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Apr 21st, 2011: Update 3 – EOD

Posted by pugsma on April 21, 2011

I’m offering a $50 special (normal rate is $75 per quarter) May-June Premium Service for Q2-2011 (April 1st to June 30th) , where the rest of April is free.  You can read about the service description, the requirement to sign the TOS Agreement and sign-up information here:  http://pugsma.com/pug-premium-sign-up/

I’m hope everyone has a nice time at HOME this Easter Weekend.  Enjoy this Edward Sharpe and the Magnetic Zeros Video – “Home”

5:30 pm EST:   What a wonderful close to the week for the bulls.  🙂   It certainly did not start off as forecast based on my Friday April 15th EOD update.   But we adapted to the curveball (i.e. S&P USA Debt Outlook Downgrade) thrown our way Monday morning and made the correct call at the EOD of Monday and intra-day Tuesday, that set us up to profit from the explosive bullish move that ensued.

For the primary count (white labels) the v-(1) of minor 3-[5]-P3 looks complete or very near complete.  There were two likely targets of v=0.62*i => 1338 and v=i => 1343.  The 1338 target was hit in a 5-wave move from 1328.45 yesterday to 1337.49 today.   But we also need to leave open the possibility of one more small push higher to hit the 1343 target early Monday.  I’m expecting the wave (2) pull-back to be fairly shallow as either a 23% retrace to 1332 or a 38% retrace to 1324.  If the SP-500 is in a minor 3-[5]-P3 move higher toward the IHS target of 1429, then this (2) pull-back should be small in magnitude and short in duration.  And the wave (3) of minor 3-[5]-P move up should be very strong in busting through the 1340/1344 gap resistance (IHS neckline) on its way toward the minor 3-[5]-P3 target area of 1380 to 1400.  Ultimately the major [5]-P3 target is the IHS target of 1429 by mid-June.   From there Primary Wave 4 (P4) should be a sharp correction down to about the 1315 pivot (-8%).   And ultimately Primary Wave 5 (P5) will rise toward 1525 to 1575 into the end of 2011 and early 2012.

If the pull-back is deeper and more long-lasting next week, then we must look at an alternate count (blue labels) where this entire move up of the major [4]-P3 low of 1249 could be a large Ending Diagonal (ED).  It this case, the major [5]-P3 move will likely complete near the 1363 pivot resistance in the next few weeks.  The ideal target would be where major [5]=[1] at 1367.  In this alternate count, the move up from 1295 to 1343 is wave (a) of minor 3-[5]-P3 and next we would expect a 50% retrace back towards 1319 for wave (b) of 3-[5]-P3.    Wave (c) of 3-[5]-P3 should move up slightly above the 1339 area to about 1350 and minor 4-[5]-P3 would over-lap the 1339 minor 1-[5]-P3 high.  Ultimately minor 5-[5]-P3 would end near the 1363 pivot.  Note that all minor degree waves of the ED must sub-divide as 3-wave moves (i.e. 3-3-3-3-3 pattern).  This ED would be a slow grinding end Primary Wave 3 (P3) and usher in a Primary Wave 4 (P4) correction (-8%) back down to the 1257 pivot area during the early summer.  From there Primary Wave 5 (P5) would rise to about 1440 to 1475 into the end of 2011 and early 2012.

Support is at the 1331/1333 gap, the 1313/1319 gap and 1315 pivot.   Resistance is at the 1340/1344 gap and then the 1363 pivot.

The markets are close in the USA tomorrow in observance of Good Friday.  Enjoy your weekend !!!

SP-500 5-min chart (EOD):

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

SP-500 4-hour chart (EOD):

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