January 6th, 2022: SP-500 Chart Update
Posted by pugsma on January 6, 2022
6:20 pm EST: The SP-500 gapped from 4700 to 4702, quickly hit 4721, dropped to the days low at 4671, rallied to the days high of 4725 and faded to close at 4696.
Key Market Comment: It’s possible now that the P1-C3 top is in place at 4819 on January 4th, 2022. An important technical indicator here is that the NYSE A-D Line Cumulative $NYAD | SharpChart | StockCharts.com) that failed to make a new high along with SP-500 and is now rolling over hard. This is massive, nearly two month long negative divergence on a key market indicator of underlying strength. The NYSE A-D Line cumulative almost always negatively divergence significantly a key market top. This can corrective itself, however it going to take very broad market rally of all sectors per the primary (white/green) wave count, which is calling for wave (3) of minor 3 move much higher.
Wave Counts: Things have gotten a lot more complicated here at the beginning for year 2022. There are now three wave counts in play. My policy for more than 10 years here, is not to replace the primary wave count when it remains valid. However, I believe that now that US Federal Reserve is likely to introduce quantitative tightening in Q2-2022, the base case (primary count) higher probability scenario is the alternate (blue) count ending diagonal for the conclusion major [5]-P1 below 5000.
- The original primary (white/green) wave count is calling for a powerful bull wave (3) of minor 3 to start soon and move much higher (5331 target) for a P1-C3 top sometime in the summer to early fall 2022.
- A new alternate (blue) wave count that can squeak out one more slightly higher high than 4819 as an ending diagonal major [5]-P1. This new slightly, higher high will likely be below the 5000 level.
- A new alternate (red) wave count that has P1-C3 topped at 4819 and the P2 correction to a 38% Fibonacci retrace of P1 down to 3821. A break below 4495 would confirm this alternate (red) wave count.
SP-500 15-min chart:
SP-500 60-min chart:
SP-500 4-hr chart:
SP-500 daily chart:
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