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January 22nd, 2014: SP-500 EOD Update

Posted by pugsma on January 22, 2014

5:20 pm EST:   Today’s SP-500 small price movement did nothing to changes the wave counts.  The Bollinger Bands (BB) on the SPX, VIX and $NYMO are extremely tight, meaning a  large movement in the SP-500 price should soon occur.  The direction of which will be determined by which wave count is correct.

Primary count is that wave ii-(3) of minor 5 of major [5]-P3-C1 has ended at 1832 at the 50% retrace of wave i-(3).    Now wave iii-(3) should be underway moving towards at 1889 target, where iii=1.62*i.  Today’s price action looks like wave 1-2 of iii, meaning that tomorrow should see the start the explosive upward wave 3-iii of (3) towards 1878, where 3=2.62*1.   The wave (3) target is at 1909, where (3)=1.23*(1) and ultimately P3-C1 should ended in the 1931 to 1941 target area over the next month or two.  This primary count remains valid above the recent 1815 low for wave (2).

The alternate (blue) count has wave v-(5) of minor 5 of major [5]-P3-C1 complete at 1851 and the P4-C1 correction is just beginning.  There is a double top potential at 1850 that measures to 1780 which would be the minor 1 of major [A]-P4-C1 wave down before a minor 2 bounce.  I’m looking for wave (1) of minor 1 to reach the 1815 pivot before a wave (2) bounce of 50% to 1833.  Waves (3), (4) and (5) should take minor 1 down to the double top area of 1780.   Note that there is also a large potential head and shoulders topping pattern (shown on the 60-min chart) that began in late November that should help take the major [A]-P4 wave down to about 1687 to 1730.  Ultimately the P4-C1 correction should be at least a 23% fib retracement of P3-C1, which will drop the SP-500 back down to the 1687 pivot area over the next 6 to 9 months.

Note that it will take a break below the 1815 low to make the alternate (blue) count more probable.  As long the SP-500 stays above 1815, the intermediate trend remains higher via the primary wave count.  The primary count would be confirmed on a decisive break above 1851.

SP-500 15-min chart (EOD):

PUG SP-500 15-min chart EOD 1-22-14

SP-500 60-min chart (EOD):

PUG SP-500 60-min chart EOD 1-22-14

SP-500 4-hr chart (EOD):

PUG SP-500 4-hr chart EOD 1-22-14

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