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December 29th, 2020: SP-500 Chart Update

Posted by pugsma on December 29, 2020

4:50 pm EST: The SP-500 price gapped up from 3735 to 3750, quickly hit a new all-time high at 3756, then fell all day to close near the low (3723) at 3727.

Market Technical Notes: 

  1. NYMO: The NYMO down below -20 from -5 area on Mon Dec 28th.  The NYMO never closed back above the zero line after closing below -20 at -31 last Wed Dec 23rd. Thus the NYMO has failed to clear the “crash zone” of -20 to zero. This is sign of weak market breadth and could lead a significant SP500 correction.
  2. VIX: The VIX closed up +6.4% at 23.08.  Note, the VIX trend has been higher since early December as the SP500 price rose. This is positive divergence on the VIX wrt to the SP500 and is a negative for the SP500.
  3. Chart Pattern:  Potential bullish consolidation rectangle from 3633 to 3712 (79 points). A break above 3712, leads to a bullish target is 3712 + (3712-3633) = 3791 (so far has reached 3756).
  4. NYSE A-D Line Cumulative: The A-D line cumulative closed significantly lower today as the SP500 set an intra-day new all-time high at 3756.   There likely wont be a significant top in the SP-500 without a negative divergence on the A-D line vs the SP-500 price and it this could now be developing.

The primary (white/green) wave count is that the minor 3 or major [5]-P1-C3 wave up is underway that should target 3916, where minor 3 =2.0*minor 1. Wave minute (1) of minor 3 completed at 3646 and wave minute (2) at 3512. Wave minute (3) up underway with (3)=0.78(1) target at 3833. Within minute (3), wave i ended at 3629, wave ii ended at 3544, wave iii ended at 3712, where iii=1.62*i and wave iv ended at 3637. Wave v-(3) is underway, where v=1.62*i at 3827.  The major [5]=[1] target is 3972 to complete P1-C3. Note: The primary (white/green) count as labeled remains valid above the wave iv-(3) low at 3633.

The slightly less probable (than the primary) alternate (blue) wave outcome is that the the major [5] wave will extend to at least 1.62*[1]. Wave major [3] at 821 points was only slightly longer (1.08) than major [1] at 763 points. Often when major [3] is weak, the major [5] wave will extend. The major [5]=1.62[1] extension target is at 4445. In this scenario, this first wave up from the major [4] low at 3234 to 3727 thus far is only a minor 1 wave as a leading diagonal. Minor 1 could have ended at 3756, where (5)=0.62(3) or could target minute (5)=0.78(1) at 3793 (LD max 3833). The minor 2 correction should drop to a 38%/50% Fib retrace at 3558 to 3495 into mid-January. From there, the minor 3 = 1.62*minor 1 target is at 4443 into late year 2021.

The must less likely alternate (red) wave count scenario is major [5]-P1-C1 could have ended at 3756, where minor 5=0.62*minor or could target 3793, where minor 5=0.78*minor 1 (ED max 3833) as an ending diagonal. From the P1 top, there should then be a significant P2 correction to at least a 38%/50% Fib retrace at 3183/2992. Note: It will take a break below the 3501 pivot to make this alternate (red) wave count more likely and a break below 3234 to confirm it.

Housing Keeping:  1) If you are planning to remain with the service for year 2021 buy have not yet made a payment, then you should have an e-mail from Tues, Dec 29th, with the details and instructions for how to sign-up. The old monthly password system is being discontinued and you will have a membership account with the blog for year 2021 that will provide you access to the premium service and custom chart service. To become a paid 2021 member you MUST purchase and register via the PUG SMA Shop https://pugsma.com/shop/

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

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