weekend update


While the weekly results do not display much of a change in the four major US averages. The SPX did manage to make a new bull market high on friday at 1486, and the DOW came within 12 points of its bull market high at 13,662. The NAZ, however, is still about 2% below its bull market high, and the NDX about 5%. For the week the SPX/DOW were +1.1%, and the NDX/NAZ were mixed. Asian markets gained 1.8%, European markets gained 0.4%, and the DJ World index gained 0.6%. On the economic front rising reports outpaced declining reports 10 to 5. On the uptick: retail sales, business inventories, the CPI, industrial production, capacity utilization, the NAHB, housing starts, building permits, the WLEI, and weekly jobless claims improved. On the downtick: the PPI, the NY/Philly FED, consumer sentiment and the M1 multiplier. Next week , shortened by monday’s holiday, we get more housing reports and the leading indicators.

LONG TERM: bull market

After an interesting two months of the bull/bear inflection range, our historical analysis of early bear market activity paid off. We will be adding this analysis to our lesson plan. So that the next time the bull market wave pattern suggests a potential completion we can apply it once again.


The bull market we have been tracking continues to unfold. We have been expecting five Primary waves up from the Mar09 SPX 667 low, to complete a Cycle wave [1] bull market. Primary waves I and II completed in 2011. Primary wave III has been underway since then. Primary I divided into five Major waves with a subdividing Major wave 1. Primary III appears to be dividing into five Major waves, however, with a subdividing Major wave 1 and Major wave 3. Major waves 1 and 2 of Primary III completed in Q2 of 2012. Major wave 3 has been underway since then.

We have been expecting this bull market to top sometime this year. Probably in Q4. The minimum trends remaining, are first the completion of the current Intermediate iii uptrend, then after an Int. iv correction, an Int. v uptrend to complete Major 3. The next uptrend, after a Major 4 correction, would then be Major wave 5 to complete Primary III. Then after a Primary IV correction, a Primary V uptrend to end the bull market. In summary we still need to complete the following rising waves: Int. iii, Major 3, Primary III and Primary V. In regard to price: we still have a wide target range between SPX 1550 and 1700. As the waves unfold we should be able to hone in at a more specific level.

MEDIUM TERM: new uptrend highs

The current uptrend, Intermediate wave iii, began in mid-November at SPX 1343. This week it made a new high at SPX 1486, which is also a new bull market high. Int. iii is unfolding in five Minor waves. Minor wave 1 ended at SPX 1424 in early December. Then we observed an irregular abc Minor wave 2 flat, which ended at SPX 1398 in late December. Minor wave 3 has been underway since that low.


With Minor wave 1 rising 81 points, (1343-1424), we have been projecting Minor 3 should rise about 130 points, (1.618 x Minor 1). This suggests Minor 3 should top within our OEW 1523 pivot range. Then after a small Minor 4 pullback, Minor wave 5 should rise to the next OEW pivot range at 1553. At this point, probably in February, the current uptrend should end and an Intermediate wave iv correction should follow. Medium term support is at the 1440 and 1386 pivots, with resistance at the 1499 and 1523 pivots.


Short term support is at SPX 1471/75 and 1462/64, with resistance at the 1499 pivot and the 1523 pivot. Short term momentum has been declining from extremely overbought. The short term OEW charts remain positive from 1420 with the swing level now 1471.

From the Minor wave 2 SPX 1398 low, this market has only had one noticeable pullback on its way to friday’s high at 1486. Quite unusual for this market, but not unusual for a third of third wave. Despite this one pullback we have been able to track the smaller waves with some degree of success. We tracked a five wave advance to SPX 1468 and labeled that Minute wave i of Minor 3. Then after that one pullback to SPX 1452, which we labeled Minute wave ii, we have been tracking Minute iii.


Thus far we have been counting Minute iii rising in five Micro waves. Micro 1 completed five smaller waves up at SPX 1473. Then after an abc Micro 2 pullback to SPX 1464, Micro 3 has been rising in five smaller waves. Currently, from that SPX 1464 low we observe five smaller waves: 1473-1468-1485-1476-1486. Since Micro 1 was 21 points, (1452-1473), and Micro 3 is currently 22 points, (1464-1486), it may have ended on friday with the hourly negative divergence. If so, we could get a pullback tuesday back into the mid-1470’s. Best to your long weekend!


The Asian markets gained 1.8% on the week, and all are uptrending.

The European markets gained 0.4% on the week, and all are uptrending.

The Commodity equity group gained 1.3% on the week, and all are uptrending.

The uptrending DJ World index gained 0.6% for the week.


Bonds continue to downtrend, rising yields, but gained 0.2% on the week.

Crude continues its uptrend gaining 2.4% on the week.

Gold is again trying to establish an uptrend gaining 1.4% on the week.

The USD remains in an uptrend, from the December low, gaining 0.6% on the week.


Monday is a holiday in the US. Tuesday: Existing home sales at 10:00. Wednesday: the FHFA housing price index. Thursday: weekly Jobless claims and Leading indicators. Then on friday: New home sales. The FED has nothing scheduled for the week. Best to your three day weekend!

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

About tony caldaro

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48 Responses to weekend update

  1. tommyboys says:

    This 100 year DJIA chart looks ready for a new bull. The 70s sure look reminiscent of the 2000s. That spike drop in ’74 corresponds with the spike drop in ’08…


    • torehund says:

      Many folks Prechter included “sees” a motivated 5 wave structure down from 07-09- I see a complex abc. Thats what wrongfoots him, and the market.

      • mokiepon says:

        torehund: Prechter is first and foremost a degreed Psychologist. He therefore thinks he knows how others think and will act and never thinks he’s wrong; which is the worst kind of technician, but typical of Psychologists. If not this, then, it’s well known that sensational, Doomsday publications sell much better than those reporting good news. Conclusion: They’re making a bundle. Not as much as TV preachers, but a bundle nonetheless.

        I chose the wrong career. (Kicking myself now…)


    • rc1269 says:

      if ’74 = ’08 then aren’t we at an intermediate-term high and we’ve got about 7 more years of chopping to go before we start higher? what am i missing here?

    • cwallace90 says:

      tommyboys, this is not the 1970’s. That bear market was inflationary. This one is deflationary. We did not have a historic credit bubble in the 1970’s. We have one now, where the USD may very well be the most inflated currency in the history of man. Comparing the two is erroneous and dangerous IMHO.

      • mokiepon says:

        Agree with this, all except USD. I think Zimbabwe still holds the record.

      • tommyboys says:

        Just taking the high flight over the markets via the chart thats all. Not looking at inflationary vs deflationary -and yes this time it is deflationary. Just noting the chart similarities … 10 – 15 year resting periods with huge moves up and down yet netting a sideways market over the period with big bulls in between that can run 15-20 years or longer. ’70’s chart looks similar to the ’00s regardless of the inflationary underlying conditions…net flat setting up the next bull IMHO…The bull is just kicking off.

      • tommyboys says:

        Wallace… Sorry if you read more into my post than designed for… No one is more afraid of what “could happen” than I.

      • cwallace90 says:

        Hi Melinda,

        The Zimbabwe Dollar was “printed” into oblivion. The USD has been inflated by the credit supply for over 100 years. There is a very important distinction between the two. Currency sticks in the system, credit can implode. Since all of our money is debt, no debt=no money. It’s a highly deflationary situation, I would argue even more so than the 1930’s. At least in the 1930’s we actually had Gold on reserve. Now all we have on reserve is more IOU’s. It’s a house of cards.

  2. torehund says:

    London Sugar Futures – Mar 13 (LSUH3)
    Setting up for a huge pos divergence, back from spring 2010. I play it through PEIX as soaring sugar prices will divert sugar usage away from production of ethanol, paving attractiveness of corn/cellulose based ethanol. Shift is imminent.

    • mokiepon says:

      Very interesting. Thanks torehund.


      • torehund says:

        Corn ethanols perfect storm : 1) Low sugar prices, so that producers in Brazil have to sell their sugar for ethanol production ( Rogers sees sugar as the most depressed agri-commodity). 2) Rock bottom freight costs makes shipment of ethanol from Brazil to US viable. 3) Drought resulted in elevated corn prices.

        I am confident that all these above factors may reverse, and in adddition Oil could spike making ethanol very competitive. Nat gas should also have bottomed out making PEIX an attractive investments in the next decade. The 5 waves down in 5 dimensions, also gives confidence in owning this small cap.

        Melinda good luck to us and others if you decide to buy some !

      • mokiepon says:

        I think I might buy a pinch of it. Not much for commodities futures, but it’s so low in price, can’t hurt to experiement and expand my horizons a bit. Thanks again, torehund.


    • 7dayyss says:

      I’ve swing traded this a few times over the last two years. I think Harry Boxer has had this for swing trades also. It has made moves in the past at these levels. I’m undecided about oil though. Shale seems to be impacting price, maybe more so in the future, or at least WTI. I think if BP would of known the quantities involved/sweetness, they wouldn’t of OK’ed the Whiting Modernization of the Canadian heavy crude/tar sands.

      • mokiepon says:

        7days: I’m also undecided about oil and am skiddish of nat gas too (except to go down). Wish there was a more direct way to work Sugar… What the hey, it’s a very small position.

        torehund: Have you already bought this, or are you waiting until Tuesday?


  3. theyenguy says:

    You write, LONG TERM: bull market. After an interesting two months of the bull/bear inflection range, our historical analysis of early bear market activity paid off. We will be adding this analysis to our lesson plan. So that the next time the bull market wave pattern suggests a potential completion we can apply it once again. The bull market we have been tracking continues to unfold. We have been expecting this bull market to top sometime this year. Probably in Q4.

    I reply The Morgan Stanley Cyclical Index, ^CYC, traded by Global Producers, FXR, closed at 1,112, up 1.9% … The S&P 500, $SPX, traded by the ETF, SPY, traded up 0.9% this week to a record high to close at 1485 … The Russell 2000, $RUT, traded by the ETF, IWM, traded up 1.4% this week to a record high. These are all Elliott Wave 5 highs. Peak Stock Wealth was achieved January 18, 2013.

    The world cannot take on any more debt, as humanity passed through Peak Credit on December 6, 2012, when Total Bonds, BND, turned lower in value. The ongoing Yahoo Finance chart of closed end equities, CSQ, relative to closed end debt PFL communicates that stocks began to be unable to leverage higher over debt in September 2012.

    Now investors will be deleveraging out of
    1) Currency Carry Trade Darlings, EFA, seen in this Finviz Screener … http://tinyurl.com/a8cw3b7

    2) Global Producers, FXR, seen in this Finviz Screener … http://tinyurl.com/b6y6qr6
    ARMH, MAT, HAL, XOM, NOK, QCOM, MSI, FMX, IP, REGN, BHP, AA, SCCO, ABB, SAP, TEL, ITW, PHG, IR, ROP, FLS, EMC, DE, ITB, CAT, BA, ERIC, WHR, EXP, LYB, ARG, DIS, MKTAY, WOR, LPL, HNP, TSM, TTM, PPG, KUB, MHK, SYT, CELG, FBR, ASML, PFE, FWLT, E, MON, FXR, … Of note, Neowin reports Nokia slashes another 1000 jobs in Finland

    3) Liberalisms’ Beloved Investment Sectors, in this Finviz Screener … http://tinyurl.com/az4gxfk

    4) the Speculative Bankers which underwrote Liberalism’s Final Risk Rally, seen in this Finviz Screener … http://tinyurl.com/ap8uk9d
    BAC, C, BCS, LYG, RBS, SAN, DB, IBN, HDB, NMR, MTU, UBS, WF, CS, GGAL, BFR, BMA, BPOP, IRE, CHIX, SMFG, MFG, BSMX, NBG, JPM … Of note The Telegraph reports Lloyds and RBS need billions more capital, BoE says. Britain’s bailed-out banks need billions of pounds more capital to shore up their balance sheets and support the economy, senior Bank of England officials have warned.

    With the deleveraging, Great Depression II will commence. Perhaps one might enjoy a reading in my blog EconomicReview Journal, where I present that bible prophecy of Daniel 2:25-45, and Revelation 13 is unfolding, with a result that a Ten Toed Kingdom of Regional Governance, as well as a Beast Regime of Totalitarian Collectivism and Regionalism, is rising out of the financial and banking insolvency of the Mediterranean nation states, specifically the PIGS, Portugal, Italy, Greece and Spain.

    Perhaps, the week beginning Monday, January 20, 2013, will be the beginning of The Second Great Depression, as Mike Mish Shedlock writes Massive fraud in Spain threatens entire government of Prime Minister Rajoy. Eventually the lid off the pressure cooker in Spain is going to blow sky-high. Whether or not this story is the spark remains to be seen.

    One should consider dollar cost averaging into a physical possession of gold, that is in gold bullion, as well as an investment in trading at BullionVault as the Telegraph reports A new Gold Standard is being born. The chart of the gold ETF, GLD, shows that it is entering into a consolidation triangle, from which it will break out higher very soon.

    Perhaps, one might enjoy my current article … The Debt Doom Loop Closes In On Europe … A Financial Apocalypse Is Coming Soon … is … http://tinyurl.com/a3xs7ob

    • mokiepon says:

      Yenguy, I’m curious if you can name the 7 (to date) of the 8 heads (Empires) of the beast, as referenced in Daniel?


    • mokiepon says:

      YenGuy, if you choose to answer my question, let’s take it off forum so I don’t ruin Tony’s blog. Attach the link to your answer and I’ll go there.


    • tommyboys says:

      “Apocalypse is coming”…sure is – just not now. Soon enough however.

    • robslob64 says:

      Man has been predicting the “end of mankind” since the beginning of it…

      Live how you chose but do not expect others to do the same.


  4. 2 face longs today, 2013/01/18, were +0.34% , 2 face shorts were down big today, -1.31%, that is, profitable by 1.31%.
    to date longs from 2013/01/11 are profitable by +0.32%, 2 face shorts from initiation date of 2013/01/09 are profitable by 3.82%.

    profit for the 2 faced longs and shorts is + 4.12% while spy is +1.62% since 2013/01/09. we aren’t including the first 2 days of long’s profits which were scrapped for a better algorithm.

    the short term qqq system is currently at +8 (scale is -10 to +10) buy at +6, short at -6. the middle area of -5 to +5 is the gray area where trading skills come to play by possibly closing out either a long or short trade at 0.
    again, i reiterated that this system is a work in progress. .
    the qqq system is under construction and is currently used by me as a market guidance system more than an actual trading system; i for example will not initiate more than an inkling of new shorts if the system is at +6 or higher. i will track it’s buy and sell signal for possible use as a trading system in the future.

    the heaven and hell long term crash system as at +8 today, scale is -10 to +10, the rare but quite reliable -10 signals an impending crash is in range within days.

    The short term smart money indicator for longs is a sentiment indicator with data distributed over a scale of -10 to +10, although it rarely registers the extreme scores of -10 or +10. At a smart money score of -9, I definitely wouldn’t want to add longs and typically it would be in sound policy to commence closing long positions, especially the weaker holdings. The smart money indicator is currently at -9 and has been in that area since 2013/01/02, about the time I began to liquidate longs.

  5. ko68 says:

    Thanks Tony! Stupid question i guess, but how could the the bear count be eliminated if the SP500 makes a top in the 1536 area which is the low in your target range? The upside is really limitied, only 3,5% from fridays close.


  6. mokiepon says:

    Tony, GREAT Update, as usual. I don’t think I’ve ever read a better analysis! Can hardly wait to see this all play out.


  7. Tony, you haven’t done a SPX bull market projection update in a while. With things clear now, do you have any update on that? Thanks.

  8. dmlword says:

    Tony, it’s been a while since I have posted here. Hope this email finds you well. Attached shows we are near the top of a massive bull flag (orange). Let me know if on your radar. God Bless

  9. budfox9450 says:

    Tony – very concise/complete wave analysis. Thank You…..

  10. thegrowthinvestor says:

    Great post Tony, very informative as always.

    Here is my view on global macro:

  11. kjb0 says:

    Thanks Tony,
    Thats alot of waves to fit in there by August.
    It’s downhill after that.

  12. pw says:

    Thanks Tony. I don’t recall seeing it in a post, but can we assume the the alternate bear count is dead?

  13. rolandu11 says:

    Thanks Tony,

    o.k., apple hit by bad news/WSJ-article and money flow worsened somewhat.
    But I think the 500 level was important for the expiration of options because it was very good for writer.
    In my humble opinion apple must jump over the 510 level at least soon (If you think as a bull).
    The quarterly report will probably bring the decision.

    How looks the NDX with the long-term volume indi after apple and intel (Friday) slump?


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