Technical Analysis Blog | PUG Stock Market Analysis, LLC

5:10 pm EST:   All I can say is what a week in the Markets!  Definitely challenge and interesting markets to navigate and chart.  Today the SP-500 gapped down and hit 2856 before closing at 2954.

The existing primary (green) wave count bullish resolution to the P5-C1 wave top above 3394 failed with the drop below 2954 today.   That made the 3394 high the potential P5-C1 top, something I’d been suggesting as a potential wave count since back in November/December 2019.  However, after looking at the SP-500 monthly chart, it’s very clear that the SP-500 is still in a very long-term uptrend channel off the March 2009 low of 667 as long as the December 2018 low of 2347 holds.  And to be more precise the 50-month SMA at 2581 is a key up-channel support line going back to year 2011 (see the light below line on the monthly chart).  Thus, I’ve decided to keep a bullish market stance even with this big (538 point, -15.9%) sell-off from 3394 to 2856, as long as the 2347 low holds.

The new primary (green) wave count is that the SP-500 Cycle 2 (C2) of Super Cycle V (SC-V) wave ended in December 2018 at 2347.  The move up from 2347 to 3394 was Primary 1 (P1) of Cycle 3 (C3) of Super Cycle V (SC-V).   This drop from 3394 to 2856 (thus far) is the Primary 2 (P2) wave of C3.   Thus, far the drop to 2856 is right below a typical 50% Fibonacci retracement at 2871.   However, there are potentially deeper Fib retracements for P2 at the 62% Fib of 2745 and the 78% at 2577 (near the 50-month SMA of 2581).  Within the P2 wave I see major [A] ending at 3007 and major [B] at 3097.  The major [C]=0.62[A] target is 2857, which is also agrees with today 2856 low.  However, the major [C]=[A] target is 2710, so a slight deeper P2 wave is possible.  Once the P2-C3 wave ends, the next move up will be a massive P3-C3 impulse wave that will move far beyond the 3394 high to a target area near 4552, where P3=1.62P1.   This primary (green) wave count remains valid above the Cycle 2 (C2) low at 2347.

The alternate (red) wave count is that the Cycle 1 (C1) of Super Cycle V (SC-V) topped at 3394 and this move down to 2856 (thus far) is the Primary A (PA) of Cycle 2 (C2).   Once the PA wave ends, there should be a PB wave bounce higher to a 50%/62% Fib near 3125/3190 area (basis a PA low at 2856).  Then there will be a massive PC wave lower that breaks below 2347 and reaches a 50%/62% Fib target area of 2031/1703 to complete the C2 wave.  This alternate (red) count would become invalid on a break above 3394.

Have a great weekend!

SP-500 60-min chart:

SP-500 4-hr chart:

SP-500 daily chart:

SP-500 weekly chart:

SP-500 monthly chart: