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January 14th, 2022: SP-500 Chart Update

Posted by pugsma on January 14, 2022

4:10 pm EST: The SP-500 gapped down from 4659 to 4638, quickly hit 4623 rallied to 4663, slid to 4615 (days low) and rallied into the close to hit 4665 (days high) and closed at 4662.

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 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 correct 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.

Technical Indicators: SP500 vs NYMO vs VIX Chart Link: Print SharpCharts from StockCharts.com

  • NYMO: Potential Bullish +DIV on NYMO vs SP500. On Monday Feb 10th, the NYMO closed at -4 with the SP500 closing at 4670 vs Friday Feb 14th, the NYMO closed near +3 with the SP500 closing at 4662.
  • VIX: Bullish. The VIX continues to make a series of lower, lows as the SP-500 dropped from 4743 to 4495.
  • Weekly Sentiment: Bullish. Only 25% Bulls vs 38% Bears. Bullish readings below 30% typically set a bottom. AAII Weekly Sentiment Link: Sentiment Survey Past Results | AAII

Wave Count Options: The alternate (blue) count should be considered the base case (middle of the road) scenario with the highest probability (i.e. 55%). The primary (white/green) is 15% probable and the alternate (red) is 30% probable.

  1. The original primary (white/green) wave count is calling for a powerful bull wave (3) of minor 3 or minor 5 of major [5]-P1 that began from 4582 and will move much higher (5331 target) for a P1-C3 top sometime in the summer to early fall 2022. The minor (2) wave competed at 4582, near the 78% Fib retrace of 4567. The first wave i-(3) completed at 4749 and the wave ii-(3) may have completed at 4615 between the 78%/88% Fibs of 4619/4602.  Note: the primary (white/green) wave count remains valid above 4582 and would be confirmed on a break above 4819 and then above 4906 (ED max).
  2. A new alternate (blue) wave count that can squeak out one more slightly higher high than 4819 as an ending diagonal major [5]-P1. The minor 4 wave of major [5] ended at 4582 (above the 78% Fib retrace of 4567) and should lead to one more higher high than 4819 for minor 5. This new slightly, higher high than 4819 cannot exceed 4906 for the ending diagonal to remain valid (i.e. M5 < M3 < M1). Within the minor 5 wave, the minute (a) wave completed at 4749. The wave minute (b) may have completed at 4615 between teh 78%/88% Fibs of 4619/4602. Note: The alternate (blue) count remains valid above 4582 and would be confirmed on a break above 4819.
  3. A new alternate (red) wave count that has P1-C3 topped at 4819 and now the P2 correction to a least a 23% Fibonacci retrace of P1 down to 4215. The major [A]-P2 wave looks to have completed at 4582. The major [B]-P2 wave bounce completed at 4749, between the 62%/78% Fib retrace of major [A] at 4729/4767. The major [C] wave down is underway with a [C]=1.62[A] target at 4365.  Note: A break below 4582 would confirm this alternate (red) wave count.

House Keeping: The US Markets are closed on Monday, January 17th for the MLK Holiday. Next blog update will be on Tuesday, January 18th.

Have a Great 3-Day 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

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