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April 6th, 2020: SP-500 Technical Analysis

Posted by pugsma on April 6, 2020

4:20 pm EST:  The SP-500 opened gap up from 2488 to 2578, hit the late March 2637 high around now, consolidated above 2620, then surged to a 2677 daily high and closed at 2663. (an impressive daily gain of +7.0%).

The primary (green/white) count is that minor 1 of major [1]-1-C3-SCV completed at 2637 (2641 orthodox high).   The minor 2 wave played out as a flat wave at 2447.  The initial target for minor 3 is at 2723, where minor 3 = 0.62*minor 1.   A 38% Fib retrace for minor 4 is at 2618 overlapping minor 1 at 2637.  I’m looking for the major [1] wave up from 2192 to an initial target of 2856 to play out a possible leading diagonal.  A leading diagonal will typically retrace to 50%/62%78% Fib, which at 2524/2444/2338 for the major [2] wave.  Thus, I’m expecting the deep major [2] wave retrace to test the 2192 low later in May or early June.

Note 1:  On the 15-min chart, there is a Cup and Handle (C&H) on the 15-min chart with rim of the Cup at 2641, Handle drop to 2447 and target of 2835.

Note 2:  On the 4-hr chart, notice that from the Dec 2018 V-bottom low the SP-500 had a minor 2 wave pull-back of 44%.  The current minor 2 wave pull-back from 2641 to 2447 this week was also 44%.

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

44 Responses to “April 6th, 2020: SP-500 Technical Analysis”

  1. pugsma said

    A few technical analyst are coming around to my S500 market view, all be it 7 days behind my Thursday March 26th call.

  2. hh101063 said

    Thanks for the update. One question about time vs price. given the speedy ascent of minor 3 close to finalising, followed by small minor 4 drop it could look like completion of major 1 by the end of the week? If so, could it be that the “late may/early june” target for bottom of major 2 that you mention would happen much earlier? Or do you expect the Leading Diagonal you mention to use a month or more in playing out? I do understand that the time-aspect is not a definite science but looking for some guidance / thoughts only. Thanks.

    • pugsma said

      I’m not concerned with time at all. We all get paid by price!

      • aka2106 said

        Steve did we get any move on the ZBT that you referenced earlier?

        • pugsma said

          No the Zweig Breadth Trust (ZBT) failed to reach 0.615 within the 10-day window since March 23rd that ended today.

          It went from below 0.40 to 0.58 within the first 3 days, then trails off to end at 0.50 today.

      • aka2106 said

        Thanks VM. And to confirm- like all things technical the most important thing to focus on here would be price and not the corroborating signals?

        • pugsma said

          While the ZBT is very good indicator of and cyclical bull market, but it’s not required. It’s also quite rare.

          That being said, often times the ZBT will Fire during the start of the Major [3] wave, AFTER the major [2] drop scares most bulls and emboldens the bears.

          • pugsma said

            One last point, I would expect a ZBT to Fire during a leading diagonal major [1] wave, as an LD wave is just to weak.

      • doubleug said

        Steve, your last comment here about the ZBT not firing during a major [1] leading diagonal is a great segue to my question: Could you explain your intuition in calling for this major [1] to be a (weak) leading diagonal? A more typical bullish extension of Minor 1 (1.62 x 1) would place Minor 3 to almost 3200.

        • pugsma said

          It’s an art to interpret (read) the waves. The very sharp move up for minor 1 and then meandering wave 2 flat looked like start to a Leading Diagonal (LD) for Major [1] to me.

          That said, I won’t rule out a true impulse wave for major [1] that follows a typical minor 3 = 1.62*minor 1 = 3168.

      • doubleug said

        Awesome, Steve. Thank you. The science (math) part to me is easy. It’s the art of this endeavour that’s taking me much more time to acquire. I appreciate you communicating a consistent attempt to help us all learn!

      • bleu9 said

        What would you need to see for you to switch your position to 3168…Thanks

  3. pugsma said

    So in order for major [1] to remain a Leading Diagonal (LD), minor 3 must be less than minor 1.

    Minor 1 was a 445 move up from 2192 to 2637.

    Minor completed at 2447,

    Thus the maximum for this minor 3 wave is 2447 + 445 = 2892

  4. pugsma said

    Sadly I feel many might have not caught this +10% gain up from 2488 to 2740, that was precisely charted out per my primary (green) count. Almost all the comments here Thurs and Friday were bearish. I even had to moderate a few very bearish comments that attempted to undermine my focus on the bullish outcome this week.

    Last night Twitter was littered to people angry that they were either short going into the weekend or in cash looking for a move below 2192 this week.

    • aka2106 said

      Steve – I was too early to exit a long last week and your comment around this market may not let people looking for a dip back in (paraphrasing) stuck with me. Luckily I couldn’t ignore the cup and handle call from late last week. I am not sure I’ve ever seen a better long setup.

    • andthis said

      Steve, as usual, great work on this move. I have learnt (over the years) just to focus on the primary. Don’t overthink it, don’t look at the news. Just look at the primary. I don’t know how you do it but I am glad you do.

    • rat8nine said

      My sense is that the flat wave b of 2, and the shallow wave 2 did a good job of hiding wave 2. It seems to me that there have been more flat waves during this time, including the February high…does that indicate anything to you?

      • pugsma said

        Yes flat waves are very tricky. They fool a lot of traders. It’s a tool in the Elliott wave arsenal of possible counts that allows us (me) to snoop out complex situations that might otherwise be missed.

      • rat8nine said

        Indeed! Thank you as always for your reads.

    • dangd said

      Not everybody knows you the way us longtime followers coming up out of the ashes of the GFC, or even the 2011 shakeout do. I decided to subscribe back in 2010 after reading the grudging admiration of a (then at least) die-hard bear who referred to you as the bullish Boilermaker who was maddeningly right once again.
      About the situation now, I see an island bottom coming out of the weekend, above a near island bottom from March 23rd.

      • pugsma said

        Bullish Boilermaker definitely fit during the 2009 to 2017 time frame.

        Calling the C1 top was certainly challenging. I was early on the call during 2018 and 2019. The strong late 2019 rally to 3394 certainly caused confusion on the C1 top.

        I’m just grateful that I recognized the potential C2 expanded flat wave before the 2192 bottom and began to prepare everyone for this call that C2 was a 17-month long flat that was likely ending at 2192 or at worst 2031.

  5. bleu9 said

    You are right and I missed it ! but please help with this ?, are“nt these big % moves indicative of a bear market…at least that`s how I have been trained to think…..By the way great job ..You nailed it !

    • pugsma said

      My best advice (since you are a new April free subscriber who’s been here all of 3 days) is just observe without bias. Bringing old bias won’t help you trade my Elliott Wave TA.

  6. pugsma said

    Amazing how many Wall Street “Experts now (April 6th to 7th) see what a saw and called on March 23rd to 26th.

  7. pista99 said

    Seems like top o m3 was 2753…means m4 will test the breakout 2650s? TY

  8. pugsma said

    So that’s enough about the past few days. I’m very pleased that my primary (green) played out to near perfection.

    Let’s talk about the future:

    Major [1] of P1 of C3 bull wave is the “hope” wave. The market rallies on any signs of “hope” about the future positive economic activity.

    Major [2] of P1 of C3 bear wave is the “reality” wave. The market back slides on real world data of how difficult it is to re-start the economic activity.

  9. R Swaim said

    Your calls extended to looking at other markets too. ERX looks peaked for now (very short term) but has been smoking! 🙂

  10. rat8nine said

    spx in three timeframes: 60, 15, and 5

  11. pugsma said

    Just an FYI:

    I’m trying to decide is 2757 was wave (3) of minor 3 and this is (4) pull-back before a wave (5) run up to 2794, where minor 3 = 0.78 * minor 1

    Or if 2757 completed minor 3 and the minor 4 pull-back to 2597 pivot area is under way.

    So far it looks like only a wave (4) of minor 3 pull-back.

  12. That is a pretty bearish daily candle rejection off the 2009 trendline. Is it possible we are nearing the end of a 5-3-5 ABC corrective wave from the March low as opposed to a impulsive leading diagonal?

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