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January 7th, 2021: SP-500, QQQ, and IWM 60-min SP-500 Chart Updates

Posted by pugsma on January 7, 2021

11:30 am EST: With the US equity markets continuing in melt-up mode, I decided today to show a comparison of the SP500, QQQ and IWM wave counts on the 60-min charts. The primary (white/green) wave count of a minor 3 of major [5]-P1-C3 wave has been spot on since the late October and this continues to be the most likely path going forward. The alternate (blue) wave count for the SP-500 is close to be eliminated on a move above 3833 (so far today the high is 3811).

The SP-500 is close to an invalidation point for the alternate (blue) leading diagonal minor 1 wave, which is 3833. Above 3833, the minor 3 wave melt-up continues to at least 3916 is underway per the primary (white/green) wave count.

SP-500 60-min chart:

SP500 Technical Analysis

The QQQ is leading diagonal alternate (blue) count for minor 1 is at 326.07, so it has a lot more room to run higher than the SP-500 leading diagonal. Thus to bring QQQ alternate (blue) count inline with the SP-500, it is possible the QQQ alternate (blue) count already topped at 315.29 or could make one more push up to 318.03. The QQQ primary (white/green) is continued minor 3 melt-up to 327.48, where minor = 1.62*minor 1.

QQQ 60-min chart:

QQQ Technical Analysis

IWM is a bull beast and is show very little signs of slowing down. The primary (white/green) wave count is calling for a move up to the minor 3 = 3.0*minor 1 target at 217.45. Alternatively (blue) the minor 3 wave could stop at more standard minor 3 = 2.62*minor 1 at 209.08.

IWM 60-min chart:

IWM Technical Analylsis

38 Responses to “January 7th, 2021: SP-500, QQQ, and IWM 60-min SP-500 Chart Updates”

  1. pugsma said

    That’s it for me for today.

    Going to take a some time away from the screens after lot of screen time the first 4 days of the new year.

  2. Denali92 said

    IWM / RUT is a beyond unbelievable move. Once it hit ESCAPE velocity in the 2nd of its 8 weeks above the upper weekly bollo, it has been unstoppable….

    PUG is the only person that I saw projecting higher and higher targets….. The Stocktwits stream was filled with non believers…. Must admit that I have been skeptical too as I thought it was following the post 2016 election pattern – which meant it stalled for 4 plus months in 2017.

    Thankfully, once you acknowledge the market’s persistence, you just need to figure out which index is going to be the most persistent. Since September 24th, it has been the MID and the RUT, which took over from the SPX and NDX which led July and August’s persistent move. I am not sure why they took the torch for the market, but they certainly have been the leaders.

    -D

  3. pugsma said

    FYI just so everyone is prepared, there is Uber bullish variant of the alternate(blue) that will take over for the current alternate (blue) and may even become my primary wave count IF 3833 is broken above.

    That is that the move from 3727 to 3637 to 3770 to 3663 was a running flat wave for minor 2 of major [5]-P1-C3.

    Thus this move up from 3663 to 3810 is just the beginning of minor 3 of major [5].

    Minor 3 = 1.62 * minor 1 at 4435.

    Let’s Go!

  4. PETER LABON said

    Any thoughts on the fact that W.[5] green in IWM is so large for a fifth wave compared to what came before? Is there a more bullish interpretation for IWM? Thanks

    • pugsma said

      IWM is just like SP500 in that major [3] was only slightly larger (1.1) than major [1]. Thus the major [5] wave will often extend to at least 1.62 times major [1] and sometimes 2.62 times [1].

      • pugsma said

        The Elliott Wave Theory concept I play here is that abnormally weak wave 3’s often lead to very strong extended wave 5’s.

      • PETER LABON said

        Thanks, that makes sense. To take it a step further, in these types of waves (wave 3 slightly bigger than wave 1, and wave 5 possibly quite a lot bigger), are there any conclusions we can make about the correction that follows the 5th wave? For example, in terms of price or time being unusually large or small?

        • pugsma said

          No. But I’ve said this many times here, I don’t expect that P2 wave to be more than a 38% Fib of P1. In 2010, P2 was only a 30% retrace of P1.

  5. Wildmarkets said

    There was an error in the aaii sentiment survey. They corrected it. Numbers are January 6: Bullish 54.0% Neutral 19.4% Bearish 26.6%.

    • pugsma said

      That’s a pretty big change. Surprised they would release with such a mistake, but at least they corrected it:

      Reported Date Bullish Neutral Bearish
      January 6: 54.0% 19.4% 26.6%
      December 30: 46.1% 27.1% 26.8%
      December 23: 43.6% 34.4% 22.0%
      December 16: 43.4% 30.3% 26.3%
      December 9: 48.1% 25.1% 26.9%
      December 2: 49.1% 28.3% 22.7%
      November 25: 47.3% 25.3% 27.5%
      November 18: 44.4% 29.3% 26.4%
      November 11: 55.8% 19.3% 24.9%
      November 4: 38.0% 30.6% 31.5%
      October 28: 35.3% 29.4% 35.3%

  6. pugsma said

    Critical day here for the SP500.

    Above 3833 the alternate (blue) wave counting leading diagonal is eliminate and the primary (white/green) minor 3 wave marches on to the 3916 target.

  7. pugsma said

    FYI all the alt (blue) count targets have been hit:

    SP500 3814
    QQQ 318
    IWM 209

  8. pugsma said

    Good SP500 TA chart here from Andrew Thrasher.

    Shows that SP500 gains likely capped for a few weeks and a pull-back is probable.

    https://twitter.com/andrewthrasher/status/1347183740099960832?s=21

    • pugsma said

      This agrees with SP500 larger bull bar above the daily BB study from yesterday, showing gains will be capped and the SP500 will either drop or trade sideways.

      • pugsma said

        So here how this gains capped agrees with either wave count

        Primary; break above 3833 to complete minor 3 somewhere below 3929. Then consolidate sideways in a minor 4 for several weeks to a month.

        Alt(blue): complete minor 1 leading diagonal below 3833 then drop big in a minor 2 wave.

  9. RB said

    At current levels
    SPX 2nd day above daily BB
    IWM 3rd day above daily BB

  10. Ralf Engel said

    what Level spx is needed for invalidation the white/green count?

  11. pugsma said

    Something interesting brewing into to the close today. I mention it IF we get it.

  12. William Waggoner said

    Looks like $NYMO will avoid falling back into the crash zone today.

    • pugsma said

      The NYMO -20 to 0 “crash zone” is ONLY in play on a drop below -20 and attempt to close above it. I keep trying to teach everyone this.

      So no this is not the key indicator I’m watching at the close

  13. WaterRock said

    Hmmm, SPX & QQQ close at highs but IWM did not. Look forward to tonight’s update!

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