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May 19th, 2021: SP-500 Chart Update

Posted by pugsma on May 19, 2021

6:35 pm EST: The SP-500 gapped down from 4127 to 4098, dropped to a days low of 4061 and rallied to close at 4116.

The primary (white/green) wave count is that major [4]-P1-C3 has been playing out as a triangle since the 4238 major [3] high. The initial drop to 4057 was the minor A wave and the rally to 4183 was the minor B wave. Today’s drop to 4061 ended the minor C wave. Minor D should reach the 4137 and minor E should hold above the 4086 pivot to complete the major [4] triangle. The major [5]=0.62[1] target is at 4702.  Note: The primary (white/green) wave count remains valid above the minor A low at 4057.

The alternate (blue) count is that major [3]-P1-C3 topped at 4238, where [3]=1.23[1]. What’s been underway since is the major [4] wave pull-back to the 23% Fib target of 3945. For the major [4] move to the 23% Fib of 3945, the drop from 4238 to 4057 is the minor A wave of major [4]. The minor B wave completed between the 62%/78% Fib of 4169/4198 and 4183. The minor C wave drop to the major [4] 23% Fib target of 3945 is underway. From the major [4] low, there should be one more push up from major [5] to at least the major [5]=0.62[1] targets 4590. Note: Breaking above the 4183 then 4238 level invalidates the alternate (blue) count and confirms the primary (white/green) count.

The alternate (red) count is that P1-C3 topped at 4238. near where [5]=0.5[1]. The P2-C3 wave should retrace to at least the 23% Fib target at 3767. Note: This P2 wave lower will take several months (late summer to early fall) and is just getting underway.

Market Technical Notes: 

  1. NYMO: The NYMO closed down at -29 from -15 yesterday. The NYMO has thus far failed close back above the zero line, opening the door for the NYMO Based “SP500 Crash Signal” where the NYMO closes below -40 (closed at -66 last week) then fails to close above the back above zero line.
  2. VIX: The VIX closed up +3.9 % at 22.18.  Last week the VIX closed up > +40% in 2 consecutive days last week when the SP500 closed down at 4063. Since the year 2009, when this magnitude of VIX surge occurred, 20 of 20 times (100%) the SP500 made a lower closing low (i.e. below 4063) when a week or two (notethis is Cobra Market View Stat.)
  3. NYSE Options Put/Call Ratio $CPC:  In the category of somewhat concerning (for a 2nd SP500 drop) is the fact the the $CPC (Put/Call Ratio) is hanging around at an elevated level AFTER the big $CPC spike last week along with the big SP500 drop. Often times if the $CPC remains elevated, it means that the SP500 could suffer a 2nd drop like in June 2020, Sept 2020, Oct 2020 and March 2021 (see the chart below).
  4. Chart PatternPotential Bullish Triangle or Potential Bearish Head and Shoulders Top.
  5. NYSE A-D Line Cumulative: The A-D line cumulative peaked with the SP500 close of 4231 on Friday May 7th.

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

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