friday update

SHORT TERM: pullback continues, DOW -185

Overnight the Asian markets lost 0.1%. Europe opened lower and lost 0.2%. US index futures were lower overnight, but the market opened two points above yesterday’s SPX 1722 close. In the first few minutes the SPX hit 1725 then began to pullback. At 12:30 FED governor Tarullo’s speech was released: The pullback continued into the afternoon until the SPX hit 1709 at 3:30. The slight bounce ended the day at SPX 1710.

For the day the SPX/DOW were -0.95%, and the NDX/NAZ were -0.40%. Bonds gained 3 ticks, Crude lost $1.00, Gold dropped $37, and the USD was higher. Medium term support remains at the 1699 and 1680 pivots, with resistance at the 1779 pivot. Last night the FED reported a new high in the Monetary Base: $3.546tln v $3.466tln. Today the WLEI was reported higher: 54.5% v 54.1%.

The market opened higher today, like yesterday. Then pulled back for most of the day, just like yesterday. No-taper euphoria gone already? The pullback from early Thursday’s 1730 high is now the largest one since the SPX 1641 low. This looks like an Intermediate wave iv pullback. It is already equal in length too Int. ii’s 21 point pullback. Since SPX 1710 was the breakout level, it should offer some support. But a pullback below SPX 1700 is also possible. After this pullback concludes the market should rally to new highs in Int. wave v.

Short term support is at the 1699 and 1680 pivots, with resistance at the 1779 pivot. Short term momentum hit quite oversold today. The short term OEW charts remain positive with the reversal level now SPX 1702. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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98 Responses to friday update

  1. student8888 says:

    Tony, are you counting Int. i of Major 5 five waves consisting of 1641-1628-1651-1633-1661 from the 1627 low? Thanks.

  2. HI all,

    I was looking for a way to share my wave counts on few stocks, Hence I created a facebook page here is the link – . Currently posted wave counts on apple, Microsoft, intel, google, royal bank, CISCI.

    Looking forward for your comments.



  3. lunker1 says:

    I think we need to set up EWLO golf tourney in the Fort Myers/Naples area. I’m here 😉 GR is on Sanibel. Lee said he was coming down. CN and HD play golf. Probably many guys do. It sure is nice here in the Winter 😀

  4. HI tony,

    Tough market to trade, But my view is that we might have seen the top for the rally from 1628, here are the reasons-

    1) Major top occur around fed meet day.
    2) Most of the time 5th wave has been truncated wave
    3) Bear traders keep waiting to see divergence, but market turns around surprising the bears.

    For a new high, we need a +ve catalyst, thinking what could come at this point? For -ve, There are lot of catalysts.



  5. Big Up! says:

    Two things: First, wordpress has not been very kind to me today. It took forever to log in, and it still will not let me access my account to change my display name to Big Down! I will likely make an appearance this weekend in a new name that will be logged in from Twitter (Lee says its what all the cool kids do:) ). You will know its me, ’cause I’ll be the one wearing the juarenbuffoon’s “Trader of the Month” award pinned to me puffed out chest. “CN” has lasted almost two years, I think, which is about as long as most of monikers have lasted around here, more or less. So hey, I just got a new wedge for my golf game, why not a new anonymity for my net shenanigans, right?! What will it be? I can’t say, but I assure you it will be a fitting pseudonym for a piker such as I!

    Secondly, and speaking of wedges (did I mention my new Mizuno MP-T4 56* with 10* of bounce? It’s the shitzle, let me tell you!), I have been looking at this SPX all night (all my life, it seems) and I wanted to put this out there as an alternative wedge to the wedge we’ve been discussing the last two weeks. The wedge as we’ve outlined it would be complete this week at 1730, with a decline underway that would, I presume, become Major 4 of Primary 3.

    Anyhow, it comes to me that what if Major 3 actually topped not this week, but back in May? And what if that 1687 – 1560 was Major 4? Then might 1709 not be intermediate a, 1627 intermediate b, 1730 intermediate c, the current decline targeting intermediate d, probably somewhere around 1660 – 1650, depending on how quickly it drops, and then another rally to 1740-50 to finish intermediate e or Major 5 of Primary 3?

    I’m just putting it out there. As I am a bottom 5% Elliotician, take it with as little, or as much, of whatever you like, as you like.

    Here is the link to a chart which may be used as a visual aid, fish wrap, toilet paper, or a pleasing desktop background. Regardless of which is what and what the what, I think this decline continues until the market does something to say it is ready to go back up.


    The piker formerly known as cygnetnoir, aka CN, aka BigUp, aka Lunker’s Best Bud, aka all kinds of things that have been muttered beneath the breath of those who wish me ill (I love you all, each and everyone of you)!

    • 16golfer says:

      CN….that wedge sure looks possible to me. Two closes at the low of the day looks to be fulfilling your “Big Down” call. Monday will be telling and I’m hoping for a gap up before it heads on down. I’ve been calling for 1750 for quite some time now, but it might be November before it gets there according to your wedge…..Thanks for sharing!

      • Big Up! says:

        Unless this market surprises us all, 16g, I think your 1750 comes to fruition before we have a bear sighting. Have a great weekend!

      • Big Up! says:

        It seems to me that this isn’t the first time I plagiarized your stuff, Steve! lol Thanks for pointing that out. It seems that right now, regardless of what we call it, you and I are more or les in agreement with Tony as to the Big Picture, and as always, what is up in the air is the exact road we take to get there.

        By the way, I plagiarized my Big Picture from Tony – credit where credit due 🙂

      • Nky says:

        Thanks CN for taking so much effort sharing your insights with us. I appreciate & enjoy your contributions very much. Btw, as far as I can see, no one here has wished you ill; although mis-communication surely happens once in a while.
        If you count May top as Major 3, it seems to me there wasn’t enough pullback for Int iv, so if we are going to have the wedge, I’d prefer this count posted by AndySignal a couple of days ago, which looks great so far BTW (BJ has been proposing the same count as well),
        This would suggest 2 more uptrends after the wedge is done, so I’d rather take Tony’s count- we are in Major 5 & likely near the end of Primary III already.
        PS: I’m a bottom 0.000005% Elliotician so what do I know.
        Have a great weekend to you & ALL.

      • I have been using a version of your channel chart as well. You have an interpretation as the W5 top in May. To me, that was the only time we broke out of the channel, and it led to the largest corrective decline of the year. Every month except June, we’ve touched the top of the channel. Might be, the cycle wave guys and their equity cycle timing have nailed this. Below is my amateur version of it:

        Take a look at the days between the cycle lows from the November low:

        15 Nov 2012
        28 Dec 2012…46
        26 Feb 2013…57
        18 Apr 2013…51
        24 Jun 2013…67
        28 Aug 2013…65

        If we project low-to-low, based on the pattern, we see the next one at Oct 13-Nov 03, which is 46-67 days from the August low.

        15 Nov 2012 1343
        28 Dec 2012…1401…58
        26 Feb 2013…1485…84
        18 Apr 2013…1536…51
        24 Jun 2013…1560…24
        28 Aug 2013…1627…67

        If we project low-to-low, based on the pattern, we the next low at 1651-1711.

        Now, if I look at the channel chart, and draw the line through the Dec-May-Aug bottoms, by Nov 1, the intersection is 1690, which is in the band for the calculated low.

        It’s been working all year, why not one more time?

        As for a top in the 1750’s, hmm, why not end on a trader’s 3,7, or spot roundie? Maybe a break of 1730 takes us to the 1770 pivot area.

      • CB says:

        Great calls, Steve. Thanks!

    • lunker1 says:

      CN what browser do you use? Have the current rev? Clean out your cache and cookies? Have the current rev of Java?

    • perversionofthemean says:

      Thanks! And, isn’t there a trendline from a lower low that connects with yours, thus supporting yours?
      Now, if it’s a 5th, does your high have a fib multiple relationship to major 1?

    • student8888 says:

      CN, are you currently on the short side given today’s price action?

      • Big Up! says:

        I’ve been short since 9:37 AM EST on 9/19/2013: The price action overnight 9/18-9/19 with the failure at the open to garner enough buying interest not only to test the overnight 1726.75 high but also to stay above the 9/18 NY session ESZ high at 23.25 gave the indication to go short. Yesterday’s price action triggered a Big Down. My target for this Big Down is 1560;however, this is not nearly as unambiguous a situation as was the Big Up from 1627 – 1730. I do think that SPX tests the 1680 pivot before it attempts new highs, but even that is not nearly as certain a conjecture for me as I would like.

    • hucky2 says:

      Why not start the a leg back in May?

    • kloutt says:

      sure does look like a wedge

      if it is a ending diagonal once point E is reached we could see some overthrow then a break down to point B 1550 very close to a previous tonyC forecast

  6. Leetired says:

    Thanks Tony

  7. torehund says:

    Some Wonder why the market doesnt turn Down, and why Bernanke isnt tapering…and the answer is pretty simple; its Our ingrained scepticism, fear and reluctancy towards undertaking risk that impedes the economic recovery, (or more accurately lengthens the bullmarket).
    There are heaps of pessimist yet to recruit and the holders are of a stubborn breed let alone any overwhelming Natural disasters.
    Bernanke needs a real bull to trust his spear into, not a lame indescisive and fearul one. As of today that kind of a bull is nowhere to be seen. And without a real bull there can not emerge a trustworthy bear, that is easily understandable.
    Will the real uninhibited bull emerge, and when; YES it always do but it is not easy to pinpoint. Whats obvious is that Bernankes sword of Damocles will delay the real bull from emerging, and therebye delay the frothing bull from beeing transformed into a bear.

  8. I think next week SPX pull back 1640-60

  9. pio27 says:

    Mr C
    I never get a chance to thank you for your work. off topic here is my opinion I think the market chokes worse than your Cards did during the NLCS last year. I think we get a 15 % correction so look for a count that works with that. Enjoy your weekend

  10. In the weekend report, we postulated that the Bernanke Bounce may turn into the Bernanke Top, if history repeats. Yesterday, we gave 1718 as the pivot and 1709 as an objective. We were off one handle on the pivot, as it acted as support +1 at 10:12 and as resistance -1 twice during the lunch hour. 1709 was a Tomahawk precision strike acting as support twice, while scattering black hats on the ground.

    Before we get all excited about what we saw, let’s ask ourselves what happened. Today, SPY went ex-dividend. So, anyone who was in it for that event was out of it at the open. Quadruple Witching proved a non-event in the ES as only 23k Sep against 1.7k Dec minis traded, meaning, the roll had already happened earlier in the week. Relief rallies lasted less than twenty minutes for no more than a 2-3 handle gain. Traders forced to buy when caught off-sides on Wednesday, sold into pockets of strength at least nine times throughout the day.

    So what does this mean for the wave structure: Tony has int 1-2 at the Jobs Friday ninety-minute reversal 1661-1640. Currently, we’re twenty handles down from the recent high, 1729-1709. 1709 is also the last recent high from August 2nd. Does that mean W5 int 1-2=3-4, and that we should go long on the negative divergence on the fifteen and thirty minute charts? Is the previous resistance now support?

    Last year’s Bernanke Top analogy has served us well so far, so, let’s crack open that playbook. Last year, we spent four days consolidating and testing the Bernanke top before we saw a volatile Thursday and then an eleven digit decline on Quadruple Witching, 1466-1458. The following Monday saw a dreadful eight handle gap open down then a morning recovery to unchanged, Tuesday saw a trend day up towards the Bernanke top, and Wednesday saw a double-top leading to an outside day, which took us the 30’s. From there, we trade a range 1470-1430’s until Nov Elections.

    This year, the nearby gaps are:

    1703-1714, FOMC Announcement
    1688-1703, Larry Summers weekend withdrawal
    1671-1680, John Kerry Syrian gaffe, opens door to Russian Diplomacy

    1669 was the top of the previous W4 b-wave.
    1709 was the previous all-time high.

    Thanks for the history lesson Mr Squirrel, but what does this mean for us this year? For the shorts, the Bernanke top needs to be retested. For the longs, closing the gaps down below will remove obstacles and prove to be the pause that refreshes. The Bear case sees an immediate retest of the high. The Bull case seeks support down below, somewhere between 1702/1688 and then a move up to the all-time high. Whether we test the high before establishing a short-term low remains to be seen.

    The bulls need time and a loss of altitude to put the Fed Chair, Syria, and Taper back onto the table. Without the wall of worry, bulls are dead in the water. Until then, look for nearer term catalysts of German Elections and US Government Shutdown to dominate, and provide cover to keep money on the sidelines. Expect the underperforming PM’s to continue chase MoMo to all time highs, eg FB, TSLA. Expect the typical quarter end shenanigans range trade rather than a breakdown or breakout.

    Having said that, what do I know? I thought we were correcting over time 70 handles from the highs.

  11. Ryan Parker says:

    Still targeting 1128-1134 on the Russell 2000. Similar level is ~10,400 on the $DWMI.

  12. ps: I noticed that
    1) Int. Med. i may have been 34 points (1628-1662)
    2) Int. Med ii may have been 21 points (1662-1641)
    3) Int. Med. iii may have been 89 points… (1641-1730)
    4) Int. Med iv may have been so far 21 points (1730-1709)… next is 34 points, which would bring the SPX down to 1696…
    5) Length of Int. Med. v ???? often v=i, but can also be 0.618xi or any extension.

    Btw, where have I seen those numbers before… ???? 😉 1,2,3,5,8,13,21,34,55,89,… Oh yesss, the Fibionaci sequence. Omnipresent!!! 🙂

  13. Tony, you mentioned today “We are considering an alternate bullish count”, will you share this with us during the weekend update or keep it on the back burner until the market decides it is the right count?

  14. I am reposting my post from early Friday morning and Tony’s response to it since some people still do not appear to understand what Tony meant by “Major V will be one trend”. Also the original post was buried pretty far down in the blog and most people probably didn’t see it:

    georgeschaeffer says:
    September 20, 2013 at 5:40 am

    I think that maybe Tony means that Major 5 will divide into 5 intermediate waves, but the intermediate waves will not subdivide into minor waves.

    tony caldaro says:
    September 20, 2013 at 7:36 am

  15. kloutt says:

    here is the chart i posted earlier ….ES closed on 1704ish which is rising channel support at the mid line of our UP channel the blue line/dotted red line …..august 2 support hit and broke at 1709

    TF finally sold off and of course i was stopped out after being chopped up !!! sigh!!!!

    • kloutt says:

      i subconsciously had a black price line drawn on the close …. drew that yesterday its the august 2 high on the 60min chart …..ha !

  16. Every one can update gold ?

    • kloutt says:

      here is my YG gold chart

      we have had an abc down to complete the A wave of a larger abc correction

      we r now in the B wave up ….note the 50 BACK (50% retrace of a move) zigzags do that allot

      so in conclusion i guess i see another wave up to complete B wave then a MAJOR DROP in C wave

    • mjtplayer says:

      Gold headed for sub $1,200 but don’t think it will break $1,000. Between $1,000 and $1,100 I would back-up the truck.

  17. Hi Tony, For EW students and market observers, your blog is a great resource. Just want to say THANK YOU. Have a great weekend.

  18. M1 says:

    The lenght of this correction is already larger than the supposed interm wave ii. Check the dow charts.

  19. Thank you, Tony. Great analysis, as always! Your OEW club awaits your Saturday morning weekend update. So delicious! Hope you, too, enjoy yourself, Tony.

    • tony caldaro says:

      looks like just me and you for coffee this weekend

      • Don’t kid yourself, Tony — watch your blog tomorrow morning. 😉 MANY are lying in wait. You’re adored.

      • 16golfer says:

        I’ll be there too!

      • alexhartley1 says:

        I am always there waiting. It’s true though that I would most likely not be drinking coffee at this time but the weekend report goes just as well with a beer in HK.

        FWIW: I see weakness in the market into the 24th before a rally higher into early October. I would imagine CN will be proved correct with his ED target or Tony’s 1779 target though it would require another big gain in a short period of time as I see the potential for a larger move down (P4 if we’re not in the more bullish cycle and therefore still in M3 of P3) starting in early October.

        There should be weakness from early/mid Oct through early Nov most likely. In line with Major Bradley Turn Indicators (not always proved correct admittedly but they can assist in providing a rough road map – 9/10 and 5/11).

        In line with January providing a P5 top there is another turn 2/1/14 but if it’s the more bullish scenario I’d imagine more chance of April 14 like has been mentioned here before though I guess some see it stretching it out to 2015 but that’s too far for me.

      • alexhartley1 says:

        Sorry I should say 1779 pivot not necessarily Tony’s target for this wave up. Thanks

      • Ryan Parker says:

        Don’t kid yourself. Plenty of people are still having coffee on Saturday morning wondering what you have to say. I’ve been around quite a while and you have been far more accurate than anyone else I have ever seen in my career. Right now doesn’t make much sense to me either but we are living in very unconventional times of monetary policy and the end result is an unconventional equity market. Seeing these stocks like TSLA, LNKD, FB, etc. do what they are doing now sure reminds me of 1999-2000 when I had a job as an intern at a brokerage firm. Actually it has felt that way for most of 2013. But back then people were quitting their jobs to daytrade internet stocks. Don’t see anything like that but valuations are awfully stretched. I’m not exactly sure where the market peaks but I’m still targeting March/April of 2014 for now and believe the market will be in for some rough sledding from 2014-2016. Always two lows in a bear market, nominal and valuation. We got nominal in 2009 at 667 on the SPX and now we just need the valuation low. Market would have to fall 50% from here to hit valuation lows seen in previous secular bear cycles.

      • walkerjb says:

        Tony, Im there with folgers in hand! Looking forward to it!

      • TC,
        Been in the biz 30 years. You are the best I’ve ever seen. Cheer up man, we are here because and for you!

      • Nky says:

        hate to ruin a potential romance, but you won’t be left alone with that nice gal;)

  20. lunker1 says:

    Super job with everything Tony. This blog is by far the best. Amazing collection of talent here.

  21. Hi tony , can you update gold
    Thank you

  22. Looking at the SPX Weekly chart it looks like a diagonal triangle is forming.

  23. llerias7 says:

    Supose that Int. V have 1779 as the upper limit…

    • jparkins10 says:

      IMO, only if it takes some time to complete, otherwise the T/L from 2009 will cap it around SPX 1740-50 (hasn’t been broken yet)

  24. torehund says:

    a possibility to consider doing EW on the rsi, the A was too short compared to the C so if they will be of Equal length, then maybe one more higher high ? its highly speculative, but what the heck, all stones to be lifted.

  25. alexh110 says:

    Thanks Tony.
    Just wondering whether the recent changes in the count have brought forward your time projection for the end of the bull market? You now have Major 5 in its latter stages, and Primary V’s can sometimes be titular. Could it all be over by Christmas?

  26. 16golfer says:

    Thanks Tony!

  27. thanks for the update tony, and the market is back to square 1… fantastic

  28. cyassin says:

    Thank you Tony ! Be sure at least 99% of your followers have a ton of respect for you and really appreciate your unique analysis and expertise! Have a peacefull evening Tony 🙂

  29. budfox9450 says:

    Have comfortable weekend, Tony…

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