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Jeff Cooper: Mr. Crash's Calling Card


There are only two kinds of traders in stampedes: the quick and the dead.

On my command, unleash hell.
-Maximus Decimus Meridius, The Gladiator

Love is love and not fade away 
-Mick Jagger

Yesterday we got another failed rally as the SPX Daily Swing Chart turned up.

What is so pernicious about this morning's decline is the huge gap that is going to threaten the notion that a fractal from the August/September W Bottom was on the table.

To repeat myself, there are only two kinds of traders in stampedes: the quick and the dead.

What is additionally diabolical about Mr. Market is that internals, specifically, the A/D Line were setting up divergences suggesting the January 20 bottom should hold.

But as Gann offered, "Time is more important than price."

This is a simple lesson in hindsight -- all rallies are for the selling until TIME, as to the Gann Crash Window is up.

All the oscillators in the world are not a match for Time.

As offered in yesterday's report, the trouble with The Fractal is that the Gann Crash Zone looms large.

And we're already in a spiral ---not just a downtrend.

We took a stab at a couple of longs thinking the SPX could fully backtest its 20 day line and 1900 before turning down again.

But discretion dictated we buy PILOT positions.

We were tempted to 'get cute' and sell the second pieces of GLD and GDXJ to protect profits after they left signal reversal bars on Monday.

'Protecting profits' can often be the antithesis to riding the trend.

The moral of the story is when the trend is tenacious and in a vast move, shakeouts are to be expected -- more so than usual.

So instead, we bought miner NGD yesterday.

Where could the SPX be headed if the wheels come off... again?

In late January we noted that 1798 aligns wth February 19 when the Gann Window closes.

Other prices that vibrate off that date if the SPX is spiraling are 1756 (90 degrees square Feb 19, 1714 (180 degrees opposite Feb 19), 1673 (square Feb 19) and 1633 (conjunct Feb 19).

Conclusion. Wednesday's failure is eliciting a Breakaway Gap.

The prospect for another W Bottom is being trumped by the prospect of a little inverted Cup & Handle (from January 20th)...the handle being this week'ss price action.

Long time readers will recall that I often say the markets often play out in 3's.

The crash started on the 3rd turndown of the 3 Day Chart in early January.

Importantly, the 3 Day Chart has NOT been able to turn up so far this year.

This is the Mr. Crash's Calling Card  -- the failure of the 3 Day Chart to turn up and the Gann Panic Window remaining open.
Both pertain to TIME.

Price is the final arbiter, but Time is the judge.

Oil is testing the 26 square-out low and a test/undercut may occur into next week (February 19). At the same time, GLD is set to test our projection of 120ish.

See GLD chart with projection to 120ish here again:

Also see my comments from February 2.

We are long GLD from 107.25 and long GDXJ from 18.75.

Instead of selling the balance , we will raise our stop on GLD to 115 now and see what happens from here.

Our premise that gold is benefitting from a loss of confidence in the 'Twins', the Sovereign's and The CB's is on the table.

The fact that the market faded and is in a tailspin after Janet spoke yesterday and is due up in a few hours is a change in character. It used to be that The Hand was able to fluff up the feather in front of the Fed Chair.

The Central Bank Bubble may be bursting.

Twitter: @JeffCooperLive

Click here to take a FREE Trial to Jeff Cooper's Daily Market Report. Jeff was up 14.7% in 2015 and he's up over 4% in 2016. Click here for more information.
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No positions in stocks mentioned.

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