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January 5th, 2021: SP-500 Technical Analysis

Posted by pugsma on January 5, 2021

4:35 pm EST: The SP-500 price opened flat from 3701, dipped to the days low at 3697, then rose steadily to the days high at 3738 and faded a little into the closed to end at 3727.

Market Technical Notes: 

  1. NYMO: The NYMO closed up near -5.  The NYMO has not 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 to a significant SP500 correction, if the NYMO can’t close above zero soon. A NYMO close above the zero line will signal the next sustained wave up.
  2. VIX: The VIX closed down -6.0% at 25.34.  1st Note: The VIX closed above its upper on Mon, Jan 4th and back below it today Tues Jan 5th. This is VIX Sell, SP500 Buy signal confirmation. 2nd 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. Need the VIX to break below 20 to confirm a melt-up SP500 scenario.
  3. Chart Pattern:  None.
  4. NYSE A-D Line Cumulative: The A-D line cumulative closed at a new all-time closing high today Jan 5th with the SP500 closing at 3727, well below the Dec 31st closing high at 3757. This indicator means that the SP-500 should soon close above the 3757 close.  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 to a target at major [5]=[1] 3972. Minor 3 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 competed at 3770, where (3)=0.62(1) target at 3767.  The minute (4) wave low was at 3663, just below the 38% Fib at 3672. The minute (5) of minor 3 up to new all-time highs should be underway  Note: The primary (white/green) count as labeled remains valid for minute (4) above the minute (1) high at 3646.

The alternate (blue) wave slight less likely outcome is more intermediate-term bullish than the primary (white/green) count and is that the the major [5] wave will extend to at least 1.62*[1] = 4445. In this scenario, this first wave up from the major [4] low at 3234 to 3770 is only a minor 1 wave as a leading diagonal (max 3833). The minor 2 correction is underway and should drop to a 38%/50% Fib retrace at 3566 to 3502 into mid-January. From there, the minor 3 = 1.62*minor 1 target is at 4434 into late year 2021. Note: The alternate (blue) count as labeled remains valid below the 3770 high.

The much less likely alternate (red) wave count scenario is major [5]-P1-C1 could have ended at 3770, where minor 5=0.62*minor as an ending diagonal (max 3833). From the P1 top, there should then be a significant P2 correction to at least a 38%/50% Fib retrace at 3170/2981. 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.

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

SP-500 daily chart:

SP500 Technical Analysis

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