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March 20th, 2020: SP-500 Chart Update

Posted by pugsma on March 20, 2020

5:25 pm EST:   The SP-500 opened gap up from 2408, hit 2453, and faded all day hitting 2296 before closing at 2304.

The VIX closed down -8% to 66 with the SP500 down -4%  This is a positive divergence on the VIX with respect to the SP500 price and is potentially bullish for future SP500 price.  Also the NYMO closed higher at -55 vs -60 yesterday with the SP500 price closing down -4%  and is potentially bullish for future SP500 price.  Maintaining the call that the 2281 low from Wednesday is the bottom for the Primary (green) count for the end of PC-C2 or the alternate (red) count PA-C2.

The  primary (green) wave is that the Cycle (C2) wave has been playing out as a 3-3-5 running flat since the September 2018 high at 2941 ended the Cycle 1 (C1) wave.  The 3-wave drop from 2941 to 2347 in December 2018 was a Primary A (PA) wave.  The 3-wave move up from 2347 to 3394 was a Primary B (PB) wave.   The Primary C (PC) 5-wave drop from 3394 to 2281, has been typical of PC wave of a Cycle degree flat in that it’s been very fast.  The major [1] of P1-C3 is underway with a target of 2695.  This primary (green) wave count remains valid above the 2281 low.

The alternate (blue) wave count is that major [5]-PC-C2 is playing out as an ending diagonal from the major [4] high at 2711.  The 2281 low is minor 3 of major [5].   The 2467 high is minor 4 of major [5].  The final minor 5 of major [5] wave down is underway and must remain above 2195 to keep the ending diagonal valid, where minor 5 < minor 3 < minor 1.  The major [5]=0.88[1] target is 2238 and the PC=2.0PA target at 2206.

The less probable bearish alternate (red) wave count is a C1 wave that peaked in February 2020 at 3394 and a large C2 wave 5-3-5 Zig-Zag down to the 50%/62%/78% Fib (off C1 3394 high) at 2031/1703/1269.   The initial PA-C2 wave down is looking to completed at 2281.  The PB-C2 wave should be bounce up to a 50%/62% Fib at 2838/2971 (basis PA at 2281).   Following the PB bounce, there will be another massive PC-C2 wave lower that will break below 2347.  The PC=PA target is 1858 (right between the 50%/62% Fib targets of 2031/1703).  The alternate (red) wave count remains valid below 3394.

Be safe, healthy and have a great weekend!   

SP-500 15-min chart:

SP500 Technical Analysis

SP-500 60-min chart:

SP500 Technical Analysis

SP-500 4-hr chart:

SP500 Technical Analysis

SP-500 daily chart:

SP500 Technical Analysis

SP-500 weekly chart:

SP500 Technical Analysis


SP-500 monthly chart:

SP500 Technical Analysis

21 Responses to “March 20th, 2020: SP-500 Chart Update”

  1. pugsma said

    Every -30% draw down in US Stock Market History.
    Clearly the 2020 chart most closely resembles 1987 and 1929.
    The outcome after the initial -35% drop of those two events was completely the opposite direction.
    Hope for a 1987 outcome. Pray that this is not a 1929 repeat.

  2. pugsma said

    My free Twitter feed calls all this past week for a 17 month old Cycle 2 bear market low near 2300 and C3 rally into year 2021 is catching on.

    Interestingly there is at least one JPMorgan analyst who’s been a paid subscriber here for years.

  3. pugsma said

    Corporate insiders buying their stock at a bigger but/sell ratio than years 2008-2009.

  4. Yes, starting to see a few pulling out the 1929 comparisons. Praying for contrarian theory to work here! Go green! Oil and transport averages worry me, both well below 2009 low monthly trendlines.

  5. SPY Weekly Close below the lower weekly bollo
    After Friday’s close, it is time to update this study that was relevant in August 2015 and December 2018.

    Here are the instances of when the SPY closed below the lower weekly bollo for Opex week.

    1. Dec 2018 – MAJOR Bottom on 2nd Trading Day post opex / post holiday
    • Gapped down and ran on Monday post opex – closed at the lows – made a small lower low on the 2nd trading day post opex and rallied strongly
    2. Aug 2015 – MAJOR Bottom on Monday post opex
    • Absolute overnight collapse – Bottomed shortly after the open on Monday post opex – BUT it should be remembered that it was volatile and the low close was on the Tuesday post opex
    3. Oct 2014 Opex Wednesday low – Weekly Hammer Candelstick
    • Not relevant – other than to say that the market ran rapidly higher after this opex low
    4. Aug 2011** Major Bottom for Opex Period on Monday post opex (Closed at the lows on Opex Friday for opex week– but low for the move was the previous week)
    • Gapped up on Monday post opex, but then traded off all day and made a new opex period low at the close – took off higher on the Tuesday post opex
    5. Oct 2008 ** ( Low previous week -was an inside week and closed in the middle of the range)
    • Not particularly relevant.
    6. Jan 2008 MAJOR Bottom on Tuesday post opex / post holiday
    • The KERVIEL Gap Down. Market rallied right from the open after a huge gap down, but the lows were re-tested the next morning before the rally commenced
    7. July 2002 MAJOR Bottom on Wednesday post opex
    • Just a waterfall decline in July (Daily RSI 14 got to 19)
    • Two solid red candles on Monday and Tuesday post opex. Gapped down on the Wednesday post opex and a HUGE rally started
    8. Mar 2001 ## MAJOR Bottom on Thursday post opex / Post Fed
    • Closed at the lows on Opex day, rallied on the Monday, but then fell hard on Tuesday post opex (Fed Day) and Wednesday post opex – bottomed with a hammer candlestick on the Thursday post opex
    9. Oct 1999 MAJOR Bottom on Monday post opex
    • Had a HUGE outside week down (Monday high above the previous week’s closing high) and closed at the lows just below the lower weekly bollo band.
    • Monday post opex – opened about unchanged – traded down a bit more than 1% (below the lower daily bollo) reversed and headed sharply higher

    Note: Jan 2016 – SPY closed .02 above the lower Weekly bollo
    • It had rallied in to the close on Opex Day and gapped up post the holiday only to fall hard in to the Wednesday post opex / post holiday bottom

    Bottom Line:

    The markets SHOULD make a bottom either Monday or Tuesday this week. It is possible that it could be later than that – such as Wednesday or Thursday (like in March 2001), but given the price action from last week, I would think it would come sooner rather than later – possibly with a HUGE GAP down on Monday and an early bottom (like August 2015 or January 2008) or a solid RED candle for the day and a bottom either near the close or possibly just slightly lower on Tuesday (like in December 2018).

    We shall see….


  6. petemerch said

    Interesting night ahead, the primary green will be invalided below 2281 and the alt blue hanging in by a tread above 2195….

    • pugsma said

      Let this be an example as to why I have a blog comment rule for subscribers to NOT try to use ES Futures to project things about my CASH market wave count and typical analysis.

      Please everyone pay attention for the next time you feel like making this mistake. It helps no one here.

  7. pugsma said

    This is a good example of how the equity markets are forward looking by 6 to 9 months:

    The SP500 has already priced in Q2 and Q3-2020. It will soon be pricing in Q4-2020 and early 2021. Most GDP estimates for then are +4% or even higher. What do you think the SP500 will do as it begins to price in 9 months, 12 months into the future.

  8. nashvagus said

    Just noting VIX peaked 84.87 last Wednesday. Currently, hanging around 71 10 minutes into Monday trading. Any insights?

  9. pugsma said

    This primary (green) wave count remains valid above the 2281 low.

    So far the SP500 has hit 2229 this morning. The alternate (blue) major [5] ending diagonal to hold above the ED max of 2195 is now the primary. Below 2195 the count will become the new alternate (blue) count below.

    The new alternate( blue) is that 2467 ended major [4]-PC and this move lover is major [5]-PC headed towards the 2150 to 2031 area.

    • pugsma said

      A slight tweak to the major [5]-PC-C2 ending diagonal allows it continue below 2195.

      The major [5]=[1] target is at 2173.

      I post the charts in the next 30 minutes.

  10. rat8nine said

    spx daily with fibs

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