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January 3rd, 2014: SP-500 EOD Update

Posted by pugsma on January 3, 2014

4:30 pm EST:   Bull markets love to surprise to the upside just when traders are getting fearful of a larger correction.   The primary count is that wave (2) of minor 5 of major [5]-P3-C1 bottomed at 1828 and wave (3) is underway headed for at target of 1927, where (3)=1.23*(1).  The first wave i-(3) should reach a 1860 target before a pull back in wave ii-(3) to back test the 1849 pivot.  The wave iii-(3) target is at 1902, where iii=1.62*i.  Ultimately wave minor 5 of major [5]-P3-C1 should reach the 1935, where minor 5 = 1.62*minor 1.  This also corresponds with the P3=1.23*P1 target of 1941 and the major [5]=[1] target of 1974.  This version of the primary count remains valid above the 1828.  If the 1828 level is breached, then wave (2) could test the 1814 pivot area before wave (3) up gets underway.  The ultimate limit of the wave (2) correction is the minor 4 low of 1768.

The alternate (blue) count is that major [5]-P3-C1 topped at 1849, just above the major [5]=0.62*[1]=1842 target.   Primary wave 4 (P4) is now underway that should last several months and test the 1576 to 1553 pivot area for a 38% retracement of P3.  The first move lower to 1827 was wave (1) of minor 1 of major [A]-P4.  Today wave (2) of minor 1 bounced to the 1838 area.  Wave (3) of minor 1 is now headed down the 1781 area, where (3)=2.62*(1).  I’m looking for minor 1 to reach the 1768 before wave minor 2 bounce to 1814 and from the right shoulder of a topping Heading and Shoulders (H&S) pattern with head at 1849, neckline at 1768 and target 1687 to complete major [A]-P4 (see the 60-min chart for details).   This alternate (blue) count remains valid below the 1849 high.

Have a nice weekend.

SP-500 15-min chart (EOD):

PUG SP-500 15-min chart EOD 1-3-14

SP-500 60-min chart (EOD):

PUG SP-500 60-min chart EOD 1-3-14

SP-500 4-hr chart (EOD):

PUG SP-500 4-hr chart EOD 1-3-14

SP-500 daily chart (EOD):

PUG SP-500 daily chart EOD 1-3-14

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