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June 16th, 2021: SP-500 Chart Update

Posted by pugsma on June 16, 2021

6:05 pm EST: The SP-500 opened up from 4246 to 4252, traded sideways, then dropped to 4202 (days low), and closed at 4224.

The primary (white/green) wave count is that minor 3 of major [5]-P1-C3 completed at 4257, just below the typical minor 3=1.62*minor 1 target of 4256. The minor 4 wave should retrace to at least the 23%/38% Fib at 4212/4183 and may have completed today at 4202.  Once minor 4 wave ends, the final minor 5 wave will head for the minor 5=1 target of 4309/4328 to complete major [5]-P1-C3.  Note: The primary (white/green) wave count as labeled remains valid above the minor 1 high of 4183.

The new alternate (blue) is that the minor 5 wave of major [5]-P1-C3 completed at 4257. The Primary 2 (P2) wave lower to at least the 23%/38% Fib retrace of all of P1 at 3820/3503 is just getting underway.  Note: The alternate (blue) wave count as labeled remains valid below the 4257 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

19 Responses to “June 16th, 2021: SP-500 Chart Update”

  1. pugsma said

    House Keeping: I will out of town all day tomorrow into the late evening helping my oldest son move. No blog post Thursday June 17th. I will try to post at least a brief update on Friday, June 17th.

  2. pugsma said

    Looks like the SP500 primary (white/green) minor 4 wave held above the minor 1 high of 4183, hitting a 4196 low today,

    A break below 4183 would confirm the alt(blue) P1-C3 top at 4257.

  3. pugsma said

    Looks like the Fed crushed the inflation trade signaling they’ll start to talk about reducing the $120B/month QE later this year and could begin to raise interest rates in late 2022.

    This tells me P2 wave is going to be shallow, as the Fed is on top of its game!

  4. Humberto Martinho said

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    Humberto.

  5. pugsma said

    Just an early heads up here, IF 4183 is taken out then I’ll likely revise the primary (white/green) count to be that this drop from 4257 is a wave (2) of minor 3 of major [5]-P1-C3. The 50%/62% Fib retrace of the minute (1) wave from 4061 to 4257 is at 4159/4135.

    P1-C3 could still run for two years into May 2022 as it did in P1-C1 from March 2009 to May 2011.

    The Fed has done of good job of Telegraphing the QE tamper (late 2021) and rising rate (late 2022) to fight inflation. This could let the P1 wave extend to the 4700 to 5000 area over the next 9 months.

  6. pugsma said

    Note NYMO closed at -30 yesterday well below the lower BB of -21.

    A 2nd NYMO close today below the lower BB and below -40 is the setup for a potential massive SP500 move up.

    It would be an even better setup with SP500 close below its lower BB and VIX close above its upper BB.

  7. pugsma said

    Absolutely no alternate (blue) count P1-C3 top confirmation until these index levels are broken.

    SP500 4061
    QQQ 316
    IWM 211.54

  8. Denali92 said

    Finally something interesting for me to comment on to allow me break my “radio silence” in the comments section.

    When the markets are persistent – like they have been so much of the past 5 ½ years (Since the November 2016 pre election bottom), my historical work has been less useful and relevant – except when it is focused on really recent history- which lately has meant buy every dip after a few days….

    With the sell off from Tuesday’s new all time high and today’s big down open, there are a few key points to note:

    With the SPX / SPY June high above its May high, it is highly probable that July’s high will be above the June high. Why is that?
    -There have been 13 instances since 1998 when June’s high has been above the May high and in 11 of those instances (85%), the July high has been above the June high.
    -The other two instances were 2003 and 2004.

    With the sell off that started on Tuesday, the market is now possibly setting up for one of its strongest seasonality quirks, a primary turn that is almost always in the last 7 days of June – which is usually the 4th full week of June.
    -Last year, the end of June low was on Monday, June 29th – just above the lower bollo.
    -The late June low has been a bottom every year since 2012. Most, but not all, of these lows have occurred below the lower bollo. (Last year’s was 10pts above the lower bollo).
    -The Monday before quarter end is the most consistent day for this late June bottom, but since 2012, it has occurred as early as June 24th (2013 – Monday post opex MAJOR Bottom) and as late as June 29th (3 instances, including 2020).

    -The last time there was a late June top was back in 2010 – which was a post opex top that led to the MAJOR summer bottom 10 days later.

    With the SPX down about 1% at the opening, this will be one of top 10 (out of 93) worst Quad opex openings since 1998.
    • Only once did the market make a significant bottom on Quad opex day – in September 2001 (post 9/11) when the market was super oversold and opened 4.5% lower.
    • In two other instances, it produced opex days bottoms and decent bounces (June 2001 and Dec 2004)
    • In 6 instances, the market had topped earlier in the opex period and traded lower for about 12 days.
    • The 10th instance was an outlier (September 2016) when the market had bottomed on Opex Monday, but despite the drop on Opex day continued higher in to a post opex top.
    • The most recent instance was June 2018. The market topped on opex Wednesday (13-Jun-18). It opened .8% lower on opex day. It closed slightly higher than the open on the day, but then proceeded lower until bottoming on Thursday, June 28th – which then triggered the strong summer rally that did not end until early October 2018.

    While the market’s persistency and recent history would suggest the market could bottom at any time, the longer term history of June, as well as big down openings on Quad Opex day suggest that maybe, just maybe this sell off will have a bit more to it.
    -WHICH, if it does occur, could set up a significant buying opportunity some time from next Thursday, the 24th.
    -Given the history of the June high above the May high, this would then set up a good July rally in to new all time highs for the SPX.

    Bottom line: While I do believe one should buy this market dip for a rally to new all time highs, the longer term historical data strongly suggests that the SPX is not likely to bottom until sometime between next Thursday, June 24th and Tuesday, June 29th.

    -D

    • pugsma said

      Good stuff D. Consistent with my comments this morning that this wave lower is minute (2) of minor 3 to the 50%/62% Fibs at 4159 to 4139. Then it’s a likely “giddy up!” For minute (3) of minor 3 to née all-time highs above 4257.

      • Jim Guthery said

        Thanks, Denali and Pugs! Great stuff. I would have jumped to the conclusion of P2 without your support. Growth stocks do appear to be holding up well under this pressure.

  9. pugsma said

    Haven’t seen one of these in a while, but the move up from 4057 to 4257 look like a leading diagonal for minor 1 of major [5]-P1-C3 of the primary (white/green) wave count. Minor 2 wave underway with a 50%/62% Fib retrace target of 4157 to 4133.

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