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Time and Price: The Lennon and McCartney of the Market

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Time and price are the unstoppable duo -- and the final judges of the market.

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Editor's Note: The following is a free edition of Jeff Cooper's Daily Market Report. For a two-week FREE trial of his daily commentary and nightly day and swing trading picks, click here.

Well you may be a lover but you ain't no dancer
-- "Helter Skelter" (The Beatles)

Price is the final arbiter, but time is the judge. When time is up, price turns.

It is price that pays, but good price comes to patience. This is the tug-of-war that dominates the trading landscape.

It is price that pays: It pays to focus on accumulation and distribution and where the buyers and sellers come in, but timing is everything. And, timing is more difficult to ascertain than obvious price points on a chart.

I bring this up because the gnome high in the Appalachians pinged me to say that yesterday we were 1,111 days from the March 6, 2009 low and that a price of 1,111 opposes March 6 on the Wheel.


Click to enlarge

It is very interesting that 1,111 prophetic days from the low falls on the vernal equinox, the first day of spring.

Also significant, I think, is that my 1,407 number is 741 points up from the 666 low from March 6, 2009.

741 was the low of the November 2008 crash.

Yesterday, we were 1200 solar degrees from the November 21, 2008 low (three years or 1080 degrees plus 120 degrees back).

Also, it is interesting that on the week of the 12th anniversary of the 2000 top that we are 1200 degrees from the 2008 low, which was the low around the world, and the low on many key names.

It is notable that November 21 ties to 79, which was the low on Apple (AAPL) at that time. Apple went on to make the most nominal new lows in January 2009 near 78.

Yesterday Apple tailed off, leaving an 'innocent' little sell signal and an N/R 7 day. The N/R 7 day suggests volatility should show up in Apple, and given the one-way monolithic move in the name, the normal expectation would be a downside probe.

It will be interesting to see if the Applemanians step in to buy another hourly dip or stand down this morning.

Has Apple carved out 3 Drives to a High… or at least a high preceding a genuine correction?

Tuesday, Apple scored a large range outside up reversal day. Trade below Tuesday's low will trigger a Reversal of a Reversal and should elicit selling pressure.



Note how the pattern of 3 Drives to a High played out in Broadvision (BVSN).



The gnome also wisely noted that from the October 2002 low to the October 2007 high was 1,827 days.

From the March 2009 low to this week's Vernal Equinox is roughly .618 times 1827.

Yesterday's late selloff came following a 1 2 3 Swing on the 10-minute to a test of the morning high near 1,407. This is a potentially bearish testing pattern and a last-hour swoon played out.

Apparently, someone was front-running some selling pressure this morning.



Conclusion

The market remains in a corrective phase with Caterpillar (CAT) being emblematic of the distribution.

The bulls are fighting to keep the indices up until quarter end, and with Apple tired yesterday, they gunned Google (GOOG). However, the bulls may be fighting against index funds which have great gains for the year, and may cut and run before March 31.

Moreover, the cyclicals are getting hit, the techs are vulnerable, and the oils are slipping, so the action today in Google and IBM (IBM) will be interesting. If they are down, it may mean the bulls are in retreat as to quarter-end.

The normal expectation in a bullish pullback would be a backtest of the 1,370 breakout pivot. Theoretically, that should act as support, especially on the first time down to test. If a decline does not hold at 1,370, I think it is a conspicuous sign that the song does not remain the same.

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No positions in stocks mentioned.

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