weekend update

REVIEW

Market surprises with a volatile week. After hitting a new uptrend high on tuesday, the market sold off about 2% to a thursday low, before rallying to end the week. For the week the SPX/DOW were mixed, and the NDX/NAZ lost 1.0%. Asian markets were -0.7%, European markets were -0.2%, and the DJ World index lost 0.5%. Economic reports for the week had a negative bias for the first time in many weeks. On the uptick: building permits, the PPI, leading indicators and the monetary base. On the downtick: the NAHB, housing starts, existing home sales, the Philly FED, the WLEI and weekly jobless claims rose. Next week we get a look at Q4 GDP, (est. +0.5%), personal income/spending, PCE and the ISM.

LONG TERM: bull market

Another week another bull market high. The bull market continues to unfold with a few short/medium term surprises here and there along the way. We continue to count this nearly four year bull market as Cycle wave [1] of the next multi-decade Supercycle bull market. Cycle wave bull markets unfold in five Primary waves. Primary waves I and II completed in 2011. Primary wave III has been underway since that low. Primary I divided into five Major waves with a subdividing Major wave 1. Primary III is also dividing into five Major waves, but both Major 1 and 3 are subdividing.

SPXweekly

Major waves 1 and 2 of Primary III completed in 2012. Major wave 3 has been underway since that low. Within Major 3 we have already completed Intermediate wave i and ii. Intermediate wave iii has been under since the late 2012 Int. wave ii low. When this uptrend, Int. wave iii, concludes we should see about a 4% correction for Intermediate wave iv. Then another uptrend will complete Major 3. After a more substantial Major wave 4 correction, a Major wave 5 should complete Primary III. Finally, after a Primary wave IV correction, Primary wave V should end the bull market. We are still expecting the bull market to end this year, or early next, most likely above all time new highs.

MEDIUM TERM: uptrend

In has certainly been an interesting uptrend from the Int. wave ii low at SPX 1343. At first Minor wave 1 was shortened at SPX 1424, due to the fiscal cliff drama. Then Minor wave 2 formed an irregular flat: 1398-1448-1398. After that, on the last trading day of 2012, Minor wave 3 got underway and quickly started to subdivide. And subdivide and subdivide. Then when it got most of us market pundits lost in all the subdivisions it ended at SPX 1531. When it did end, Minor 4 wasted little time in getting underway: dropping 34 points in just two days.

SPXdaily

At the SPX 1497 low, the market hit all the technical parameters we had been expecting for a Minor 4 pullback: 30+ point pullback, an oversold condition on the daily RSI, extremely oversold on the hourly RSI, a decline to the OEW 1499 pivot range, and more. We then posted a green tentative Minor 4 label at SPX 1497. We also suggested a strong rally through SPX 1506 should confirm the low is probably in. The market gapped up on friday, retested that level and closed at the highs of the day. At the close we upgraded the Minor 4 label to its appropriate dark blue. Minor wave 5 should be underway. Medium term support is at the 1499 and 1440 pivots, with resistance at the 1523 and 1552 pivots.

SHORT TERM

Short term support is at the 1499 pivot and SPX 1471/75, with resistance at the 1523 and 1552 pivots. Short term momentum ended the week slightly overbought. The short term OEW charts are now positive with the reversal level at SPX 1515.

Minor wave 3 was a bit tricky to decipher, but in the end it had an impulsive 17 waves up from SPX 1398. The pullback, while only two days, held support at a short term support cluster: 1497, 1495, 1498, and the OEW 1499 pivot. Reviewing Minor waves 1 through 4 provides us with some potential targets for Minor wave 5. We had been targeting the OEW 1552 pivot all during this uptrend. Let’s see if it still fits.

SPXhourly

Minor wave 1 was 81 points (1343-1424), and Minor wave 3 was 133 points (1398-1531). This wave relationship suggest Minor 5 can be 30+ points, 50+ points, or even 80+ points. From the Minor 4 SPX 1497 low this projects: 1527+, 1547+ and 1577+. Clearly the SPX 1527+ is too low and would create a truncated/failed fifth wave. Not expecting that after all the Minor 3 subdivisions. SPX 1547+ is right within the range of the OEW 1552 pivot. SPX 1577+ is right within the range of the all time high at SPX 1576, with is also an OEW pivot. So the uptrend could hit either the 1552 pivot or the 1576 pivot for a Minor 5 high to end this Intermediate wave iii uptrend. But let’s look out a bit further.

When this uptrend ends the market will correct, downtrend, in Intermediate wave iv. The recent Int. wave iv’s have corrected between 4% and 5%, or about 60 to 75 SPX points. If this uptrend ends within the 1552 pivot range, Int. wave iv could then correct to about 1475. Right near the high of Int. i, and quite close to overlapping it. Not good. If the uptrend ends within the 1576 pivot range, a 75 point correction would take it to 1500. This is okay. When we review the spreads between the lows of previous Int. iv’s and the highs of Int. i’s the smallest spread has been 44 points. Or, in our current situation around a SPX 1519 low. If the Minor wave 5 rallies to the OEW 1576 pivot to complete Int. iii. Then corrects 4% during Int. wave iv. The low will fit within previous spreads, will have the right correction percentage, and will not only hit resistance at an OEW pivot (1576), but will find support at one (1523) as well. Let’s upgrade our target for this uptrend to the SPX 1576 pivot. Best to your trading!

FOREIGN MARKETS

The Asian markets were mixed on the week for a loss of 0.7%. India and S.Korea are in downtrends, with S. Korea improving, but both China and Hong Kong are weakening.

The European markets were mostly higher but ended with a 0.2% loss. France, Germany, Italy, Spain and the Stox are all in downtrends.

The Commodity equity group were mostly lower for a loss of 1.0%. Brazil is downtrending and Russia is weakening.

The DJ World index is still uptrending but lost 0.5% on the week.

COMMODITIES

Bonds are still downtrending but are beginning to display some improvement. On the week they gained 0.3%.

Crude is weakening and lost 1.9% on the week.

Gold resumed it downtrend losing 2.1% on the week.

The USD is uptrending and gained 1.1% on the week.

NEXT WEEK

Tuesday kicks off the week with: Case-Shiller, the FHFA housing index, New home sales and Consumer confidence. Wednesday: Durable goods orders, and Pending home sales. Thursday: Q4 GDP, weekly Jobless claims, and the Chicago PMI. Friday: Personal income/spending, the PCE, Consumer sentiment, ISM manufacturing, Construction spending, and Auto sales. As for the FED. FED chairman Bernanke testifies before the senate and congress at 10:00 on tuesday/wednesday with the semiannual monetary report. Then on thursday there’s a speech from FED governor Raskin at 12:30. Best to your weekend and week!

CHARTS: http://stockcharts.com/public/1269446/tenpp

About tony caldaro

Investor
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187 Responses to weekend update

  1. torehund says:

    I see the lift we have had since last summer as merely a corrective effort, with that diamondshaped a-abc/abc-b. Yes even on the rsi this is obvious. I ascribe this rising market during a correcting RSI phase as signs of underlying strength. On forex pros there is a fulfilled abc down from the last days. So dont count me into the bearcage just yet.

  2. cwallace90 says:

    knowing/understanding something and acting on it are two different things….and from the sound of your comment mocking Prechter, I very much doubt you have taken any proactive steps…the key is to get safe BEFORE it all happens, not when its in the rear view mirror……

  3. Lee says:

    3 million + ESH traded today

  4. pooch77 says:

    1475-80 should be a good bounce area

  5. kvilia says:

    I think I asked this question a couple of weeks ago. When labeling waves, is anyone concerned with MACD, neg. divergences and other indicators? I’m looking at daily charts and thinking about Tony’s wave 5 up. Just does not look right to me.

  6. Lee says:

    S3 hit in ESH
    forced selling under the S2 to the S3..lots of volume..all bots ..look at the chart
    Cats sleeping with dogs
    Its all bots..look at CL

  7. mokiepon says:

    I must give snaps where they’re due. DoctorBoom got this one correct, I think. Looks like it’s going for 50SMA, or very close to it. And I will be selling other 1/2 position of uvxy in a few minutes.

    Have a great evening! M

  8. Ronin I3 says:

    Good Job Lee and HD!

    • H D says:

      naaa I screwed up and got out too early. Today was the day to hold. No bounces. Happy but shoulda added not closed em.

  9. pooch77 says:

    1400-95 at least tomorrow morning,Unless Bonner comes out we super duper good news,need to watch the close

  10. H D says:

    what a hit! Nice one I3.

  11. mokiepon says:

    Oh My God! What if Prechter’s Right?!!!!
    (Kidding. Trying to keep you all on your toes. LOL!)
    M

  12. alexh110 says:

    Tony, I just noticed a discrepancy between your chart on the UST 10YR, and the Bloomberg and CNBC apps. They give a price of around 100.97; but your chart has 131.26.
    Wondered what’s behind this difference?

    • tony caldaro says:

      The stockcharts quote is the continuation futures price.
      Bloomberg, probably the most recent auction price.
      Yield, Alex, is more important than price in Bonds.

      • alexh110 says:

        Thanks Tony.
        Unfortunately I can only trade the price not the yield, as my account doesn’t allow spread-bets on bond yields.
        Do you happen to know an iPad app that will give the futures price?

    • rc1269 says:

      i think Tony means yield is more important than price for tracking the trend/charting, not anything to do with trading. we all have to pay the price!

  13. Lee says:

    So whats the call ? Things get complex or they stay simple ?
    THX !

  14. pooch77 says:

    I think we test 1500 again

  15. Lee says:

    Its amazing to watch these bots work..

  16. pbnj123 says:

    Decent divergences even here – just saying

  17. rc1269 says:

    hearing big big size buying in 10yr UST. a couple yards, in the cash market. that’s a lot for cash.

  18. mokiepon says:

    Don’t see any large amount of ‘buying the dips’ today. Just letting it fall. M

  19. best long today in the weekly 2faced system is $ENMD, +25%.

  20. rc1269 says:

    Treasuries are really breaking out today, for those who didn’t notice. pretty bearish move IMO

  21. pooch77 says:

    1505 next

  22. budfox9450 says:

    Sharing my SP500 outlook….The low of Nov 16th, 2012, is the start point for
    what I have come to know as 4 week cycles. Now, it is not a perfect timing sytem,
    usually though provide a good outook.

    Nov 16th – 4 weeks later is Dec 16th – the low was 28-31st.
    A 12 week cycle, or 3 months – is Feb 16th. – and Fen 19th was a price top time frame.
    If — we go to a 16 week cycle – we get the Mar 16th – that then is the next
    potenial price high – time frame.

    Afterwards – I would expect a 4, or 8 week time period to a low, and the
    8 week time comes in at May 16th…

    This outline – does support the OEW outlook for a new High in the SP,
    and a glimpse at the time frame for a correction that will surely follow….

  23. mokiepon says:

    The DJI hasn’t been as responsive as other indices. Wondering if this next leg might be the DJI’s lead this time. ANybody have opinion on this? UDOW is well priced… M

  24. Ronin I3 says:

    Lee, Nice call! THANKS!

  25. rc1269 says:

    Mornin’ Mr. T. What do you think about a potential failed 5th? seems like we’ve had lots of those recently

  26. Ronin I3 says:

    anybody trading?? indices? equities??

  27. mokiepon says:

    Possible retest of SMA 50? 1470-80ish. Not all in one day. I’m not the chartist’s that you guys are. Just a thought. M

  28. pbnj123 says:

    Well this looks like my ii so stepping in here
    Cheers

    • Lee says:

      R2 to S1 in ESH PBNJ
      If ur right ur going to do very well… if wrong its a cheap long
      Like ur style

      • pbnj123 says:

        Thanks Lee
        We had BOTH the VIX sell – equities buy and the NYMO buy signal on Friday and was sure we would continue higher today since I missed my chance to load up in the build if i – so yes I was waiting for this ii.
        Cheers

  29. Lee says:

    See u squirrels later :)

  30. H D says:

    where was that old HDPOC? 1470 wouldn’t that be a gift.

  31. Lee says:

    Don’t be like DUG :)

  32. pooch77 says:

    Small caps falling apart

  33. pooch77 says:

    Pullback 1514?

  34. H D says:

    Wow, I wasn’t even on the right comments day. Reboot. Pivot time.

  35. T-Man!! Whats up Brother? Don’t know if I’ve run this past you or not. Nothing spectacular, but found that every significant high and low since October 4, 10974 has occurred in either October or March. As I said, it’s not an earth shattering observation but one worth noting. As follows: (October 4, 1974 low @ 60.96), (March 24, 2000 high @ 1552.87), (October 10, 2002 low @ 768.63), (October 11, 2007 high @ 1576.09), and (March 6, 2009 low @ 666.79).

    Hope all is well with everyone. As Larry Kudlow says: “Free Market Capitalism (and listening to the T-MAN) is the best way to prosperity”.

  36. alexhartley1 says:

    Hi Tony, How long do you think Minor 5 will last?

  37. Lee says:

    Morn
    It’s just getting too easy now. SPX
    Hey nobody answered my question on Sugar last week ..don’t bother now. :P

  38. pooch77 says:

    Right up into pivot as i thought.

  39. M1 says:

    Good morning, Tony.
    It looks like we will see a gap up at the open. Usually we get this kind of pattern during third waves, so I wonder if this small correction to 1498 could be only the second wave of minor 3 ??
    Thanks and have a good day.

  40. theyenguy says:

    You write, LONG TERM: bull market and We are still expecting the bull market to end this year, or early next, most likely above all time new highs.

    NO NO NO A market top has been achieved.

    World Stocks, VT, and Commodities, DBC, traded lower on political tensions in Italy, as well as on the exhaustion of the world central banks’ monetary authority to stimulate global growth and corporate profits, particularly in the Eurozone, as currency traders commenced competitive currency devaluation, who called Major World Currencies, DBV, 0.33% lower to close at 26.86; and Emerging Market Currencies, CEW, 0.62% lower to close at 21.15.

    It was the Greek shares that fell the sharpest of all European shares this week -3.4%.

    The world’s paradigm for economic and political experience, pivoted from Liberalism to Authoritarianism the week ending Friday February 22, 2013.

    Liberalism’s money started to die the week ending Friday, February 22, 2013, as the Major World Currencies, DBV, and Emerging market Currencies, CEW, traded lower and the US Dollar, UUP, traded higher.

    Authoritarianism’s money, the ability to command rule and govern, began to rise with the first of three Greek Bailouts beginning in May 2010, and is seen increasingly rising, as in the Alejandro Lopez WSWS report, Spain’s Popular Party makes U-turn on eviction petition. Last week, Spain’s ruling Popular Party executed an about-face over foreclosures and evictions.

    Inflationism is pivoting to Destructionism. Currency traders are unwinding currency carry trades, and initiating competitive currency devaluation, devaluing money; and bond vigilantes are calling interest rates higher; causing investors to derisk out of stocks and delverage out of commodities.

    The week ending February 22, 2013, World Stocks, VT, Commodities, DBC, joined Bonds, BND, in turning lower on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, to monetize debt, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad.

    The chart of the S&P 500 Weekly, $SPX, SPY, crested February 11, 2013, at 152.11, in an Elliott Wave 5 High. And World Stocks Weekly, ACWI, crested January 28, 2013, at 50.34, in an Elliott Wave 2 High.

    Jesus Christ is now introducing the epoch, that is the era, of Authoritarianism, which is characterized by fiat asset deflation, (read stock market decline) headline inflation, fascism, totalitarian collectivism, debt servitude and austerity. And now, to accomplish Christ’s aims, the Four Horsemen of the Apocalypse, are riding with intensifying vigor over mankind.

    More at http://tinyurl.com/behk3su

    • tommyboys says:

      Yen,
      You best start shorting immediately to ride this thing into the ground over the coming couple of years. I’m sure you’re already positioned this way however. Best of luck to all of us during this apocalypse.

  41. best performer in last week’s 2faced shorts was $DGIT down 19.82%.

  42. hooloo1957 says:

    Ted wave genius, hey dude your link doesn’t work!

  43. CB says:

    Very interesting. Thanls Tony!

    Gotta love Ashraf Laidi –”Oscar for best “short” film: the yen.Shorting Euro gets best “horror film” catgry. SpecialEffects to GoldInflation Hedge” : )

  44. Very good update!!, the only thing that for me is not matching is time is very strange that wave 4 only last 2 trading days comparing all the other waves, let me know your thoughts about this ,
    thanks!!!!

  45. alexhartley1 says:

    Thanks for the report Tony.

    Do you still think gold has another lower before the approx 100 usd rise. Say 1530-50?

  46. another fine elliot wave week end update Tony! thanks for all you hard work.

  47. THURSDAY, AFTER MARKET UPDATE, 2013/02/21

    A. SHORT TERM INDICATORS/SYSTEMS:
    eliott PSTT: remains on buy signal. a thursday’S, 2013/02/21, close below 1511 spx will triggered a SELLl signal, the PSTT is the most heavily weighted indicator for signalling a change in weekly to monthly wave counts and trend changes.
    qqq indicator: -7, down 11 points, has now triggered a sell short signal.(need 0 to sell ………and -6 to short. +6 is a buy and remains a buy until 0 is triggered. heavily weighs momentum in unison with smart buyer activity.
    ……….a -6 remains a short until 0 is triggered).
    smart money indicator: -6 , up 3 points. remains on sell signal. a -8, once triggered is usually a sell and remains so until a +7 is triggered.
    feb. monthly 2faced longs 2.37% loss today. holds for an entire month.
    feb. monthly 2faced shorts 0.86% loss today. holds for an entire monthly combined longs and shorts net about a 1% profit to day this month vs-0.54% for spy.
    weekly 2faced longs, 1.28% loss today. holds longs for a full week.
    weekly 2faced shorts, 0.67% loss today. holds shorts for a full week.
    a net 2.7% profit for combo longs and shorts this week – so far.
    i use the weekly 2faced stocks as day trading candidates.

    $SPY -0.61% today.

    B. LONG TERM INDICATORS:
    crash indicator at +2 from last friday, 02/15.next update will be on 2013/02/22. a rare -10 signals a 2008 type of crash.all other long term indicators remain on a buy.

    C. TRADES/ALLOCATION:
    33% invested, 30% short, 3% long.
    see blog for today’s trade details. waiting on minor pullback to possibly re-institute more long positions.

    D. STOCK WATCH:
    SHORT break out watch:$GUID,$ELLI,$RDEN,$SD, $MHP.
    LONG break out watch: $OESX, $CZR, $GTN, $SWIRI.

    E. MISCELLANEOUS COMMENTS:
    a SELL short signal has finally been triggered by the elliott “PSTT” indicator as well as the qqq indicator. locked in some decent short term profits, awaiting a short term pop to short more tna . i will probably add some non-tna shorts in the morning. as well.
    see blog for today’s trades. i will soon be trading the weekly 2faced system in my account, a conservative profit goal will be 1% to 2% per week after commissions, that would be about a 67% return compounded over 52 weeks at a minimum, not bad for a market neutral strategy if it continues to work for me.

    see the “ABOUT” section of the blog for more detailed descriptions of the use of all the above indicators and different trading portfolios.

    follow the comments section of my blog for regular indicator and trade updates, usually prepared on a regular basis usually prior to opening bell.

  48. Tony, why do you still have a green 3 on facebook? What are you looking for to make it a black 3? Btw, amazing calls on this market. Its like you have a crystal ball! HFM

  49. andysingal says:

    Hi Tony, any chance we fill the gap at 1425-1440. Thanks

  50. CygnetNoir says:

    Two things:

    1) Thanks Tony!

    2) … something yenguy this way comes …

  51. hanybaram says:

    1년전에 처음으로 이 사이트를 알고난후 꾸준히 보고 배우고 했습니다.
    그렇지만 훔쳐보기만 했을뿐, 님에게 감사하단 이야기는 한적이 없었습니다.
    그렇지만 오늘은 처음으로 ‘감사합니다’ 라고 말을 드리고 싶습니다.
    님의 꾸준한 열정과 엘리어트 파동에 대한 성찰에 감사드립니다.
    한국에서 애독자가~~~

  52. rdc132 says:

    Thank you Tony. Great weekend update.

  53. mokiepon says:

    Excellent analysis! Thank you, Tony.
    Melinda

  54. M1 says:

    Thanks, Tony
    Months ago I mentioned that only an unexpected “big negative event” could derail this uptrend that started in 2009. How could one be bearish when the Fed is pumping trillions into the market. That’s stupid.
    The Dow is headed to 20,000 unless we see that negative event or the start of WWIII that stops this very nice 4 years rally. The Fed will keep pumping money.
    GL

    • torehund says:

      M 1 agree with you. And later on the EU will start printing and market corrects as EW implies a strengthening euro. Maybe thats what will correct market down after this big 3 rd wave.
      Funny to see that market now starts to focus on the strength of German recovery..bots make news too, lol.

    • tommyboys says:

      +1

  55. pooch77 says:

    Tony,early next week you see us going straight to 1521-24 than pullback/backfill to 1517 or pullback to 1505-08 then up.

  56. rolandu11 says:

    Interesting this update. Have no medium term sell signal for the US market yet, but the probability soared. Think my projection beginning/mid March for a intermediate top is still unimpaired (See also the changed seasonal Chart showed some weeks before).

    http://s7.directupload.net/file/d/3175/p5tmckjw_jpg.htm

  57. Pingback: Risk-Reward Report-week 8 | The Risk-Reward Report

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