weekend update

REVIEW

Another week another bull market high, and the entire range for the week was only about 1%: (SPX 1547-1564). For the week the SPX/DOW gained 0.7%, but the NDX/NAZ were mixed. Asian markets lost 0.7%, European market gained 0.3%, and the DJ World index gained 0.7%. On the economic front, positive reports overwhelmed negative reports. On the uptick: retail sales, export/import prices, business inventories, the CPI/PPI, industrial production, capacity utilization, the NY FED, and the WLEI, plus the budget deficit and weekly jobless claims improved. On the downtick: consumer sentiment and the current account deficit. Next week is FOMC week, and we get a look at housing, plus leading indicators. Best to your week!

LONG TERM: bull market

The market continued to extend this four month uptrend this week. Not only has the DOW reached 300 points above its previous all time high. The SPX is now within 12 points of its all time high. The FED’s QE 1, QE 2 and QE 3 have accomplished their mission: to raise asset prices to support the economy, and avoid a depression. Oddly enough the permabears are still looking, as they have since the year 2000, for a plunge into the abyss. The anticipated plunge, as we have noted over the years, occurred between the years 1929 and 1932. That 89% stock market decline corrected the entire GSC from 1700-1929. In July 1932 a new multi-century GSC (grand supercycle) began.

Grand Supercycles consist of five Supercycle waves. SC 1 rose from July 1932 to Oct 2007. The DOW rose during this period from about 40 to 14,200. Then the bear market from Oct 2007 to March 2009 corrected 54% of that advance to end SC 2. Supercycle wave 3, a multi-decade bull market, began at that time. Supercycle waves consist of five Cycle waves. Cycle wave [1], this bull market, has been underway since the March 2009 low. And, to confirm it presence it has already made all time new highs. When this somewhat short Cycle wave [1] concludes, estimated to top in late winter/early spring of 2014, a nasty, but short bear market should follow. Then the Cycle wave [3] bull market to follow should last two to three decades. There still is plenty of time to get prepared.

SPXweekly

For now Cycle wave [1] continues to unfold as expected. Primary waves I and II, of this five primary wave bull market, ended in 2011. Primary III has been underway since that low. Primary I divided into five Major waves with a subdividing Major wave 1. Primary III is following the same path, but both Major waves 1 and 3 are subdividing into five Intermediate waves. Major waves 1 and 2 completed in mid-2012, Major wave 3 has been underway since that low. When Major wave 3 concludes the market will still have Major waves 4 and 5 to complete Primary III. Then Primary waves IV and V to complete the bull market. Basically there are three more uptrends after this one concludes.

MEDIUM TERM: new uptrend high SPX 1564

The current uptrend, Intermediate wave iii of Major 3, has been underway since mid-November at the SPX 1343 low. During this four month rise the SPX has gained 16.4%, and 221 points. Intermediate wave i, the previous uptrend, lasted four months, gained 16.4% and 208 points. These two uptrends are nearly equal. The previous uptrend subdivided into five Minor waves, with a further subdivision during Minor wave 3. This uptrend is doing exactly the same pattern: five Minor waves with a subdividing Minor wave 3.

SPXdaily

The main difference between Int. i and Int. iii is Minor wave 5. During Int. i, Minor 3 was 1.618 times Minor 1, but Minor 5 truncated, ending with a 0.382 relationship to Minor 1. During Int. iii, Minor 3 also has a 1.618 relationship to Minor 1, but Minor 5 is now within 2 points of equalling Minor 1. No truncation this time. Also of note, during the last uptrend the RSI never signalled a top with a negative divergence. During this uptrend every Minor wave has ended with a negative divergence, including the irregular high for Minute wave b. Observe the negative divergence now.

However, keep in mind this uptrend has cleared our original OEW 1552 pivot target, and is now nearing the 1576 pivot range (SPX 1569-1583). Should it enter that range, and clear it, the next pivot is not until SPX 1614. The technicals: an extremely overbought reading on the weekly RSI, and negative divergences on the daily RSI/MACD, continue to suggest this uptrend is on borrowed time. Also, seven of the nine SPX sectors are displaying negative divergences on their daily charts. However, this is Int. iii of Major 3 of Primary III, theoretically one of the strongest waves of the bull market. Medium term support is at the 1552 and 1523 pivots, with resistance at the 1576 and 1614 pivots.

SHORT TERM

Short term support is at the same 1552 and 1523 pivots, with resistance also at the 1576 and 1614 pivots. Short term momentum ended the week at neutral. The short term OEW charts remain positive with the reversal level at SPX 1550.

This uptrend has been quite relentless in its push for new highs in the SPX, while achieving new highs in the DOW. Our two methods of tracking the short term waves, for Minor 5, suggest a potential uptrend high has occurred or is quite close. And, we have a negative RSI divergence on the hourly chart as well. We looked back at the last two Minor wave 5’s, and neither of them exceeded the length on Minor 1. Friday’s high puts Minor 5 within 2 points of Minor 1.

SPXhourly

Nevertheless, the market will have to display some downside action before we can be fairly certain the uptrend has ended. The first level of importance is at SPX 1550, then at 1534. A break of the first support would turn our short term charts negative. Then a break of the second level would turn our daily charts negative, implying a correction is underway. Should Intermediate wave iv get underway, we see support just above Minor wave 4 at SPX 1485. This is the 1499 pivot range (SPX 1492-1506). After that the market should rally to new highs for Int. wave v. Best to your trading!

FOREIGN MARKETS

The Asian markets were mostly lower on the week for a net loss of 0.7%. Currently China, Hong Kong, India, Singapore and S. Korea are in downtrends. With India improving.

The European markets were mostly higher on the week for a net gain of 0.3%. Only Greece and Italy remain in downtrends.

The Commodity equity group were mixed on the week for a net loss of 0.8%. Brazil and Russia remain in downtrends.

The DJ World index is still uptrending and gained 0.7% on the week.

COMMODITIES

Bonds are downtrending but gained 0.2% on the week.

Crude is also downtrending but gained 1.7% on the week.

Gold is downtrending as well but gained 0.9% on the week.

The USD is uptrending but lost 0.8% on the week. The downtrending EURUSD gained 0.6%, and JPYUSD gained 0.8%.

NEXT WEEK

Monday kicks off the economic week with the NAHB at 10:00. Tuesday: Housing starts and Building permits. Wednesday: the FED ends its FOMC meeting with a statement and press conference. Thursday: weekly Jobless claims, FHFA housing prices, Existing home sales, the Philly FED, and Leading indicators. Best to your week!

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

About tony caldaro

Investor
This entry was posted in weekend update and tagged , , , . Bookmark the permalink.

314 Responses to weekend update

  1. Lee says:

    Boom !!!! #300 I only had 40 .. weeeeeeee

  2. uncle10 says:

    Lee, I trade futures. Started trading futures in 2005.

  3. H D says:

    and hello 1552 pivot, again

  4. Lee says:

    What’s better ..To know when ur wrong or know when ur right

  5. uncle10 says:

    seems most here and everywhere think the Bernake will continue QE and not signal any change any time soon. Now that everyone is on the same page what could go wrong?

  6. Lee says:

    Double top at !558 SPX Pivot PP

    Who cares double tops never work…:P

  7. uncle10 says:

    long above SPX 1550 seems like a tough position. Maybe we get to 1575 before 1500 but seems like a bad bet. 25 up 50 down. hmm thank goodness there is so much disagreement….

  8. piazzi says:

    interesting how these blah-blah news items like Cyprus-of-late happen when market moves into its projected intermediate cycle low time window

    since 2009, S&P has had amazing regularity with intermediate cycles

    I theoretically expect the next intermediate cycle low in April-may time frame

    Let’s see if theory and cyclicality work this time again or not

    BTW, MIDAS top finder (for those who like MIDAS method), was around 85% on Friday

  9. pbnj123 says:

    Tony is it possible that this morning was 1 and we are now up in 2 to be followed by 3 then 4 and 5 to complete iv down to the 1485+ area – as two’s are sneaky making you think all is clear only to resume?
    Thank you
    Cheers

  10. pooch77 says:

    Wow complete bear failure here,now i wonder if we go up to 1565-75 into FOMC meeting then down,Poochie left big big money on table as frickin computer crashed at open GGRRRR…

  11. llerias7 says:

    Guys a possible outcome for this minor 4 rests at FMOC meeting blabla on wendsday…possible near 1525…

  12. M1 says:

    aapl looks like is starting its huge rally !! + 50%

  13. M1 says:

    Very impresive. More than 250 comments today !!

  14. rc1269 says:

    i’m so glad Clooney decided to join us. man that guy is beautful. i bet he’s a mean crude trader too

  15. rc1269 says:

    wouldn’t it be nuts if the DOW closed green today??

    oh, wait a sec…

  16. Lee says:

    CL
    Inverse Head and Shoulders indicating trend change or diabolical head fake ?

  17. mokiepon says:

    Tony, I know you’re strictly a wave kind of guy, but since earnings season starts in about 2 weeks, how long would you expect wave v to last? M

  18. waverookie says:

    200 + comments and the dow is down 19 pts? Just doesn’t pass the sniff test. GL!

  19. gary61b says:

    AAPL has broke out of its FW from 705 on the daily,

    • IMHO, FB is also putting in a nice bullish reversal candle today, closed the dec 28-31 gap, price stabbed down through the lower BB and reversed. 9 out of 10 that signals a trend reversal. Note also the positive divergence on the daily MACD, FSTO and RSI14 (flat).

  20. fbender7 says:

    IMO: What I see is minute iv putting in a bottom today. Minute ii was a two-day affair, and it looks like minute iv has been all but a two-day affair also. Minute v of Minor 5 now underway. If Minor 5 turns out to equal Minor 1 (as per ratio analysis guideline), then it will take the SPX to 1585.

    As I write, the transports are up +5, after being down -72 earlier. Tremendous resiliency. So far looks like the major indices will end the day with a bullish reversal candlestick as well – another argument for Minute v being underway. In any event, time will tell.

    “Never bet on doomsday, ’cause doomsday never comes.”

    • fbender, good observation, but the jury is still out there if this is Int’ IV or only minute iv of Minor 5. Currently I give it 50/50. Time will tell. I

      • fbender7 says:

        I totally concur. If, however, I had to bet money on it, I would go with this being minute iv of Minor 5 as opposed to Int. IV.

        If this is Int. IV, it means that minute iv was very tiny indeed, and that just doesn’t pass the eye test for me.

  21. blubrd67 says:

    Tony, I can’t imagine this would be the case, but could even theoretically be possible that 1545 is all we could get as int iv as some suggested here? Would it fit any retracement points?

  22. gary61b says:

    The spx 60 could be interpreted from 1563 to 1545 as wave A and this is wave B which so far has held below 75% of retrace of B, then C down?

  23. CygnetNoir says:

    If I may be so bold as to offer this day/swing trader’s count using SPY: I count wave 1 from the late Feb low to have ended at 152.87 on 2/28, wave 2 ended 150.41 on 3/1, wave 3 ended last week at 156.80 after having subdicvided into five waves (152.33-151.52-156.1-155.21-156.80). Wave 4 looks to have ended with a simply abc (155.31-156.04-154.20) this morning, and we would therefore be in wave 1 of a larger wave five that should end the rally from the late Feb low. So whatever pullback we get here from the gap fill is one that I will be buying, if not on the pullback itself, on the way back above the 155.60 HOD print. I would like to see a pullback to 154.9x or so, as I prefer wave 2’s to retrace at least 50% of wave one’s – it’s a quirk of mine, what can I say? The above count is best seen on the hourly SPY chart, imho.

    • mokiepon says:

      CN, if you are correct, then I doubt wave v up will go as high as many are forecasting. JMO, which ain’t worth beans, or putting my 401k in an index fund either. M

  24. manunidhi21 says:

    Hi Tony..
    “”””The technicals: an extremely overbought reading on the weekly RSI, and negative divergences on the daily RSI/MACD, continue to suggest this uptrend is on borrowed time. Also, seven of the nine SPX sectors are displaying negative divergences on their daily charts. However, this is Int. iii of Major 3 of Primary III, theoretically one of the strongest waves of the bull market. Medium term support is at the 1552 and 1523 pivots, with resistance at the 1576 and 1614 pivots””””””

    I am confused..technicals compared with funda with a However”””
    what should be thr short term trade wait for cross of 1564 trgtng 1576 or 1552 trgtng 1534 ?

  25. M1 says:

    Very nice short squeeze !! Bots in charge ?

  26. blubrd67 says:

    Tony, does this incredibly rapid 12 point rise from lows today change idea that we started int iv yet? If int iv started, I expected it would’ve hit 1530’s at least before bounce, but this hardly touched 1545 and it’s already retraced almost all loss.

  27. mokiepon says:

    That downtrend didn’t last long. Guess it’s up toward 1566 and Tony’s next strike area. M

  28. gary61b says:

    spx from 1485 low to 1563 did pullback beyond 23.6 on 60 min chart, that could conclude this wave iv test
    .

  29. H D says:

    BTFD is still the best TA money can buy

  30. Lee says:

    Bad news for me good news for u guys.
    My main email has been hacked Im going to bust out all my emails and FB and Twitter accounts just to make sure I figure this out so I know I can’t cancel my word press account but I’m done using this one.
    Trade well !

  31. Tony, I noticed that you still have “the big” III as green on your charts. Is that because; -and I quote you from your weekend update- “Then a break of the second level [1534] would turn our daily charts negative, implying a correction is underway.”? Thanks!!!

  32. Lee says:

    Bots got their 10 ..What u got ? Milk ?

  33. bdoalex says:

    Along with Russian Oligarchs, a good number of hedge funds use Cyprus(similar to the Cayman Islands) as a tax haven. I have zero clue if they park a large amount of funds there or they may just have feeder funds there as a pass through for tax benefits.

  34. Lee says:

    CL
    Im telling u guys…..

  35. kjb0 says:

    Not yet time for the big drop. The bull will run til the end of May and the high will be in. The bear will be making the charge after that. But what do I know.

  36. H D says:

    GM all 1547.50=.618 back

  37. Lee says:

    Nobody asked so here ya go
    ESM
    PP @1553 S1 @ 1549.50 S2 1545.50 S3 1538 (todays pit open )
    R1 @ 1557 R2 @ 1560.50 R3 @ 1568
    Just glad to be here

    • Lee says:

      S2 time and Pivot Time

      • Lee says:

        nap time ..ok guys i want to see actionable ideas and a few jokes and maybe a video when I come back here.

    • Young Tom says:

      Lee
      An actionable idea away from the markets. Ever been fishing in Northern Canada?
      Check out http://www.wollastonlakelodge.com it’s in Northern Saskatchewan.
      You need to get in shape first. Imagine catching (not fishing) 20-30# northern s all day long till your arms fall off. Food and accommodations world class.
      YT

      • Lee says:

        Hey YT
        Been there 2 x Largest Northern I caught was only 461/2 inches long 19 – 1/2 girth largest in our boa ever was 49 inches 22inches – 3/4 girth caught in the “Aquarium” . We flew out everyday on that old De Havilland Sea Otter with that grumpy/awesome bush pilot. U are right about fishing all day till ur arm falls off but with what they charge ud be silly not to.
        Kevins the big guy who used to run the show up there as he married the gal who’s father owned the place. They were living in Orland Park last time I talked to him.
        It’s by far THE best Northern Pike fishery Ive ever been to. The quides are a special group also. If ur single get up there as the gals who work there in the short season are very freindly:)

      • Young Tom says:

        Lee
        Your to much. Did you take a slide rule with you? Was too busy sipping Crown Royal and chasing with Labatts and Molson. Only had time to land em, weigh em, take pictures and return them to the depths. Biggest one caught on last trip was 32#s

      • Lee says:

        hahah No those guides did everything as u know..bunch of sissies with their glove on. Only time I toughed the fish was when we took a pic or shorelunch
        Labatts up there are the way to go

  38. Ronin I3 says:

    /CL want to retest 91.05. 93.85 is the stop…Pick your spot. if not happens before 8PM 3/20, get out.

  39. Lee says:

    Trade well my friends !

  40. Ronin I3 says:

    Lee! Your the other acct wouldn’t let me to post because it is closed. This is why I post a lot of crap there…Nothing personal! :)

  41. Ronin I3 says:

    GM all! What does this looks likely to form??

    H&S

  42. rc1269 says:

    Messing with deposits/depositors can have very unpredictable consequences
    that’s all i’m sayin’

  43. M1 says:

    “Mr. Anastasiades’s cabinet was meeting Monday amid fears that the European Union might have reached its “Lehman Brothers moment,” a reference to the chaos that followed the decision of the U.S. government to allow the investment bank Lehman Brothers to fail in September 2008″

  44. M1 says:

    …and where is the crash ??

  45. Lee says:

    Morn all

  46. dwr51 says:

    Tony
    I am not going to get involved in the discussion on Cyprus or other European policies. This pull back is very reminecient of the pull back we had in Feb of this year with a couple of differences that are a bit disturbing. What I see is all of the major indexes reversed in this time frame with the exceptions of the Nasd. and the Dow. So if the Nasd hits 3164 and the Dow hits 14077 we could be in for something stronger than Feb downturn. Not predicting anything but just some numbers to watch.
    All the best to you and thanks
    Dave

  47. CB says:

    hmm, in the meantime Fat Finger’s lawyer (Kerviel) dead…https://www.youtube.com/watch?v=SUFQHXxtKBk

  48. mokiepon says:

    Good Night, Friends. Wishing you all GL tomorrow! M

  49. CygnetNoir says:

    Now they’re selling gold as well, even as the decline in stock futures intensifies … time to party like its 2008, even if just for a day or two. What was that Kool and The Gang song, “Liquidate the times, come on!”

  50. pooch77 says:

    Mokie,whenever the snp crosses 80% on the 200ma chart it has always pulled back to at least 40% if not lower.I would be suprised if we move down to say 1500 area and we hit new highs.I am looking for 1400-50.Time will tell but that when i go back long401k,of course i am watching weekly stoch,rsi on spy also

  51. M1 says:

    Good to be in cash, but I am still expecting spx to hit new highs shortly.
    I wouldn’t be surprised if this small correction ends right after the market opens tomorrow.
    GL

  52. gary61b says:

    Tony, Excellent weekend update as usual, and it looks as though your right on for the retracement. Direxion, who is a leader in providing popular alternative investment solutions, including leveraged bear funds, announced on March 1, 2013 it will execute a reverse share split of its popular 3x leveraged bear fund (TZA), which aims to provide a 300% return inverse to the moves in the Russell 2000 Index. .

  53. uncle10 says:

    Just amazing how the news some how always matches up with the technicals and OEW.

  54. mjtplayer says:

    This Cyprus news is outright scary, the gov’t confiscating wealth, 8% – 10% of bank accts – yikes.

    Monday bank holiday, I’m sure the ATM’s are empty. Long lines at European banks on Tuesday. Germany has just said that Italy may be next. Well, here we go, the next round of the Euro crisis – outright bank runs.

    • mokiepon says:

      It’s just beginning to get warmed up. Wait until next year. BIG surprises in store. M

    • cicelyalaska says:

      If you read a little deeper, apparently there are more than a few Russian billionaires who stash their loot in Cyprus. I believe this is what the banks are really after more than the common citizens cash. However they can’t just justify it without taking a cut from all. Friends are not being made in Nicosia today.

  55. capi25 says:

    Tony Don’t you think the vix downtrending goes in the opposite of a pullback of the market.

    I have difficulty thinnking the market could go in the same direction of the vix

    Thanks

  56. budfox9450 says:

    In my view…the SP500, is extremely close to a top, or
    an extenstion, is in play for 1574. Do not like the pattern,
    of Fewer New NYY Daily Highs. Do not like, the XLI, or XLY.
    IBM, COST. CVX. FLT. PDCE all look like a top (to name a few).
    WTIC crest was in Feb, not at 94, getting overbought.

    Now – all of the above is in ref to the Intermedate W3 high taking
    place. Not at all, ref to the Major 3 high, or this market not going alot
    higher. Believe it is. But, it is time, for the Intermediate W3 top
    to become more visible….

  57. pooch77 says:

    Bad enough they only earn 1-1.5% on deposits then you pay 6.99% taxes to take money out.So why deposit? What will they do 1 year down the road if this worsens,tax them 12% ? Dig a hole in the ground and bury it

    • CB says:

      Sad and true, pooch. And later on, they could make digging holes in the ground illegal too, …

  58. Lee says:

    Thanks Tony
    Should be an interesting open this evening

    • tony caldaro says:

      Indeed Lee,
      Confiscating people’s money is a tax people do not appreciate

      • sdsteve says:

        No different than endless QE just a lot bolder…
        “Fair Value” should be around 1250 S$P for the first stop….

      • budfox9450 says:

        but, if you do not have extra money…..and your a growing majority….well?

        Heads up Shanghai. CCP just made a peope switch this weekend.
        Xiao Gang, lead of the Bank of China. Now, relocated to improving
        the Shanghai stock market and securities. For me, going to be an
        interesting signal in Shanghai, tonight….

    • Erka11 says:

      Interesting indeed …. so far in the currencies!
      Big gap down on many currency pairs. EUR is already down more than 150 pips and EUR/JPY more than 270. Funny how the trigger often comes from the most unexpected place. More staggering is the complacency here in Europe. Most think the ECB has successfully dealt with the crisis and fear is low even in the face of dismal eco numbers and social climate from most countries.
      Should be interesting to see if SP is able to recover during the US session from what should be a pretty ugly Globex opening in about 2 hours.
      Then again, no doubt they will open the floodgates of liquidity once again. How many times can they do that before people catch up and stop responding to the artificial stimulus. We do live in interesting times.

    • CB says:

      nice short call on Fri, EOD Lee.

  59. pooch77 says:

    Anticipating gains in haven markets, Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, said on Twitter that the concern in Cyprus “moves risk-on trade to backseat.”

    “Sell euro as well,” he wrote.

    • mokiepon says:

      Hi pooch. How you doing? Would you expect Gross to say otherwise? He’s a ‘bond’ guy. JMO. M

      • pooch77 says:

        Just posting quips out there,curious to see reaction of Euro,dollar equities tomorrow.Not a big Gross fan what seems to be an up and up type of guy

      • pooch77 says:

        “but seems to be an up and up type of guy”

      • pooch77 says:

        Mokie anothe quip…
        This came out from CNBC. “… Doug Kass of Seabreeze Partners on Twitter predicted European stock markets could fall 3 to 4 percent on Monday, while the S&P 500 could fall 1.5 to 2 percent and Spanish and Italian 10-year yields could jump 15 basis points….”

      • mokiepon says:

        pooch, we shall soon see if these predictions come true. I don’t do well with predictions, which I differ from a forecast. I don’t even believe spx MUST go to 1566 before falling back. It seems a though so many are absolute on this point. M

  60. 5wavemodel says:

    If we can move above 1565, it looks like 1608 is the next target. If the market falls below 1555, we could drop to 1530 before making the move to 1608. After that I think we could see a more substantial move to the downside than most people are expecting.

    Thanks,
    Steve

    http://5wavemodel.blogspot.com/2013/03/weekend-outlook-03172013.html

  61. 5wavemodel says:

    Thanks Tony. Great update as always.

    Steve

  62. capi25 says:

    Tony the point i’ve keep from ted’s video is every third wave in the past generate 1.618 of the pourcentage gain of wave 1 and not the point gain of wave 1
    Could you explain to me about it..

    Thanks Tony for your great work.

    capi25

    • tony caldaro says:

      Capi,
      While this may work out, historically it does not.
      The 1953 bull market was Int. i of Major 3 of the 1942-1973 Primary III.
      The 1957 bull market was Int. iii of Major 3 pf Primary III.
      They were equal in length.

  63. M1 says:

    Tony,
    What is the inflection point for this uptrend ? Would you accept an interm wave iv without a downtrend confirmation ?

    • M1 says:

      only a small correction ?

    • pooch77 says:

      Wow,just the idea they are considering this is mind boggling

    • mokiepon says:

      CT, not only is it a trend, but I think a near or actual depression in Europe, along with its’ POSSIBLE affect on China could be the catalyst for the Bear Mkt Tony speaks of, beginning sometime in 2014; JMO. Europe is in much worse shape than the media in this country reports. This is why I read certain blogs that post the news directly from Europe, reporting on how the populations are actually doing. You can bet Europe will be a major catalyst in whatever moves global markets in the next couple years. M

    • CB says:

      Thanks ctfp. Good to know. Certainly an important indicator of what’s to come…

  64. although I would love for your wave count to be the right one, I have a comment on your wave count regarding the SC. If SC1 lasted from 1932-2007 (75 years) wouldn’t be expected for wave SC2 to last at least 38% of wave SC1 relative to time. When counting waves we should not only take into consideration the percentage of the move but also the time it takes to unfold. Waves of the same degree usually should be proportional to each other relative to how much they last. We cannot have an impulsive wave that lasts 2 days and its correction only half an hour. I hope you get my point. That is the only remark I have to make for your wave count. I love EWT and I’m also struggling to find something positive in the longer term wave counts. I hope I did not offend you, but as I want others to comment on my wave counts and charts in order to improve, I thought I should have made this comment on your wave counts.

    • tony caldaro says:

      Alexandros,
      This is a good point.
      The only historical reference I can make, with actual data is the following:
      Cycle wave [3] 1942-1973 lasted 31 years, and was corrected in one year Cycle wave [4] 1973-1974.
      We could also use the 33 year Cycle wave [5] 1974-2007, if judged as a separate wave, which was corrected in two years 2007-2009.
      While symmetry is nice in the short/medium term, this is not so important in very long term waves.

    • Ryan Parker says:

      Was looking back at some of my old work regarding cycles etc. If we use Tony’s count that the bull market ended in 2007 it would make a lot of sense. I believe that the secular cycle ended in 2000 but due to extreme actions by the Fed it was prolonged into 2007. The market has also had a history of 33-34 year cycles between major turning points. 1896-1929, 1932-1966, 1942-1974, 1966-2000, and 1974-2007. Based on my prior notes the Dow rose 25 fold from the 1932 low of 40 to the 1966 high of 1001. The Dow also rose 25 fold from its 1974 low of 567 to its 2007 high of 14,198. With Tony’s count into 2007 this makes a lot of sense as cycle wave 5 from 1974 is equal to cycle waves 1-3 which lasted from 1932-1966.

      • Ryan Parker says:

        After reading Tony’s response I see that he counted the cycle waves a bit differently but I don’t think it is any coincidence at all that the % gain in the Dow from 1932-1966 was exactly the same as the % gain from 1974-2007. Coincidentally both 33-34 years.

  65. pooch77 says:

    Rumblings tonight n 6.9-9.9 % tax levy on bank withdrawls in Cyprus,parliment votes Sunday night.Wonder how Euro and dollar reacts on even the thought of this.

    • Chung Wang says:

      Saving robbed legally by government? :D
      Very significant impact to those countries who need IMF assistance in the future.

    • tony caldaro says:

      Bank holiday monday, while they debit the accounts.
      Banks reopen tuesday.
      And people were worrying about losing their gold.

      • kvilia says:

        Mind boggling. I agree with WP this could be very well a beginning of the final stage of the financial crisis. Remember, it’s all started with Iceland.

      • va89blog says:

        You wonder if this is the beginning of something worldwide as many of the TBTFs are effectively insolvent if forced to use normal accounting standards. Scary stuff for sure.

  66. Ronin I3 says:

    Hello all,
    I hope you guys had a couple good weeks trading. I enjoyed both Singapore and Taiwan. Both places are bustling with the economic activities, yet the poors are still struggling. The Big Zero is not too popular there, althought he is not mentioned much, but I have not heard anything good about him. Here are the links to a small part of the photo collections I gathered, and I hope you enjoy them..

    Singapore http://www.flickr.com/photos/69752877@N08/sets/72157633010915292/
    Taipei http://www.flickr.com/photos/69752877@N08/sets/72157633011140766/

    • Chung Wang says:

      I3,
      Thanks for sharing your travel experiences. I came from TW, by looking at your pictures makes me want to go back visit soon.

    • Lee says:

      I love the desert pics !
      Did u travel inland much ?
      Thanks I3

    • budfox9450 says:

      Great pic’s – thank you so much. So, that is what Singapore looks, a little like…wow.

      • Ronin I3 says:

        Singapore is all about food, and food in general is inexpensive if you plan your meals around the hawker centers (food court). Why have steaks when we have great steak houses in Chicago? Everything else can be expensive, for example, a tall SBUX coffee is about US$3.00.

    • Young Tom says:

      I3
      My favorite steak house in Chicago was Gene and Georgettis. Often when I frequented Big Jim Thompson, former Illinois Governor, always seemed to be there. He always had a booth with his back to the wall and two body guards posted in front of his table. If you want the same great steaks order from Allen Brothers, they provide the beef to this and many other steak houses, Welcome Back!
      YT

      • Ronin I3 says:

        Hi YT,
        I have never been to G&G, but I’ve heard good things about that place. Hmm, Thompson doesn’t want to be surprised so he sits facing the room. A good story, and thanks for sharing! :)

    • mokiepon says:

      Welcome Home, I3!!! Happy to hear you had a good time and have returned safe and sound. Thanks for the pics, they’re wonderful! Next week promises to be an interesting one, so you’re back just in time. M

    • CB says:

      I3, great pics! Thanks. Hey you made us all hungry (for better things in life). And you’ll need to teach us a little bit about taking pictures like that…really great shots..I bet it takes time to learn to do that well.. Liked ur titles, too….and that model from Taiwan…wow, so beautiful!!..so U said: “yes, she was looking at me.” OK, and then what happened?…lol…we need “the rest of the story” I3, OK?…you didn’t just leave her standing there, did you… : ))))

      • CB says:

        Oh, I3, and you didn’t miss much…mostly cats were sleeping with dogs…that’s what our guys were saying…and here’s our picture ;) http://screencast.com/t/2cE7k8g6c

      • Ronin I3 says:

        CB, I have a face only my mom would love..So, there I was trying to figure out what was happening, this model turned and looked my way. My involuntary reaction was to raise my camera and take the shot. I doubt she likes my look and that was just her model move. :)

      • CB says:

        I3, I’m not sure how to respond…U know whenever anyone says sth. like that, it means that they are very tough on themselves & inevitably also tough on those around them..so, I say to myself: wow, tough crowd…I’d hope that as we all mature we can become less critical of ourselves & of others..that’s the only way to live..also I3, don’t be so critical about spelling OK? I make a ton of mistakes & always hope ppl will “overlook” them.;) Lee was so nice to complement you on ur pics last nite & look how late it when he posted it …I myself didn’t even notice it..maybe cuz I actually Iove desert pics so much myself (OK i have to look at them, no choice there) …Maybe it was a Freudian slip cuz Lee likes the desert too…anyways Lee & all you folks if you also love the desert maybe you ought to “come out West and see the best” sometimes…seriously there’s lots to see in the desert, for sure,..even flowers sometimes. : )) OK, end of speech…& Im lovin what the yen is doing ..And, good timing, I3..you came back just in time for some green beer & some good market moves..thank Lee for that..he held things up for you :))

      • CB says:

        oops, compliment you on…..:) gee, I hope nobody noticed that… :P

  67. thanks Tony, great wknd updates last few weeks with fascinating stuff relating to the time cycles and GSC. I always like learning more about the “forest” we trek thru that has been developing longer term. Agree with the current uptrend high being near. Makes sense options expiration day would be close to the high. Plus the intro of “mini” options this week sounds like a classic short term high :)

  68. pooch77 says:

    Well FWIW after looking at 5 & 30 minute chart of spy looks like we could have a move down to 1555-56 area,if it breaks down to 1551-52 will have to see if it wants to break 1556 on a bounce back up if not maybe it turns down to test 1548

    • mokiepon says:

      TNA is NOT a stock! It’s a TRIPLE leveraged ETN which means it has the same decay factor as other 3X ETN’s and might not even be solvent in 5 or 10 years! If you’ve ever read the prospectus (which I have), Direxion can “call” it quits at any time and disperse the funds at that whatever level they happen to call it. Do you actually think Direxion could afford to pay out triple the amounts put in if even half the participants decided to cash out at the high you’ve figured?

      I use TNA frequently, but wouldn’t base a ‘stock’ forecast on it in 5 or 10 years. Personally, I hope you’re right and it proves to be fruitful and multiplies, but wouldn’t stash money in it for the length of time you propose, as that would be the only way you’d get the return you’re forecasting.

      M

      M

      • mokiepon says:

        Tony, although you are correct in your assessment of DDM, DDM and TNA are 2 slightly different animals and that slight difference makes all the difference. DDM might be leveraged, but it’s not a triple, and if someone had the good fortune to have found the bottom of this Bull run in 2009, DDM would have returned what you say it’s returned. What if their timing had not been so good? Still wouldn’t put money in TNA and leave it there, hoping for such a return in 5 to 10 years. No thank you! M

      • tony caldaro says:

        Triple ETFs are depreciating assets.
        Most will continue 1:10 splits until they hit zero.
        They are only for day trading.
        Double ETF’s, the good ones, track very well.
        DGP, the Gold double, did quite well too.
        They use the actual asset and get leverage from spreads, not futures.

      • mokiepon says:

        Tony, I agree. Unfortunately, Ted’s video was all about TNA, but I’ve made my sentiments known and am done with that. Other, lesser leveraged ETN’s and non-leveraged ETFs are great! M

  69. spike in volume due to options expiration day

  70. budfox9450 says:

    When – I am not thinking of the investment markets.
    I often think of – good food. Caught this list, might find useful.
    I know, when in a city, like Westchester to Chicago. I use this list.

    https://docs.google.com/spreadsheet/ccc?key=0AifLEJ6wk3r_dFkzU3RIVk96YnpFSlpnNWNoZ1FPeVE&hl=en#gid=0

  71. tony, great update! if we assume the 1566 as the Int’ III high, then a 4% correction -as has been suggested for the Int’ IV- would bring the SPX down to 1503, right in the 1492-1506 “target zone” of the previous minor 4…

  72. hooloo1957 says:

    Hi Tony, thanks for your work. I’m not criticizing because I don’t have anything better to offer but I was wondering how you can be so possibly confident of your grand super cycle interpretation. It sounds more like a fairytale. but who am I to say? Also along the same lines, the commodity cycle seems to be obviously falling short of the 2014 top. So what do we make of this?

    • tony caldaro says:

      The commodity cycle started earlier than thought: 1998.
      There was a miscalculation in the Gold market due to erroneous data.
      The FED, oddly enough, provided the correct data.

      In regard to the GSC. Explained earlier today to someone in Brazil.
      During GSC bear markets nearly the entire value of the stock market is wiped out, i.e. 1929-1932 89%.
      During Supercycle bears markets lose over 50% of their value.
      During Cycle wave bears 45%-50% of the market value is lost.
      All other degree bear markets are less.

  73. mokiepon says:

    Tony: ‘Supremely Excellent’ (as the kids would say) analysis! I’m so looking forward to int. v to increase my 401k. As you pointed out, 5th wave previously truncated, so I’m truly hoping, as you pointed out, since this is a 3 of 3 of 3, int. v is not likely to fail. M

  74. fbender7 says:

    Thank you for sharing your insights Tony. Great stuff, and communicated with real clarity; a lone voice in the wilderness of the EW blogosphere.

  75. budfox9450 says:

    Thank you, Tony. We are getting close to an Int 3 crest.
    My BoYu indicator, posed a pattern, which could turn into
    a confirmed crest. At the close Friday 15th. Of course, this
    risk – is an extenstion upward, too….

  76. gtoptions says:

    Thanks Tony, excellent weekend update.
    My observation of volume expansion in the Major Indexes on Friday tells me that a correction or trend reversal has begun or is very close. Any thoughts, criticism or comments are welcome. Have a great weekend.

    GT

  77. Erka11 says:

    Tony,
    When you say: “Primary I divided into five Major waves with a subdividing Major wave 1”, do you mean by opposition that all the other 4 Major waves somehow didn’t subdivide ? Then what happened to them ? Were they just straight lines Major waves with no Intermediate or Minor or Minute sub waves in between ?
    Further you mention: “Primary III is following the same path, but both Major waves 1 and 3 are subdividing into five Intermediate waves”. Why is that so noticeable? Don’t Major waves always subdivide in Intermediate waves and Intermediates waves subdivide in Minor and so on ?
    Isn’t wave subdivision the basic principle of the Wave Theory ?
    Then further down again, in the Medium Term section, you mention: “This uptrend is doing exactly the same pattern: five Minor waves with a subdividing Minor wave 3”. Which seems to imply that only Minor 3 is subdividing but Minor 1 and 2 didn’t ? Yet, when looking at your 60 minute chart, one can see that Minor 1 is composed of 5 Minute waves, which I think is a subdivision and, Minor 2 is made of 3 Minute waves, also a subdivision.
    Perhaps I don’t understand why you mean by “subdivision” because as far as your charts are showing, all your waves are subdividing in subwaves.
    I would appreciate your feedback on this.

    • tony caldaro says:

      Hi Erka,
      Major 1 of Primary I subdivided into five trends.
      Majors 2, 3, 4, and 5 of Primary were one trend each.
      Majors 1 and 3 of Primary III are subdividing into five trends as well.
      So far just Major 2 was one trend. Probably Majors 4 and 5 will be as well.
      These waves relationships are in regard to the weekly chart which displays all the significant waves.
      The other explanation is of the daily/hourly charts.
      Which displays all the not so significant subdivisions within each of the smaller waves.
      Correct, all impulse waves subdivide into smaller and smaller waves.
      cheers!

      • Erka11 says:

        Hello Tony,
        Interesting. So it is a question of terminology. You are referring to subdivisions in trends not in waves of lesser degrees. So I deduct that a wave which doesn’t subdivide in trends is more powerful than one that does. Hence your emphasis on your LT and MT section of the week-end update.
        Thanks.

      • tony caldaro says:

        Correct.
        Just look at Major 3 of Primary I.

    • nee123 says:

      Hi Erka, as far as I understand, Tony is not here to teach the Principle of EW Theory, if you are interested in learning the basic concepts, you’d take his tutorial program, or read the book “The Elliot Wave Principle” by Frost and Prechter or any other related materials.
      If you don’t want to spend money, you’d get the book online free:

      http://www.elliottwave.com/club/

  78. liborval says:

    Hi Tony. Is it possible that this uptrend can be as long as the uptrend from 1995-1998, just relentless one with sideways corrections. With all this QE I would not be surprise and we can wait for correction for 3 more years or untill QE is done.

  79. M1 says:

    Many thanks, Tony. Great update.!
    I am looking for the first resistance at 1566. (Minute v = 0.62 of minute 0-iii). I see you find this level quite important too (minor 5 = minor 1).
    What if 1566 is surpassed ? What would be your next target ? ( I will be looking at 1617 for Minute v = 1.0 of minute 0-iii.)
    Have a great weekend

  80. pooch77 says:

    A pullback starting Monday 30-50 points would be welcomed

  81. ladad says:

    Amazing insights. Thanks Tony!

  82. Pingback: Risk Reward Report – week 11 | The Risk-Reward Report

  83. rolandu11 says:

    USD ready for a correction? Tony, what do you think ?

  84. rolandu11 says:

    Have no medium term sell signal yet (My volume indicators stalled, overheating indicators improved little). My vólume indicators are not really ready for a sell signal, but 1 or 2 days with a considerably loss off abaut 1% can cause it. On the other hand a price movement as we have seen this week can postpone a sell signal. Of course my volume indicators give just a sell signal after a important or intermediate high not before.

    • Rolandu, Friday saw a big spike in volume among all indexes (e.g. SPX, INDU, WLSH, COMPQ). Could that be of significance?

      • rolandu11 says:

        soulsurferusa, possibly but normally not for my indicators. There must be a change in the structure of the (volume)behavior to affect my indicators. But of course that is possible and happened in the past frequently.

      • rolandu11 says:

        meant change in structure of volume on the day of opex towards the days before

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