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May 26th, 2020: SP-500 Chart Update

Posted by pugsma on May 26, 2020

11:20 am EST:  The SP-500 gapped up from 2956 to 3004 and quickly hit 3022.

The primary (green) wave count continues to track the minor 5 of major [1]-P1-C3 wave higher towards the targets that range from M5=0.62*M1 at 3042, M5=0.78*M1 at 3113 and M5=M1 at 3212.  Breaking above the 200-day SMA (3000) and reaching the 3113 area for major [1]-P1-C3 would follow the year 2009 analog (that I’ve been posting through out May )for major [1]-P1-C1 very well.  In year 2009, the major [2] pull-back was only a 30% retrace of major [1], which would be at 2837, basis major [1] ending at 3113.   Remember at the 2767 low the week before last, I indicated that this 2767 low is likely the lowest area that will be seen for the rest of the P1-C3 wave headed above 4000.

The new alternate (blue) count is that major [2]-P1-C3 bottomed at 2767.  I’ve been hinting at this very bullish wave count since my call that the 2789 to 2762 area would hold on the last pull-back.   The IWM chart shows a new perfect 50% Fib retracement, typical of major [2] wave.  This first minor wave up is minor 1 of major [3].   Using the 3042 to 3113 target areas for minor 1, the minor 2 wave 50% Fibs are is 2940 to 2904.  Note:  The Major [3]=1.62*[1] target is at 4003.

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


30 Responses to “May 26th, 2020: SP-500 Chart Update”

  1. AnnieO said

    So to be clear you are no longer expecting a pullback at this point with the gap up today?

    • pugsma said

      Since the minor 4 wave call at 2767 two weeks ago, the primary (green) wave count has been looking for the minor 5 of major [1] to move above the 200-day SMA (3000) and reach my target range of 3042 to 3212.

  2. pugsma said

    This May 13th tweet that I made near 2767, continues to be spot on.

    • pugsma said

      Keep in mind this major [1] wave comparison between 2009 and 2020 that I posted on May 13th. The break above the 200-SMA (3000) was expected for minor 5 of major [1].

      This is the important part of the year 2009 Analog tweet today:

      However note that afterwards (the break above the 200-day SMA), the move up stalled 2.5% above the 200-day SMA. That’s at about 3075 for major [1].

      • pugsma said

        Following year 2009 Analog means the upside potential from 3000 is 3075 to complete major [1], +2.5%.

        The downside potential for major [2] is a 30% retrace from at least 3022, which is 2773, -7.5%.

  3. lauter1 said

    Transports ($DJT) looks like it favors the bullish alt blue. Daily chart, leading diagonal with a nice c=a 50% retrace.

  4. pugsma said

    Today a subscriber asked me in a private e-mail about by philosophy on trading versus investing.

    Today’s market action is good real world example of trading versus investing.

    From my Elliott Wave Tutorial in wave time duration:

    PUG Wave Labeling: (Using only 7 of Elliott’s original 9 wave classification)
    Super Cycle: SCI-SCV, SCA-SCC Decades
    Cycle: C1-C5, CA-CC 2 to 10 years
    Primary: P1-P5, PA-PC 1 to 2 years
    Major (Interm): [1]-[5], [A]-[C] Several Months
    Minor: 1-5, A-C 1 to 2 Weeks
    Minute: (1)-(5), (a)-(c) Several Days
    Minuette: i-v, a-b Several Hours

    I trade major, minor and sometimes minute degree waves.

    I invest over Primary and Cycle Degree waves.

    In mid-May we had an excellent trading set-up near the minor 4 low. Last week I went over how I traded the minor 5 wave up from 2767 to 2980. I got the trade result I was looking for exiting at the minute (3) wave high. I’m not concerned about trading the minute (5) of minor 5 wave to its conclusion. I’ll find a much better (lower risk, higher reward) trading set up with patience.

    Now for investing, today’s move continued with the major [1] wave within Primary 1 (P1) of Cycle (C3) bull market. I made the Cycle 2 (C2) low call on the day of March 23rd. It’s documented here at this blog and was published on Twitter that same day. I also told all my friends and family that it was another once in a decade to generation investing opportunity. So everyone has had two months to invest into Primary 1. By my analysis, it’s a 1 to 2 year bull wave to 4000+. What happens day to day within the waves below the Primary wave degree do not affect my investing. Keeping my investing at 90% account value to 10% trading keeps the account smoothly trend following with nice trading bursts of gains (and some losses).

  5. Bill S. said

    An interesting stat about today’s action for NDX. Looked for other days where NDX gapped up by > 1%, the open was the high of the trading day and it closed down for the day. Filtering by only instances above the 200 day MA, only 2 previous historical instances match. 6/21/10 and 10/15/03, in each case it marked a short term top and NDX saw 7-8 trading day pullbacks.

  6. kaneoahu said

    Of interest the Zweig Breadth Thrust indicator has moved from slightly above .40 on May 13 to .63 today so far (still a long way to close). Very impressive breadth move over the last 9 trading days.

    • pugsma said

      Unfortunately it meaningless as a potential Zweig Breadth Thrust (ZTB). The ZBT rules are concrete and the failure to reset below 0.40 at the 2767 minor 4 low spoiled it.

  7. pugsma said

    Yesterday’s high 3021.72
    Today’s high (so far) 3021.72
    Rarely have I seen this.
    It’s possible that today’s high 3021.72 high did complete wave v-(5) of minor 5 of major [1].

  8. pugsma said

    The SP500 just ran the “picket fence” move on the complacent bull traders.

    The bulls got caught “watching” the paint dry.

  9. pugsma said

    There will be A LOT of bears howling about the SP500 “failure at the 200-day SMA (3000)”.

    This will make the next wave 2 low that much of a better set-up.

  10. sef88 said

    can you say more re what you mean picket fence paint dry, do you think we finished wave ?

    • pugsma said

      Yes…my comment from about an hour ago (above).

      “Yesterday’s high 3021.72
      Today’s high (so far) 3021.72
      Rarely have I seen this.
      It’s possible that today’s high 3021.72 high did complete wave v-(5) of minor 5 of major [1].”

  11. pugsma said

    Minute (1) down could be in the books at 2970.

    Looking at minute (2) wave 50%62% Fib at 2996 to 3002.

    Shorting at the 200-day SMA re-test could be a day traders dream.

  12. kazoom1618 said

    OT: Manned SpaceX launch to ISS in 25 minutes (weather pending)

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