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May 5th, 2020: SP-500 Chart Update

Posted by pugsma on May 5, 2020

4:45 pm EST:   The SP-500 gapped up from 2842 to 2868, rallied to a high at 2898, then had a late day drop to 2864 and closed at 2868.

The primary (green/white) count is that major [1]-P1-C3 topped at 2954.  The minor A of major [2] wave was a 5-wave drop to 2798.  Minor B retraced just over the 62% Fib (2895) to 2898 as 3-wave move (a)-(b)-(c).   Next should be a minor C, 5-wave drop towards the C=A target area of 2742 to C=1.62A = 2645.  The target 38% Fib for major [2] is at 2664.  A break below 2798 will confirm the primary (green) count, which remains valid below the 2954 recovery high.

The alternate (blue) count is that minor 4 of major [1]-P1-C3 dropped into the typical 23% to 38% Fib retracement area of 2837 to 2761 and completed at 2798.  Minor 5 of major [1] is underway as a 5-wave move that will extend beyond 2954 to at least the 3037 target, where minor 5 = 0.62*minor 1.  Wave minute (1) of minor 5 completed at 2898.  The minute (2) wave should retrace to the 38% to 50% Fib range of 2860 to 2848, before the minute (3) wave extends above 2954 towards the (3)=1.62(1) target at 3010.  The alternate (blue) count remains valid above the minor 4 low at 2798.

Note;  It’s pretty simple now, a break below 2798 confirms the primary (green) and above 2954 confirms the alternate (blue).   As I showed earlier today, QQQ has already confirmed its move higher than SP500 2954 equivalent.

SP-500 5-min chart:

SP500 Technical Analysis

SP-500 15-min chart:

SP500 Technical Analysis

SP-500 60-min chart:

SP500 Technical Analysis

SP-500 4-hr chart:

SP500 Technical Analysis

13 Responses to “May 5th, 2020: SP-500 Chart Update”

  1. hh101063 said

    Thanks for the great guidance. you mention that QQQ has been above its “2954 equivalent”. Can you say anything about the stats on likelyhood that SPX will follow? I believe the QQQ remained about the 220.05 mark for a very few minutes and then dropped to 216-217 as did all the other indexes. What does it take to invalidate the signal? Thanks.

    • pugsma said

      It’s not a signal, it’s a price observation on QQQ vs SPX. The QQQ has confirmed a new recovery high for major [1]. The SPX does not have to follow the QQQ wave count, but often does.

  2. pugsma said

    I just recorded a new 12 minute video on the SP500 wave count(s).

    I will be publishing it shortly.

  3. MS53 said

    Great video. Your 5 min chart is showing a possible HS formation targeting 2625 approx.

  4. pugsma said

    2856 was close to a 50% Fib for minute (2) of alt blue count.

    So far a very aggressive move up to 2882 for a potential minute (3) wave of minor 5.

    A break about 2898 would be very positive and likely imply alt blue is the correct count.

    • pugsma said

      And a variant of the alt blue count to watch for here is a minor 4 wave triangle between 2798 and 2954.

      Minute (a) at 2798, minute (b) at 2898, minute (c) down now to hold above 2798, the minute (d) up to hold below 2898, then minute (e) down to hold above minute (c).

      This triangle would frustrate most traders and produce a minor 5 pop to 3000 later next week.

  5. Bill S. said

    FWIW, I’m starting to see some preliminary red flags showing up some of my sentiment indicators. One of the things I have found is that equity options traders tend to be dumber money than index option traders so I follow a spread of index vs equity options put/call ratios. In the last few days it hit an extreme reading in terms of the spread between smart and dumb money which suggests some headwinds for the bullish side. It’s not a short-term timing tool as it can be early but it would suggest that any further gains from here will be given back and then some over the intermediate-term (coming weeks).

  6. pugsma said

    The SP500 Bollinger bands are getting tight. Implies a big move is coming soon.

    • and the May opex period is on the way…. just in time to help widen them…..

      The Late employment report is also an interesting one as we RARELY EVER fall through a late employment report and in to opex week…. In fact, it has only happened twice before Jan 2009 and Jan 2016… and both bottomed significantly lower post opex….

      May late employment – there have just been two instances since 2007
      -May 2015 – BOTTOM on Wednesday before (and a more significant top on Wed post opex)

      and

      -May 2009 – TOP on Employment day and a week long 6 +% pullback… that bottomed for a bounce on opex day.

      Historically, May does make an extreme during the first 4 days of the month, so that would lean towards Monday being a decent low that sets up for a rally in to the opex period and then a potential top during opex week or post opex.

      For now, my specific work has no edge, but history would point to the first rally off of the 20 day MA being a solid one, which it has so far been.

      Pug’s bottom call on Monday was IMPRESSIVE. I think his simple statement above on the two counts makes a lot of sense. I can see historical justification for both – with a slight edge to the alternate, as there are so few significant April tops and quite a few May ones.

      -D

  7. pugsma said

    I just added Chapter 3 on Corrective Waves:

    https://pugsma.com/pug-elliott-wave-technical-analysis-tutorial/

  8. pugsma said

    If you believe in the predictive power of the NYSE A-D cumulative chart (market breadth), then IF it closes near here it’s showing a new low below Monday’s low (with 2798 SPX equivalent). That would mean the SPX should follow lower than 2798.

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