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May 20th, 2021: SP-500 Chart Update

Posted by pugsma on May 20, 2021

6:45 pm EST: The SP-500 gapped up from 4116 to 4121, rallied most of the day to a days high of 4173, and then faded into the close to close at 4159.

The primary (white/green) wave count is that major [4]-P1-C3 ended at 4057 and played out as an expanded flat wave from mid-April to mid-May. This major [4] wave flat alternates with the major [2] zig-zag from June 2020. The major [5] wave up began from 4057 and the major [5]=0.62[1] target is at 4702. The minor 1 wave of major [5] is underway with minute (1) ending at 4183, minute (2) ending at 4061 and now minute (3) headed for the 1.62(1) target of 4265. Minute (4) should retrace to the 23% Fib at 4218 and the minute (5)=(1) target is at 4344 to complete minor 1 of major [5]-P3-C1.  Note: The primary (white/green) wave count remains valid above the major [4] 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 up at -10 from -29 yesterday.  NYMO closes back above the zero line would be bullish and help to confirm the primary (white/green) wave count. 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 down -6.8 % at 20.67. 
  3. NYSE Options Put/Call Ratio $CPC:  The $CPC spiked above 1.00 on the Wednesday, May 19th close. This was a 2nd $CPE spike and we got the 2nd SP500 drop to 4061. This type of 2nd $CPC above 1.00 often establishes an important bottom (see the chart below).
  4. Chart PatternPotential Bullish Double Bottom at 4061 with a target of 4305 on a break above 4183.
  5. NYSE A-D Line Cumulative: The A-D line cumulative peaked with the SP500 close of 4231 on Friday May 7th.

House Keeping: As I have done every year since starting this blog and service in October 2009, I take a break from posting new blog updates on Friday’s during the summer months in Chicago. We only get get about 3 months (June, July, August) of warm summer weather here and I love to be outdoors enjoying them. Beginning with Friday May 21st trough Friday September 3rd, there will not be a Friday blog post.

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

67 Responses to “May 20th, 2021: SP-500 Chart Update”

  1. pugsma said

    I forget which subscriber here really wanted a major [4] wave alternation with the major [2] sharp zig-zag drop last June 2020. Well now you have it with the major [4] wave expanded flat from mid-April to mid-May.

    • pugsma said

      The major [4] wave expanded flat that bought time, not so much price over the past month is such an elegant wave count that it must be correct. 🙂

  2. Anunay Jain said

    So the only difference between green and blue is that for green Major 4 just completed and for blue only A wave of major 4 done? If that’s correct then that’s quite a change from prior count.

    • pugsma said

      Primary (white/green) count has been consistent that 4057 was a key market low for the SP500 that would hold and lead to new all-time highs above 4238. I’ve simply changed the major [4] wave form from a triangle to expanded flat tonight.

      Alternate (blue) count has also been consistent that 4238 to 4057 was only the minor A wave of a deeper major [4] wave pull-back to 3945.

  3. pugsma said

    I know a LOT of analysts keep talking about the year 2010 deep major [4]-P1-C1 correction that occurred in May-July down to the 38% Fib (which would be 3750 area now). And I guilty of discussing it here too and even showing it as the alternate (blue) and alternate red) counts.

    But what’s different in year 2021 vs 2010:

    1. In 2010 the US Fed started to taper QE 1 in Feb-March 2010. That led to the May 2010 sudden drop. However here in year 2021 the Fed is still buying bonds at $120B per month in May 2021 and no hint of changing that anytime soon.

    2. Here in year 2021 The US Govt is pumping fiscal stimulus into the market at a $4T clip into the fall of 2021. Then there’s a $10T infrastructure plan to back that up.

    Hard to get much of market correction with those two conditions.

  4. pugsma said

    Big drop in $CPC tonight.

    • Wayne Curtis said

      So is that a caution sign Steve?

      • pugsma said

        It’s bullish for the $CPC to begin to drop quickly after a big spike above 1.00. You don’t want to see it hang around at a high level, as it could mean a further SP500 drop.

  5. Anunay Jain said

    So comparing the qqq and spx charts. The major 4 for qqq is labelled around 297 and we are in minor 3 of major 5 in qqq. Is there a reason for not making major 4 bottom at spx 3723. That way we would be in minor 3 of major 5 in spx too now? I am assuming that I am reading the labelling right.

    • pugsma said

      Every index or stock can have its unique wave structure. For example the IWM has clearly been in a ascending triable major [4] since February.

      As far as the SP500, IF I make 3723 in March the major [4] low, then the major [3] wave peaked at 3950 in February. That would make major [3] < [1]. Rarely is a wave 3 < 1 and does not normally happen for a major index The QQQ on the other had major [3] > [1] even using the February high at 338.19.

      • pugsma said

        In short, the QQQ (Nasdaq) is leading the markets off the March 2020 low. The QQQ will likely peak first when we get to the Primary 1 (P1) of Cycle 3 (C3) top.

  6. pugsma said

    Those dumb money shorts…lol

    https://twitter.com/yuriymatso/status/1395530206438252548?s=21

    • pugsma said

      Remember Elliott Wave Theory is based foremost upon market psychology and market sentiment.

      The market sentiment has gotten really negative in May. Active money mangers are the most bearish they have been since the March 2020 low. They are mostly in cash or short waiting in a market “crash”.

      Why does the PUG SMA primary wave count typically win out for the past decade? Because I follow closely those two factors and adjust my primary count accordingly. I also use past a present price action to drive the wave counts for the future direction.

  7. pugsma said

    NYMO intra-day near +20 early today. Very bull wave constructive. The close matters…

    • pugsma said

      Also NYSE A-D Line Cumulative is right at the all-time high intra-day with the SP500 well below is it’s all-time high of 4238.

      That’s a bullish leading indicator if it can hold into the close.

  8. pugsma said

    FYI, the move above 4183 invalidated both the alt(blue) and alt(red) counts (for a minor B ending at 4183) as currently labeled on my charts.

    While the the minor B wave could extending higher up to just below 4238, the odds are getting very low that for both the alt(blue) and alt(red) wave counts.

  9. pugsma said

    Also the move above 4183, confirms the double bottom (4057 and 4061) with target of 4305.

  10. pugsma said

    With 4189 hit and the 4188 gap closed, I’d expect some consolidation for most of the rest of today.

  11. Anunay Jain said

    Btw you doing these calculations by hand or this software does it for you? I noticed that you have iii=1.62i = 4218. That should be only around 4165 as i is around 50 points.

  12. pugsma said

    FYI the SP500 4-hr MACD signal line went bull-cross on the yesterday, Thurs 5-20. A close today, Friday 5-21, with a MACD still in bull-cross is confirmation of an intermediate term (several months) trend change in the SP-500.

    • William Waggoner said

      I’m not seeing this on my StockCharts MACD daily with settings at 12,26,9. It still looks like it has a ways to go. If I alter the settings to 3,10,0 the cross is in progress today. What are the MACD settings you are using?

  13. pugsma said

    Bears last stand for minor B of alt(Blue) and alt(red) count was the (c)=(a) move up from 4057 to 4183 for (a), the drop from 4182 to 4061 for (b) and then the move up from 4061 to 4189 (c).

  14. Denali92 said

    I have been waiting (hoping???) for an opex edge this week to comment on….. but there is none…

    We have an inside week for opex week – same as in January 2021 (MAJOR Bottom on Opex Friday). There is no longer an edge to inside weeks for opex week.

    This week we have repeated the same pattern that I highlighted last week – which is weakness in the beginning / middle of the week and strength at the end of the week. The last two weeks have seen Wednesday lows. Oddly for opex week, Wednesday is the least likely day for a low (just 10% of opex weeks have Wednesday lows). The last opex week that had a Wednesday low for the week was March 2020 and before that September 2019 and August 2018. It just does not occur that often.

    Other than following recent history and buying all dips when the market is hourly oversold, there really is no edge from my work. I will remain quiet until I see something that is compelling.

    Have a good weekend!

    -D

  15. pugsma said

    Bears absolutely had to defend the 4191 pivot breakout and so far today they have been successful.

    Intra-day NYMO back below zero line and NYSE A-D Line well below the all-high. Only the close on these two key indicators matters.

    • pugsma said

      It would be too easy for Ms Market to give the “all clear” bullish confirmation today of the NYMO closing above +20 and the NYSE A-Line Cumulative at a new all-time high.

      Ms Market will like keep both bulls and bears off balance into next week.

      • MS53 said

        and now there’s potential double top 4183-4188 targeting the blue count [4] target ?

        • pugsma said

          Yes. As I stated earlier today’s high at 4189 completed a perfect minute (c) = (a) to complete minor B or alt (blue) and alt (red).

          • Wayne Curtis said

            Wasn’t clearing
            4183 confirmation?

          • pugsma said

            No. Clearing 4283 was only step 1 for primary count validation. 4238 must be cleared to invalidate alt (blue) and alt(red).

            You can read this in my May 20th SP500 wave count text above.

        • pugsma said

          Next week has a potential to be big up (150+) or down (-200) week. Should be exciting…

          • pugsma said

            Place your “chips” on PUG primary (white/green) or Cobra (red/blue).

          • Jim Guthery said

            I have scared chips on the sidelines. I still think 4% pullback too shallow, but I am also not a master charter either. The good thing is my growth stocks are not on a run-away train either, so no FOMO kicking in yet.

          • Robert Swaim said

            Should be and made good money the last several days, but am on the sidelines till we have some clarity. Again, it’s easier to get past lost opportunity than lost money.

          • pugsma said

            I agree 100%.

  16. pugsma said

    In the bullish, positive ledger today is the VIX red with a red SP500.

  17. pugsma said

    What I’ll be ready interested in seeing is where the $CPC closed tonight.

    If the $CPC spikes again at the close today, it will mean traders went into weekend heavily short.

  18. sk001 said

    Not an easy market to trade for sure

  19. pugsma said

    I have to give Cobra some props here as he predicted a higher high than 4183 this week BEFORE a big drop below 4057. So he got that first part right.

    • pugsma said

      NYMO back above zero line and A-D nearing an all-time high.

      A strong close for the indices in the final hour could get these primary (white/green) key indicators to the require confirmation levels.

  20. pugsma said

    VIX getting crushed down -5% to 19.60.

    That’s very bullish.

  21. pugsma said

    Horrible index close with NYMO back below zero line.

    Nothing resolved this week.

    Enjoy the weekend!

  22. pugsma said

    NYMO opens above +20 (Extremely Bullish for new highs above 4238)

    NYSE A-D Line Cumulative opens at new all-time high (Extremely Bullish for new highs above 4238)

    Close matters…

    • pugsma said

      Primary (white/green) green count headed above 4238 to 4300+ looking good early today. Close matters on all key indicators (NYMO, A-D Line, $CPC).

  23. pugsma said

    Subscribers who have been with me since near the beginning in October 2009 know that these “Giddy Up!” market calls are extremely rare from me. I make them when I believe the indicators are pointing to a new all-time high is likely coming soon.

    This latest “Giddy Up!” call was made on the morning of Thursday, May 20th with the SP-500 trading below 4150.

    Pugsma said
    May 20, 2021 at 10:46 am e
    Giddy Up!

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