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January 8th, 2021: SP-500 Chart Update

Posted by pugsma on January 8, 2021

6:25 pm EST: The SP-500 price gapped up from 3803 to 3815, rose quickly to hit 3824, drifted lower to drop to the days low at 3784 and rallied to a new all-time high of 3827 and closed at 3824.

Market Technical Notes: 

  1. NYMO: The NYMO down at +5.  The NYMO has now closed back above the zero line three days in a row after closing below -20 at -31 last Wed Dec 23rd. Thus the NYMO has cleared the “crash zone” of -20 to zero and confirmed it with two additional closes above zero. This is sign of growing market breadth and “could” lead to a continuation rally on the SP500.
  2. VIX: The VIX closed down -3.6% at 21.56.  Need the VIX to break below 20 to confirm a further melt-up scenario for the SP500.
  3. Chart Pattern:  None.
  4. NYSE A-D Line Cumulative: The A-D line cumulative closed down slightly with the SP-500 closing at new all-time close high today of 3824 vs 3803 on Thursday, Jan 7th. This is a slight negative divergence on the NYSE A-D Line vs SP500, which is a potential top indicator (see below).

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. Within minute (5), wave i ended at 3738, wave ii at 3705 and the wave iii=2.62*i target is 3855. Wave iv-(5) should correct to a 23% Fib at 3821 and then v-(5) will complete from 3896 to 3916. Note: The primary (white/green) count as labeled remains valid above the minute (4) low at 3663, but staying above the 3770 pivot now is important to the continuation rally to 3916.

The alternate (blue) wave is on life support with the 3827 high today, as the minor 1 of major [5]-P5-C1 leading diagonal maximum is 3833. Thus for the alternate (blue) count, we have to assume today’s 3827 high was the end of minor 1 and the minor 2 correction is underway to a 38%/50% Fib retrace at 3602 to 3531 into February. We’ll need to see gap down Monday to get minor 2 started. The NYSE A-D line cumulative negative divergence a the close today, could lead to this scenario. Note: The alternate (blue) count as labeled remains valid below the 3833 high.

Have a great weekend !

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

SP-500 weekly chart:

SP500 Technical Analysis

20 Responses to “January 8th, 2021: SP-500 Chart Update”

  1. pugsma said

    I was away from my computer and charting system all day today doing work outside my house.

    If I was at my computer I would have surely noted on the 15-min chart the dip to 3784 at 1:30pm EST ended precisely at the top of the wedge break-out. That was an awesome ST buy set-up opportunity. Oh well, can’t catch ’em all.

  2. pugsma said

    Cobra has three things arguing for significant top soon (could be a little more up first, primary count):

    1) SP500 extreme of extreme above its 200-day SMA ( Bears ultimate weapon)

    2) SP500 open and closed above its Bollinger band (similar to my large bull bar above BB mentioned yesterday).

    3) NYMO turning down near zero line with new SP500 high (ie very weak market breadth).

  3. RB said

    Steve, the AD line snapshot you posted shows a -0.03% change for Friday but the line now reads a +0.05%. So no divergence?

    Separately, what are your thoughts on the common stock only AD line being a more reliable leading indicator of tops? That one had a divergence Friday. Also back on 9/2 when both regular NYAD and SPX had made a new high simultaneously, the common stock only AD line had already been declining for a couple of weeks.

    • pugsma said

      There are many indicators (as I pointed out calling) for limited gains and a long consolidation to correction period of 4 to 8 weeks.

  4. pugsma said

    This panic/euphoria model looks a little overbought…

    https://twitter.com/vixsquared/status/1347890428826284033?s=21

  5. pugsma said

    Buffett Indicator flashing red…

    https://twitter.com/schuldensuehner/status/1348206434396360705?s=21

  6. pugsma said

    The dip to 3789 at the open back tested the rising wedge break-out a 2nd time.

  7. Anjali Tewari said

    You got your gap down this morning !,

    What should we be watching for to discern between white and blue …

  8. pugsma said

    TWTR is very interesting…I just posted an initial chart on TWTR into the 2021 Custom Chart Archive: https://pugsma.com/custom-chart-archive-2021/

  9. pugsma said

    OK so many subscribers have been asking for me to chart Bitcoin. I just added a chart for GBTC into the 2021 Custom Chart Archive: https://pugsma.com/custom-chart-archive-2021/

  10. pugsma said

    Just a heads up, the SP500 count I showed above on Sunday for a major [3] wave completing here between 3827 and 3900, than a major [4] correction to 3500 area will become the new alternate (blue).

    I’ll stick with the current primary (white/green) minor 3 of major [5] ending between 3827 and 3916. Then a minor 5 correction likely staging above 3650/3700 as the higher probability path.

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