February 16th, 2012: Update 1 – EOD
Posted by pugsma on February 16, 2012
5:30 pm EST: The primary count was once again right on target today. Triangle wave e-(4) of minor 5 of major [3]-P1-C3 bottomed at 1340.80 late yesterday and today we have 5-waves up to a new high of 1359.02. It is possible that these 5-waves up to 1359.02 are near the end of wave (5) of minor of major [3]-P1-C3 at the (5)=(1) target of 1362. Or it’s possible that this 1359 high is simply wave i-(5) or minor 5 and we have a pull-back tomorrow to about 1348/1350 for wave ii-(5) before waves iii and v-(5) reach the 1375 target, where (5)=1.62*(1). Note that the large IHS target is at 1376 and the major [3]=[1] target is also 1376, so there is a lot of confluence at 1376. It will take a drop below 1337.35 to confirm the top of minor 5 of major [3]-P1-C3 has been found and that the major [4]-P1-C3 correction is underway headed for the 1315 pivot area.
The new ultra-bullish alternate (blue) count can be seen on the 60-min chart. This alternate count assumes this recent week long side-ways correction was only minor 4 of major [3]-P1-C3 and now the SP-500 price is set to rise up to at least 1406 in a minor 5 wave of major [3]-P1-C3, where minor 5=1. There is also major [3]=1.23*[1] target at 1426. Today’s 18 point rise to 1359 is wave (1) of minor 5. After a wave (2) correction to 1348/1350, we should see a wave (3) of minor 5 move up to about 1380, where (3)=1.62*(1) or 1397, where (3)=2.62*(1). This new count looks viable given the VIX Sell and SPX Buy signal issued today. And this count will surprise the most traders and the SP-500 price continues to melt-up.
Support is at 1350, then 1337. Resistance is at the 1363 pivot and at then the 1372 pivot.
SP-500 15-min chart (EOD):
SP-500 60-min chart (EOD):
mika009 said
Thanks Steve!
I was just looking at the chart of SPX 2010. April highs were taking out in November before market pulled in 4-5%. It went 10 points higher. So it is possible to see that Osama top is been taken out and world gets excited and then market pullbacks when people are calling for 1400 which they don’t get.
Springheel Jack (@shjack666) said
You see that quite a lot. It depends which resistance you’re watching though. The 2010 high was a couple of points below the 50% fib retracement of the bear market and the 2011 high was just two ticks under the base / neckline for the 2007 double-top.
nltaur said
lookat the site True Contrarian John Kaplan full of examples like may 2 th and october4 th
Springheel Jack (@shjack666) said
Nice work mate
I’ve been looking at the Vix chart too & you didn’t mention that there was also a bearish engulfing candlestick on the Vix daily.
If Vix closes lower tomorrow it will confirm both a Vix Buy (equities) Signal and the engulfing candlestick. A strong signal indeed so I’m sure we’ll both be watching tomorrow with great interest.
pugsma said
Thanks SHJ. The PUG Primary Count as been knocking the cover off the ball since the Oct 2011 lows. I was little bearish eariler this week as we approached my original major [3]-P1-C3 high of 1376. But now I can see an even more bullish outcome, per the new altnerate count.
I sold my all my longs on Monday at around 1350. But I will keep on scalping both long and short here trying to milk the top of major [3]-P1-C3 for all it’s workth. Made some great coin buying AAPL near it’s AH and Pre-market lows today.
Springheel Jack (@shjack666) said
You’ve been killing it mate. Great work
pugsma said
Thanks SHJ: You do great work too. I just don’t have time to look much at it or anyone else work these days. Between my personal life, engineering job and his blog, I’m burning the candle on both ends and the middle!
pugsma said
VIX Sell, SPX Buy Signal Confirmed today. Typically on the 3rd day (tomorrow) there will be a slight SPX sell-off and VIX rise to close a 2nd day back inside the upper BB. Then the SPX will head much higher (a la the Primary count and new ultra-bullish count).
Also, with $NYMO closing back inside it’s lower BB and being oversold, the $NYMO could be ready to exploded higher as well.
pugsma said
Look what I wrote (for free to the public) on my Long-Term SPX View Page on Jan 18th, 2012:
“1-18-12: Updated SP-500 Daily and Weekly Charts. The SP-500 forecast from early to mid-October 2011 is right on track. Wave minor 3 of major [3]-P1-C3 is finishing up in the 1319 to 1344 area and I’m expecting minor 5 of major [3]-P1-C3 to reach the IHS target of 1376 in mid-to-late February 2012. Major [5]-P1-C3 should top in the 1400-1440 area by Apr-May 2012.”
http://pugsma.wordpress.com/longer-term-sp-500-view/
No wonder NO ONE wants to Sell this market. PUG already told the world was was going to happen this winter and spring.
zeke said
zig zags are tougher to play. any advice others have on when to buy long or short / manage risk? or do some sit and wait for clear direction up or down
paulsgs said
let me give you my experience this week. Bought TVIX up 10% did not sell. lost 3% after hours today. learned to scalp like PUG take a small profit or as they say sometimes no trade is a good trade. With these shallow #4 dips I will wait for a clearer picture although my long oil stocks are running. hope that helps.
pugsma said
Remember back in late September 2011 when ECRI’s (Economic Cycle Research Institute) Lakshman Achuthan predict a new USA Recession. Take a look at his Dec 8th, 2011 Update on Bloomberg how he was hedging. Just imagine what he must be thinking today Feb 16th. Opps…i was wrong!
http://www.businesscycle.com/#
Mike said
You know what they say: economists have predicted 9 of the last 5 recessions!
JA said
Pug I was thinking about that the other day too. A couple thoughts I had come to mind that may have saved them in 01 and 08. If we never have 9/11 his 01 call probably never happens and if we never have Lehman in 08 that may never happened either.
It looks like he has a Bloomberg tv interview a week from tomorrow. That will be interesting.
pugsma said
Maybe Achuthan and Prechter both read their charts upside down?
paulsgs said
Now that is funny!
JA said
Also, his dumb@$$ is the reason I didn’t buy the dip on 11/25 at 1158. I went from all cash to all in on 10/4 1090, 12/19 1202, and 1/27 1303. I missed the one on 11/25 cause I was so cautious with his call. In 01 and 08 the market rallied right after his call for a month or 2 kind of like October 2011. If I would have pulled the trigger on 11/25 I would have nailed all 4 recent market dips. Unfortunately I don’t hold til the top.
paulsgs said
same experience different blog. Good to be a PUGSTER.
Bill S said
In favor of the ultra-bullish alternative count, look at what happened the last 2 times that the HYG:LQD ratio saw a slow stochastic buy cross in oversold territory like what we got today…
http://screencast.com/t/RCX51HUh
Aka2106 said
Great work as always Steve. Been an infrequent visitor and poster last few months given work / life being busy but the last few days have been spot on. Need to make sure to check back in regularly. Great call Wednesday night sticking to the primary and seeing through the noise.
gann360 said
Interesting QQQ Time/Cycle Chart,
From the Last August Pivot High of just under $60 which led to a quick fall to $50 ish
Today we hit 144 Trading Days from that Pivot High,now, 144 is a Power Fib Number, which has in many
occasions giving a heads up to another Pivot in Time,(of course nothing is automatic or 100%) But we are also hitting on
540* Degree up in Price (which is a Cube) From the 2008 Pivot Low here at $64 ish
And seeing that it’s Options X Today ,I thought it was worth Noting
http://screencast.com/t/6zPqDJQq6kG
$64 ish is 540 * up in Price
slater9 said
gann traders take the 540 very seriously….especially on the long term as shown by gann 360….here is a classic from the archives
http://stockcharts.com/h-sc/ui?s=IBM&p=M&st=1995-01-01&id=p13457206392&a=127738728&r=5272&cmd=print
slater9 said
(5)=(1) @1362 per steve
1363 long standing pivot per steve
1361,5 now gann pivot( though gann traders like price to ”peak around corner”)
1361.5 important fib to me….
ability to hold or not hold this pivot should be important…
paulsgs said
another interesting chart. thanks for your work. http://www.wavaholic.com/
pugsma said
PUG Wave Breaks the EWI (Prechter) Stop of 1360…Bullish Booyah !!!
Bill S said
There goes Precheter’s 1360 stop
pugsma said
The EWI (Prechter) Grand P2 up and P3 Wave Down to Sub-667 was killed off weeks ago when the DJIA crossed above the May 2011 high of 12,876. Of course I doubt EWI told anyone to stop shorting then. They have been telling subscribers to be 200 to 300% short since early September 2009 at 1019 on the SP-500 and 9,500 on the DJIA. Opps!
paulsgs said
that is scary.
Bill S said
Now we just need to take out 1371 so that clueless Daneric can take that wave 2 label off his count. At that point Major 3 will have done it’s job
pugsma said
Paulsgs: I have heard EWI has 10′s of thousands to maybe 100,000 subscriber’s. I have much less than < 1% of that. Yet, they have been consistantly wrong the past 2 years and we have been right. I need to find a way to better market this blog.
paulsgs said
that is true. I tell everyone about you but most are to lazy to work that hard. You are correct you should have a much larger following. How about an ad or use Facebook on Stock charts.com. Use the Public Chart List on Stock Charts.com. My experience has been this is where the people that want to learn and make money start or do lots of research. You can use a 1 day delay with commentary and people will quickly make you a golden member. This is where I started and there are lots of people that use this advertising medium. Let me know if you have any other questions.
KaZoom said
But it’s important to NOT get 100,000 subscribers – else your counts would probably fail too!
Aka2106 said
Great call Steve. With vol low options become attractive again. I bought feb 25 expiry sp calls based on the primary. Just sold em for a quick 150 pct gain.
pugsma said
Aka2106: Nice Trade! You Wake Forest guys have great money sense!
Aka2106 said
Sorry. Bot them at yesterday open. Sold on today’s open
pugsma said
Aka: Now that is an excellent scalp and a very good approach to this market position here as Cory R at “Afraid to Trade” as recommded. I’m doing the same type of thing with 3X EFT’s using pre and post market hours for optimal entries an exits.
Aka2106 said
Yeah I have been out of mkt for awhile becaus Vix was too high. Vix in the teens gives some good risk reward set ups for option scalp trades.
pugsma said
The VIX is donw about -4% at 18.49. A second close under the upper BB (20.69) will confirm the VIX, Sell SPX Buy signal.
pugsma said
Wave count here, what we want to see after a test of the 1363 pivot to complete i-(5) of minor 5 of major [3]-P1-C3 is a back-test of the 1354 ascending triangle flat top for wave ii-(5).
pugsma said
Just an FYI to all my international subscribers. US Equity Markets will be closed on Monday, February 20th in observence of the President’s Day Holiday.
We in the USA are taking time out to honor the great work of President Barack Obama and his #1 side-kick Ben Bernanke for saving the World Economy and in the helping to push this Bull Market to new recovery highs.
gann360 said
Something else Big Happened today
The Dow Jones Just Tagged 100% Increase inPrice from March 2009 Low, This could be a Big Deal, We shall see
http://screencast.com/t/UT3W9CAvvI
Gann360
pugsma said
Nice chart Gann360.
gann360 said
Thx Pug
Maybe the Markets pull in more than a few Hours here,,,
we will see, But this Up Trend in Powerful
mika009 said
This is not trading related- Now a days billions are so cheap “Italy police seize $6 trillion of fake U.S. T-bonds”
LarryH said
I read that – half of the public debt – those boys were thinking big
gann360 said
Example of Price Vibrations on the QQQ Calling the 2008 November Low:
http://screencast.com/t/5iXsQxj9uVE
Again nothing is 100%, but there is a confluence of Cycles here, Which could mean something ! Just wanted to Share
Chrys said
Steve – any concern for copper? Not confirming this new high and trending down lately. Thanks
pugsma said
Hi Chrys: Sure good point. But it what we expect to happen during the final stage of a minor 5 of major [3]-P1-C3. Lots of negative divergence have and should continue to appear. But price action trumpts all else even though eventually the price will be pulled back by all of these negative divergences. In the meantime we could see my 1375/1376 over even new 1406 targets hit.
JRW said
Steve, any concerns that copper (JJC) is off so sharply this morning, and ndx is down?
pugsma said
JRW: See my response to Chrys above.
pugsma said
Right on schedule. Looking for a wave ii primary or (2) alternate to back-test the 1354/1355 break-out area.
pugsma said
Final Current Pain Update (Note: Current Pain attempts to predict the price at the close of OPEX today):
SPY: 135.0 (SPY currently traing at 136.02)
QQQ: 63.0 (Currently trading at 63.24)
IWM: 82.0 (Currently trading a 82.70)
Chrys said
Steve – what’s Current Pain? Thanks
Chrys said
never mind..
pugsma said
Amoung other things I can read minds too!
Denali92 said
Must admit it is sounding a little too exuberant in here – just like Feb 18, 2011….. (I went back to the archives and checked….)
Due to the lack of hourly signals and the extremity of the move, I know I have failed to find an appropriate analog…. but I will say that at 10:30am we did get an hourly sell signal and though they did not work in January, they have a very solid opex track record, particularly on the Wed, Thurs and Fri of opex…..
Overall, I have no analogs, but I expect the turn today or Tuesday….. the last two opex sell signals in September and October were both right and profitable…..
I still favour PUG’s original view….. from earlier this week…. but until we trip key levels down below…. the bulls are in charge…. and I simply wait for the next hourly buy signal ….65 days and counting …. extraordinary… hourly stochastic not below 20 ont he Mids since 28-Dec – one for the EXTREME records books…
-D
nickbas said
denali what hourly buy signal are you referring to? is it stochastic related?
Denali92 said
I track hourly sell (MFI or RSI above 75 ) and hourly buy (MFI or RSI below 25) for many years – they are remarkably helpful, particularly during opex week (see Dec 14th) – I track them on the MID index (actually MDY) and we have NOT had a signal since Dec 14th…. which is BY FAR the longest period without a signal since the bull began in March of 2009….
There was one other period of 56 days, but there was a VERY sharp sell off during that period (aug 09) and it just missed triggering a buy signal at around Day 40) per my comments since late Jan – I have been expecting and waiting for that hourly buy that has never come (which has been a little frustrating) as it has meant I have been positionally very light….
-D
Denali92 said
and the hourly stochastics on the MID have not been below 20 since 28-Dec….
-D
Chrys said
Denali – Are you using RSI 14 and MFI 21? Thanks
Denali92 said
No – RSI 9 and MFI 14 – I tested a variety of indicators in 07 – 08 and that seemed to be the best setting for MDY….
Stochastics are %D with settings of 9 5 and 3
Again used to be pretty reliable….
But the MID has just outperformed like nothing else…. except of course the NAS100 which I do not track….
-D
thefuddleduddle said
Update: http://www.screencast.com/t/t7Gx1vHMrJk
Small descending triangle breakdown would give us a target just above the ascending triangle breakout support.
pugsma said
TFD: Nice charting. You have a good analytical approach.
thefuddleduddle said
Thanks. The smaller time frame charting should help generally with those who want to be scalping more after the massive run up and near completion of the recent Pug wave.
gann360 said
AAPL Weekly Chart,
a weekly Doji Close on High Volume could be a Red Flag…… Careful
http://screencast.com/t/nhIzjV4mj
pugsma said
Gann360 good chart on AAPL. I played the one day bounce yesterday from $493 and $487 up to my exit at $504.
I think AAPL down to $440 to $460 during the SPX major [4]-P1-C3 correction is a decent target.
Denali92 said
One other interesting note – of the last 62 opex weeks – 14 have had the high on Friday…. on all 14 of those Fridays – the market closed up… interestingly, just like this week, 7 of those Friday opex week highs made a low for the week on the Tuesday…
-D
pugsma said
Denali92: More specifically, do you mean “up for the week” or “up on the Friday that the high occured”?
Denali92 said
Up for today – ie the market did not close lower – only higher.
pugsma said
And as a follow up question: what does your data say about the tendency for a post OPEX and post President’s Day Holiday Top?
Denali92 said
Here are the stats for the 14
Major low before – 3 (ie we hit bottom during the week – on the Tuesday and rallied strongly like July 2008)
Major tops after – 6 (including Dec 07 post holiday and Feb 2011 pre holiday)
Minor tops – 5
I define major as 50 SPX pts or more and minor as 50 or less…
The tops are either on the friday or the Monday or Tuesday after – an example of the Tuesday after was Sep 2011.
-D
Sorry for the delay – out with the kids watching an outdoor ice hockey game for an hour – then it got too cold!
pugsma said
Denali92: Once again great historical turning point info. Thanks.
So the historical OPEX and President’s Day Holiday odds and my primary count favor a major top (i.e. major [3]-P1-C3) after OPEX Friday and likely next Tuesday.
Pluse we have a New Moon on Tuesday, Feb 21st at 22:21. New Moons are usually highs.
Denali92 said
Interestingly, President’s Day has not been great for turning points nor has February opex – relative to the other months (like January), but as January was a real flop for the turning points this year – maybe February will shine….
On the whole, the holidays were excellent for turning points in 2011 – with only July 4th being delayed by two days and quite a few points – the moons were very good in 2011, but have only caught a few minor tops so far this year and I mean MINOR!
-D
JRW said
Anyone have the intraday $NYMO?
Chrys said
minus 3.5
thefuddleduddle said
Update: http://www.screencast.com/t/CqqP2e8g
Small ascending triangle target in blue. Both upside and downside targets are valid at this point in time.
I’ll be out for a bit, good luck everyone.
pugsma said
Hey, it’s 50 degF (7 degC) here in Chicagoland on Feb 17th. Ain’t Global Warming Great!
pugsma said
The whole investment world is just waiting for the this 3-5% pull-back from this 1363 to 1371 pivot resistance area. I’ve seen it mentioned just about EVERYWHER from the main-stream media to small-time blogs.
This is why I really think we need to keep an eye on the new altnerate (blue) count. If we have a gap up on Tuesday to clear the 1363 pivot after this 7 day long consolidation between 1340 and 1360, then things could get very exciting for the very bullish alt count.
pugsma said
Cobra had some long-term historical data analyis that said if we don’t get a great -2.5% pull back trading day 37-40, which I believe occured this week, then this bull move could last upwards of 60 trading days without a -2.5% correction.
Denali92 said
It is the move (upwards..) that would mess the most people up….
-D
pugsma said
Delani92: Yes, you can just imagine “the panic” by those short here or those begging to “buy the dip” here. This alt count scenario must be taken very seriously.
thefuddleduddle said
These are one of the few times I hope the investment world is right, it would be nice to buy the dip.
In terms of the more bullish count playing out from a news driven standpoint we might not get a pullback until early mid March when the world fears that the Greeks won’t be able to pay their bill that month. Ultimately I think they will with some helping hands which could mark the end of the pullback.
Also from price and pattern perspective, there are many stock charts ready to breakout, and even the laggards are starting to break intermediate to long term downward trend lines.
thefuddleduddle said
Update: http://www.screencast.com/t/KxE4Lk3o
Blue target met. This would invalidate the descending triangle pattern earlier today. However I’m taking the orange target out because we might be in a long grinding bear flag, of which if we breakdown is pretty much the same target.
thefuddleduddle said
edit: I’m *not* taking the orange target out
Slow day today.
thefuddleduddle said
Last post from me today. For those of you who trade silver and/or silver related equities. Keep in mind the 1 month lease rate has turned quite negative. Below -0.4% has been a pre-cursor to the recent sell-offs in Sept and Dec.
Have a great long weekend everyone. In Canuck-land Monday is ‘Family Day’.
LarryH said
http://stockcharts.com/h-sc/ui?s=PAAS&p=D&yr=0&mn=2&dy=6&id=p22546384207&a=253447044&cmd=print
Maybe that explains this chart
Denali92 said
ENJOY THE HOLIDAY WEEKEND!
We have two weeks of school holiday here in Switzerland, so we are already in the mountains – bright sunshine and plenty of snow…. before I go to bed I need to water down my kids’ mini bobsled run for their toy bobs, so it freezes overnight….. then we can send them out first thing in the morning to race down the track – for a 3 and 5 year old it is heaven here!
Opex has been ever interesting with the attempts down at 1340 and then today’s new highs…. Definitely learned a few new things with the data…. particularly that when we are this extended in to opex, there is never a big down week – had not really noticed that until I had really searched the data…. (nor about the weekly high being on Friday that the SPY never closes down for the day on opex day)
Thanks for all of the great perspective – this board (and PUG, of course) are invaluable!
-D
ROX said
I am jealous of your snow! We have not had much up in Lake Tahoe, CA. I don’t live there, but I like to make trips every year.