weekend update


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.


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.


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 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.


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!


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.


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%.


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

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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

  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:

    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:

    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
    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:

      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.

      • 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:

        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! 🙂

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