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March 25th, 2021: SP-500 Chart Update

Posted by pugsma on March 25, 2021

5:10 pm EST: The SP-500 gapped down from 3889 to 3879, dipped to 3854 (days low) and rallied to 3920 (days high) and closed at 3910.

Market Technical Notes: 

  1. NYMO: The NYMO closed up near -30 from -51.  Will need to see NYMO closes back above the zero, then above +20 before the minor 3 of major [5] wave higher to be can be confirmed.
  2. VIX: The VIX closed down -6.6% at 19.81.  VIX closes below 20 are indicative of a potential grinding minor 3 of of major [5] wave higher.
  3. Chart PatternPotential Bull Flag between 3985 and 3854 with a target of 4114.
  4. NYSE A-D Line Cumulative: The A-D line turned back up today. The A-D line has been in down-trend since March 15th. Will need to see the A-D make a new all-time high along with the SP-500 to confirm the major 3 of major [5] wave.

Seasonality: Aligns with a minor 2 of major [5] low here are the end of March and big rally for minor 3 of major [5] into the end of May, then a minor 4 pull-back in June and finally another rally for minor 5 of major [5] into August.

SP500 Seasonality

The primary (white/green) wave count is that minor 2 of major [5]-P1-C3 wave completed today at 3854, which was a precise 50% Fibonacci retracement. The minor 3 wave up is just getting started with a target of 1.62*minor at 4277. The major [5]=0.78[1] target for the completion of P1 is at 4535. Note: The primary (white/green) count as labeled remains valid above the 3854 low.

The alternate (blue) wave count is that major [4]-P1-C3 is still on going from the major [3]-P1 top at 3950 in February. Major [4] is playing out as a running flat (minor A-B-C, 3-3-5 wave). The minor B wave completed at 3984 and now the minor C wave will drop to the C=A target of 3761 to complete major [4]. Note: The alternate (blue) wave count remains valid as labeled below 3955.

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

10 Responses to “March 25th, 2021: SP-500 Chart Update”

  1. MS53 said

    Thanks so much Steve for all the xlnt charts and your hard work !!!

  2. pugsma said

    $CPCE actually increased at the close to 0.58 from 0.57.

    That’s potentially more fuel (puts to cover) for equities and the SP500.

  3. henry maddux said

    Thursday’s release of the AAII sentiment survey showed 50.9% bulls versus 28.5% bears. That is the highest
    bullish percentage since early January, and not typically what you expect to see at the end of a scary-feeling dip.
    McClellan report.

    • pugsma said

      Using high bullish sentiment as a topping indicator does not typically work out well. Using high Bearish sentiment as a bottoming indicator is typically effective.

  4. Denali92 said

    The SPX / SPY has had its 3 plus % opex drop, so it definitely could be the low for this correction.

    The Thursday post opex is not the normal time for a post correction low – but it is exactly what happened last September with the bottom on Thursday, Sept 24th after the 22 day correction.

    Since last March, there has been no consistent pattern or rhyme or reason to when the generally brief corrections end.
    -There have been one day ones like the Monday post December opex and the last day of November.
    -There was the sharp two day one last May opex….
    -There was the three day one that ended on the last day of January…
    -There was the seven day one last June that ended on the first day of June opex week….
    -There have also been 16 day (Feb 21), 18 day (Oct 20) and 22 day corrections (Sep 20)

    So yesterday could definitely have been the corrective low. I must admit I was thinking the corrective would likely be next week as there has been weakness during the last few days of the month in June, October, November, January and February…. and early month weakness in January and sort of in March… but I have also been guilty of expecting corrections to last longer than they ever have done since last March…

    A low in March and then an April rally is the historically most likely outcome as only 5 times (Yes, just 5!!!) has the April SPX low been lower than the March low since 1998. The last time was in April 2018 and before that April 2014, April 2005, April 2002 and April 2000….

  5. pugsma said

    OT: This is a bit of fundamental analysis. TLT was down from 157 at Jan 1st to 133 last week. That’s a -15.3% drop in long-term bonds in Q1-2021. Meanwhile the SP500 is up from 3757 to 3984 or +6.0%. 60/40 stock/bond funds and many targeted stock/bonds funds are forced to re-balance here before quarter end. That means buying long-tern bonds and selling stocks.

    Also I saw a report that $175B was added to stocks funds and ETF’s the week before last as the SP500 hit 3984 peak. That’s a historical record. Is it more likely that degree of institution stocks buying is going to be reversed Or is it more likely that the recent stock weakness is a re-balancing?

    We should see a more consistent trend in the market resume after the quarter end.

    • Denali92 said

      Every quarter, there does seem to be a lot of talk about re-balancing leading in to the quarter end, but I have never been able to identify a specific day or set of days when you really see what might appear to be these re-balancing flows. In my mind, the market seems much better to absorb them than a lot of the option related gamma flows.

  6. Denali92 said

    Note: Next week is a strange week from a historical standpoint with quarter end, the 1st of the month – which has generally been VERY STRONG since last March with just Jan 4th, 2021 being weak AND then the employment report occurring when the market is closed for Good Friday…. which last happened in 2015 (bottom on the Wednesday before) and 2012 (H1 2012 TOP on Monday before and a minor bottom on the Tuesday after)

    I have no strong views here other than to say that when these corrective periods do end, the market has always made new highs…. The only recent headfake was at the end of February / early March when it took slightly longer for the SPX to make its corrective low.

    Have a good weekend,

  7. William Waggoner said

    Nice close! It’s been awhile since we’ve seen final hour buying that aggressive.

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