’t realize it immediately. We’ll see this time.
Random Thoughts On a Scorecard
So after this week comes the holiday slower trading period. Its a good chance to take a little inventory. I hope many of you have come back to Twitter. I know many don’t like it or understand it. The reality is that Twitter is the world’s public square. I know they created Gab and Trump has his deal but Twitter is like the Rose Bowl, the granddaddy of them all. Its disturbs me Trump won’t come back on. I get it, he has certain legal agreements stating he can’t tweet for several hours after he tweets on his platform still, he could make it work. Musk has opened the floodgates with those Twitter files and for right now, free speech is improving, there are still certain algorithms on Twitter not allowing total free speech but its a lot better than it was 6 weeks ago. Just this week he allowed Roger Stone and Laura Loomer back on. That’s huge because the left has certain evil carnival barkers who think nothing of lying and gas lighting the public from one day to the next. Its terrible but they have a right. So let them get Loomered. If you are on Twitter, you’ll see I hit back just to let these people know they no longer have a free ride to roll over decent Americans the way they do. I don’t enjoy it and I admit to the frustration of seeing how the other side gas lights the way they do and not understanding how to curb it. Overall this is a spiritual battle but if something isn’t done to change the trajectory, this could get ugly for real.
But if Musk is allowing high profile people on our side, perhaps I should back off and work at being more of a statesman. I’m a trader but I’m also a writer with published books so I’m very sensitive to the free speech issues.
All I’m going to say is Musk’s action confirms what people like me have been saying for 2 years. The elections were stolen and it went big time in 2018. Even Hobbs here in Arizona was a key player in getting Kari Lake’s message completely censored on Twitter. This lady should not be allowed to take office. I have news for you, there will be recall efforts to get her out from day one. I live in a state without a governor but that’s nothing new because Doug Ducey has been missing in action for the past 6 months.
What amazes even more is despite Musk’s efforts that have produced fruit in uncovering all the fraud and criminality, many on the left choose to stick their heads in the sand and not believe it.
That leads me to Kyrsten Sinema who dropped out of the Democrat party the other day. Yeah, she’s another one who benefited from election fraud but she has not been a loyal Democrat. I noticed somewhere in the first year this lady voted exactly the way John McCain used to on the issues. Its like the military industrial complex, the neocons that Eisenhower warned about own Sinema the way they owned McCain. The dems don’t like it. But it is what it is. For me and the people who live in this state we can only hope Hobbs is going to be more like McCain and less like the communist running the state of California.
Finally, Wells reported the other night the Brazilian military decided to take out the red brigade protecting Lula who just stole that election thru the use of CCP cyber which is the hammer and scorecard. Don’t believe me, go check out Mary Fanning and she’ll teach you a whole new worldview for those who need it. What happened is their version of the Supreme Court refused an audit on the election and by Brazilian law the military has a right to get to the bottom of it. I can’t find other points of reference yet but Wells slipped and stated on Wednesday they were smashing the red brigade or whatever they are called. I just hope its true. If they can restore Bolsonaro it could be contagious and protests could pick up around the world. That would be what winning could look like.
Double finally, there is a case SCOTUS has considered to hear concerning the Brunson brothers who have sued roughly 360 members of Congress for withholding key evidence they had on the 2020 election. Its called Brunson v. Alma S. Adams. The reason this particular case has a chance is they aren’t challenging the results of the election, rather the representatives failure to follow thru on their legal duty and OATH OF OFFICE. They need 4 justices to take on the case (which should be a slam dunk but you never know these days). They are going to decide whether to take the case on January 6. If they do the right thing, it should be a game changer. The question is whether they do it. The way Brunson described it, one day a whole bunch of representatives would show up at the Capitol for work and their credentials would be stripped. Imagine the chaos that would cause. I don’t know what to tell you folks anymore because this could be the last legal remedy to save this country. If Bolsonaro could be restored it might give SCOTUS courage to do the right thing. Pray on it.