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Januaury 4th, 2012: Update 2 – EOD

Posted by pugsma on January 4, 2012

6:10 pm EST:  To go along with the negative divergences building on the daily chart below, don’t lose sight of the this bearish intermediate term 2nd alternate (red) count shown on the 4-hr chart below.  This 2nd alternate (red) count is for a minor degree A-B-C, 3-3-5 flat for major [2]-P1-C3 that will re-test the 1158 area by mid-February in a 5-wave minor C drop after peaking here for a minor B wave between 1285 and 1293.   This 5-wave minor C drop from 1285 to 1158 would scare the daylights out of the Bulls and emboldened the Bears, setting up the next big move up in wave [3]-P1-C3.   This is still a low probability count right now, but if the 1245/1257 pivot fails on  re-test then keep this count in mind.

SP-500-4hr chart (EOD):

 

5:45 pm EST:  There is some scary looking negative divergence both on the $NYMO and Dr Copper Proxy (JJC) with respect to the Jan 3rd, 2012 SP-500 price high of 1285.   The SP-500 daily chart below has some similarities to the July 2011 and October 2011 SP-500 price peaks.   It is time to be cautious until this negative divergence either get whipped out or play-out with lower SP-500 prices.

SP-500 Daily Chart with $NYMO and JJC (EOD):

4:00 pm EST:   Once again the McClellan Oscillator $NYMO produced a 2nd negative divergence (+37 vs +47) with today’s closing SP-500 price slightly above the Jan 3rd closing price.   This goes along with the 1st negative divergence (+47 vs +51) of the $NYMO between the SP-500 closing price high from Jan 3rd (1277) vs Dec 23rd (1265).  The $NYMO double negative divergence is warning that there should be a significant SP-500 price sell-off over the next several days.  This goes against the primary count and argues strongly for the alternate (blue) count to play-out for a wave (2) between Jan 5th and 9th.

The primary count is that wave iv-(3) of minor 3 of major [3]-P1-C3 ended today at 1268.10.  Wave v-(3) up began and is headed for a first target between 1312 and 1315, where v=1.62*iii and (3)=(1).   A move below 1264.12 will invalidate this primary count.

The alternate (blue) count is that wave (2) of minor 3 of major [3]-P1-C3 is playing out as a double Zig-Zag (ZZ).  The first ZZ, wave y, ended today at 1268.10.  The move up to 1278.72 was a wave x and now there will be second ZZ, wave y, drop down to a target of 1262 (y=w) to 1252 (y=1.62*w).  There are also the 38% retrace (1254), 50% retrace (1243) and 62% (1234) targets for wave (2).   This alternate count becomes invalid with a move above 1288.50.

Support is at the 1257 and 1245 pivots and resistance is at the 1291, 1303 and 1315 pivot cluster.

SP-500 5-min chart (EOD):

SP-500 15-min chart (EOD):

SP-500 60-min chart (EOD):

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