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April 8th, 2021: SP-500, IMW and QQQ Chart Update

Posted by pugsma on April 8, 2021

11:40 am EST: The SP-500 price is nearing the bull flag target of 4114 and is becoming extremely stretched above it’s key moving averages. AAII Bullish Sentiment is stretched to historical levels are nearly 3 to 1 (Bulls to Bears). A pull-back of some degree is likely soon. For the primary (white/green) wave count it will only be a minute (4) of minor 3 of major [5]-P1-C3 pull-back and minor 3 will climb much higher to at the minor 3=1.62*minor 1 target of 4277. For the alternate (blue) wave count it will be minute (4) of major [3]-P1-C3 pull-back, the final pull-back before the major [3]-P1-C3 peak at 4114 to 4145 and significant major [4] correction to at least the 23% Fib at 3874. Remember that ultimately the alternate (blue) count is more bullish that the primary (white/green) wave count, as it will allow P1-C3 to climb higher into year 2022.

It’s still possible that years 2009-2011 scenario could play out here with a major [3]-P1-C3 top at the 4114 to 4145 area (see comparison below) then a significant major [4] correction to at least the 23% Fib at 3874 into June (alt blue count). The significant weakness in the IWM vs SP500/QQQ could be a early warning sign.

House Keeping: I’m headed out of town for a long weekend. The next blog post will be Monday, April 12th.

Years 2009-2011 to 2020-2022 Comparison:

SP-500 15-min chart:

SP500 Technical Analysis

SP-500 60-min chart:

SP500 Technical Analysis

SP-500 daily chart:

SP500 Technical Analysis

IWM 15-min chart:

IWM Technical Analysis

IWM 60-min chart:

IWM Technical Analysis

IWM daily chart:

IWM Technical Analysis

QQQ 15-min chart:

QQQ Technical Analysis

QQQ 60-min chart:

QQQ Technical Analysis

QQQ daily chart:

QQQ Technical Analysis

19 Responses to “April 8th, 2021: SP-500, IMW and QQQ Chart Update”

  1. pugsma said

    I don’t usually follow the $CPCI (Put/Call index only) but this is interesting….

    https://twitter.com/hmeisler/status/1380481475775184900?s=21

  2. pugsma said

    $SPX Daily RSI(5) near 90 has ushered in two large corrections since the March 2020 Cycle 2 low. This indicator leans toward alt(blue) count major [3] top soon and then major [4] correction.

    Be careful picking up pennies in front of a steam roller.

    https://pugsma.com/wp-content/uploads/2021/04/img_9728.jpg

  3. Denali92 said

    Pre April opex period post

    Right now, there is no edge going in to the April opex period. It seems like the lower Vix has now created that grinding move higher that Pug was predicting.

    With the SPX likely to close at the highs or near the highs for the week, the Cobra stats indicate a higher high next week is very likely.

    The SPX is also likely to close at or above both the upper daily and weekly bollo bands. This indicates a strong market and there is no bearish edge. The last two times the SPY closed above the upper weekly bollo band on the week prior to opex week, the market continued to rally with just a small pullback (Nov 2019) or no pullback at all, but a more significant top later in the month. (Jan 2018)

    • BUT, in January 2021, when the SPX did close above the upper daily bollo band on the Friday before opex week, that high did hold until the post opex rally that started after the SPX traded to the 20 day MA on Opex Friday.

    Per my March opex note, the SPX / SPY has continued to have opex period turns of at least 3% for every opex week since January 2020 with the exception of last August (rally continuation). These 3 plus % turns have both been tops (March 21, February 21, October 20, September 20) and bottoms (January 21, December 21, November 20, June 20, etc…)

    In more than a few opex periods lately, the high of the week has come earlier than normal. Friday is almost twice as likely to be the high of opex week than any other day, but in March and September 2020 it was on opex Wednesday, in February it was on opex Tuesday post holiday, in January it was opex Thursday and in October and November, the high of the week was on Opex Monday. In the last 7 opex periods, only December had an opex Friday high for the week.

    This could mean an early sell off with the SPX then getting oversold and then a bottom and a rally to new highs post opex. (note: The initial pullback does not need to be 3%. There can be a sharp pullback during opex that then produces a bottom and a strong rally – we have seen this scenario quite frequently lately in January 2021, December 2020, November 2020, July 2020, May 2020 and April 2020)
    • I am not predicting this. It is just a possible scenario that would create that 3 plus % opex period turn.

    Last April, there was a sharp sell off from the Thursday before opex in to Opex Monday and then SPX had an even sharper Opex Monday to Opex Friday rally of 5.9%.

    Bottom line:
    • Right now, there is no opex period edge or really any historical edge.
    • The best scenario for having an opex week edge is an early week high followed by a pullback in to a late opex week low or a low post opex, which would then set up for a further rally in to late April. This is actually the scenario that used to occur quite frequently for April opex (2008, 2009, 2011, 2012, 2013 and 2015), but since then the April opex period has been more mixed.
    • The next Fed meeting is April 27th – 28th and the market does tend to rally in to the Fed meetings.
    • Lastly, it should be noted that April opex has never made a super long lasting top. The only MAJOR reasonably long lasting April tops that have occurred since 1998 was the early month one in 2012 and the late month one in 2010.

    I will be back next week, if and when I spot a potential opex period edge.

    Have a good weekend,

    -D

    • pugsma said

      April 2010 significant top is the key parallel to watch here as it aligns perfectly with the 83% rally off the March 2009 SC-IV low of 667 and the 88% rally of the C2 low of 2192 now. Both rallies are the largest one year rallies in the history of the US stock market.

      • Denali92 said

        It is an analog that does make a lot of sense. The April 2010 top was the Monday before the Fed meeting.

        The month of May has also produced quite a few more substantive tops, including the first trading day of May in 2011 and the post opex high in 2015 – both of those were the highs for the year.

        Enjoy your long weekend!

        -D

        • pugsma said

          I’m happy with my long position gains for 2020 through 2021. Now it’s time to top tick the short position for what could be major [3]-P1 or then end major [5]-P1.

  4. pugsma said

    FYI I just closed all ST (trades), IT (swings) and LT positions (from C2 low at 2192).

    • orion.colorado said

      Thanks for the update.

      Hope you are feeling better. I’ve been scaling out of positions from that timeframe since we crossed 4000.

      Cash is a position, too after all.

      • pugsma said

        Yes feeling better after two days. Hoping the 2nd Moderna dose doesn’t cause as much reaction since I already had Covid and the first dose produced such a strong reaction.

        Time to stay of the major indices for several month for me. I likely also won’t trade much this spring and summer. Happy to to up this year well hind the SP500 as I correctly trade most of the oscillations this winter.

        • pugsma said

          I might even go short any higher high next week on the SP500 and/or long volatility. I’ll just rest on my cash hoard for the weekend and think about it.

    • CornHusker said

      Are you having any second thoughts about closing out all your positions? Thanks.

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