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January 28th, 2021: SP-500 Technical Analysis

Posted by pugsma on January 28, 2021

5:30 pm EST: The SP-500 price gapped up from 3751 to 3755, rallied to the days high 3831, fell to 3785 (days low) and closed at 3787.

Market Technical Notes: 

  1. NYMO: The NYMO closed up near -40.  The NYMO has struggled to re-gain and hold above the zero line and hasn’t close above +20, since the dip to -32 before Christmas.  This NYMO behavior is bearish and opens the door for a larger SP500 drop (we saw that today). Now the NYMO closed (-64) well below its lower BB (-44) on Wed Jan 27th setting up a SP500 Buy Trigger. The NYMO must close back above the lower BB to confirm.
  2. VIX: The VIX closed down -18.81% at 30.21. The VIX has been slowly creeping higher since early December as the SP500 has slowly climbed higher, which is bearish positive divergence on the VIX vs SP500 price (remember the VIX vs SP500 behavior is inverted). Now the VIX has closed well above its upper BB (30.60) on Wed, Jan 27th setting up a SP500 Buy Trigger. The VIX closed back below the upper BB on Thurs Jan 28th to confirm.
  3. Chart Pattern
  4. NYSE A-D Line Cumulative: The A-D line cumulative closed at a new all-time high today Wed, Jan 20th with the SP500 closing at 3852 all-time high. However on Thurs, Jan 21st the SP500 closed at a higher all-time closing high of 3853, with the A-D line cumulative closing much lower set-up up a required negative divergence for a market top. Since last Thurs, Jan 21st, the A-D Cumulative has continued to fall lower.

Seasonality:

  1. After the end of January, the 4-year Presidential Cycle Seasonality is Negative for February and March.

Years 2009-2010 to Years 2020-2021 Comparison:

The primary (white/green) wave count is that the minor 3 or major [5]-P1-C3 wave completed at 3827. The minor 4 wave has played out as an expanded flat wave: minute (a) of minor 4 was the drop from 3827 to 3570, minute (b) of minor 4 was the rise from 3570 to 3871 and the minute (c) wave completed at 3732, near the 23% Fib of 3725. The minor 5 of major [5] wave up should target major [5]=[1] at 3972 . Note: The primary (white/green) count for the minor 5 wave up as labeled remains valid above the minor 4 low at 3732.

The alternate (blue) wave count is that minute (5) of minor 5 of major [3]-P1-C3 wave is completed at 3871 as an ending diagonal. The major [4] down is underway and should target the 23%/38% Fibs at 3617/3451. The minor A of major [4] wave completed at 3732. The minor B wave up hit 3831, between the 62% Fib of 3818 and the 78% Fib at 3840. From there the minor C wave should drop below 3732 toward the final major [4] target of C=A at 3606. Once major [4] completes, the major [5]=[1] wave targets are 4214/4380. Note: the alternate (blue) count is valid below the 3871 high.

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

29 Responses to “January 28th, 2021: SP-500 Technical Analysis”

  1. pugsma said

    Lowest Bullish Weekly Sentiment since Oct 28th, 2020 when this rally from 3234 began.

    That’s not bearish!

    Reported Date Bullish Neutral Bearish
    January 27: 37.7% 24.0% 38.3%
    January 20: 42.5% 23.0% 34.5%
    January 6: 45.2% 23.1% 31.7%
    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%

  2. pugsma said

    The NYMO did close back inside its lower BB at -39 vs -46, confirming its SP500 Buy signal.

  3. Michael Croghan said

    Thank you so much Steve for your hard work.

  4. Anjali Tewari said

    So at this point – looks like it do or die for blue count … if it breaks 3725 then will that confirm the blue count ?

  5. pugsma said

    Just just updated GBTC (Bitcoin Proxy) for the 2021 Custom Chart Archive subscribers.

  6. pugsma said

    On the SP500, the drop form 3831 to 3742 was a 88% Fib retracement.

  7. pugsma said

    Also, a red VIX closed today would be double confirmation of the VIX Sell, SP500 Buy signal

  8. pugsma said

    Something potential very interesting and potentially very bullish for the SP500 is developing.

    Any close today with the SP500 below 3751 and the NYMO above -64 sets up a +DIV on the NYMO below the highly oversold area of -40. That can be a powerful SP500 Buy setup.

  9. pugsma said

    A simple minor 4 wave, minute (a)-(b)-(c), where (c)=(a) at 3692 was just hit.

    • pugsma said

      Also holding above the wave 4 of previous degree, in this case wave minute (4) if minor 3 at 3663, is a very typical for a minor 4 target.

  10. pugsma said

    AAPL near its rising 50-day of 128 and FB at its rising 200-day 153.

  11. pugsma said

    Remember that this wave 4 pull-back is the final good opportunity of year 2021 on route to 4000 to 4300.

  12. pugsma said

    I just updated charts for both PLTR and MSFT in the 2021 Custom Chart Archive

  13. Denali92 said

    PUG has made some good points on the potential bottom here. There are definitely two ways to look at the bottom potential.

    1) All corrections since the March 23rd bottom have been reasonably short and since November every large down day has resulted in a strong bounce the next day and other than this week, that big down day has seen the market head higher the next day.
    • The SPX corrections since March have only seen the SPX trade below the lower bollo band in two instances. The September correction for one day (though it was not quite the final low) and the October correction for three days.
    • The SPX has traded at the lower bollo today, so that could be the end of the correction or close to it.
    • The January 2020 correction just had a trade down to the lower bollo on the last day of the month before heading higher in February to those significant Feb opex highs. The current price action also has quite a few similarities to the Jan 2020 corrective price action. On 31-Jan-2020, the SPX was down almost 60pts and 1.8% It gapped up and WENT on Monday, 3-Feb-2020. (The January 2020 and January 2021 monthly candles are remarkably similar)

    2) On the other hand, the shortest correction since March was the 7 day 8.2% correction in June.
    • The other two corrections were September’s 22 day 10.9% correction and October’s 18 days 8.9% correction.
    • Additionally, today triggered the lower bollo study that I published in September. It did not prove accurate back then, but after 60 trading days above the lower bollo, it generally takes multiple days of trading below the lower bollo for the SPX to form a bottom. (emphasis on the generally!)
    • The shortest January correction since 2009 was the 9 day one in 2020 that bottomed at the lower daily bollo and the longest was the 17 day one in 2010 that saw a 9.2% correction and an 88% retrace of the November to January rally.
    • Lastly, when the market is persistent, especially as the RUT has been, the market has a tendency to correct to the 20 week MA, which is near 3580 on the SPX right now.

    PUG has had a great feel for the market and his Tick Tock warnings have been spot on.

    From a historical perspective that takes in to account the January price action since 2009, one would expect this current correction to last certainly in to next week and possibly till as late as Thursday, February 11th and the SPX should trade below the lower daily bollo band for a few days as well as target the 20 week MA.

    BUT, per the first point, every pullback of this market since the October bottom has been bought quickly and aggressively, so I would not be at all surprised if the same thing occurred with this pullback. I also should note that the market has not followed the historical patterns all that closely since last March and when the markets are persistent, the corrections are shorter and shallower than history would predict.

    For me, the biggest question is concerning sentiment. Has the fall since Tuesday been enough to re-set sentiment or is more time and lower prices needed like in September and October to provide the appropriate sentiment re-set?

    As always, the historian in me is more cautious, even if I am well aware that this market has not followed the historical bottoming patterns all that well since the March low, save the pre election bottom.

    If relevant, I will be back on Monday with a full run down of the 7 January corrections since 1998.

    Have a good weekend,

    -D

  14. pugsma said

    At the close, the VIX closed above its upper BB and the NYMO below its lower BB. Both of those SP500 Buy triggers have been reset.

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