weekend update


Quite a choppy week. After Monday’s SPX 1824 low we counted seven small waves between SPX 1830 and 1843. Net progress for the week was mixed in the SPX/DOW, the NDX/NAZ was +0.85%, and the DJ World index gained 0.6%. On the economic front positive reports remained in control. On the uptick: factory orders, the ADP index, wholesale inventories, the WLEI, long term investor Sentiment; plus the unemployment rate, weekly jobless claims and the trade deficit all improved. On the downtick: ISM services, consumer credit, monthly payrolls, and the monetary base. Next week lots of economic data, highlighted by the FED’s beige book, Retail sales, the CPI/PPI and Industrial production. Best to your week!

LONG TERM: bull market

With the unemployment rate dropping to 6.7% this week. It certainly looks like QE 3 tapering will probably be given a steady diet of $10bn per FOMC meeting throughout 2014. This suggests the QE3 program, which started tapering this month, will end by November. Should this be the case we should start looking for a bull market high, providing a complete five wave pattern appears, by August/September/October.


Since we are counting this bull market as a Cycle wave [1], we are expecting five Primary waves to complete when the bull market ends. Thus far Primary waves I and II completed in 2011, and a larger Primary wave III has been underway since then. Currently, both Primary I and III have been 26 months in duration. Primary I had a subdividing Major wave 1, a shorter Major 3, and quite a short Major 5. Primary III, however, as had a subdividing Major 1, a larger subdividing Major 3, and now a quite normal Major 5. We are still projecting a bull market high in the mid to upper SPX 1900’s by Q3/Q4 2014.

MEDIUM TERM: uptrend

We continue to count this uptrend as Major wave 5 from the August low in the SPX, and October low in the DOW. The trifurcation of the US major indices is the reason for the differences. We have counted an Intermediate wave one, from SPX 1627-1814, then an Int. two to SPX 1768. Intermediate wave three has been underway since then.


Intermediate wave one divided into five Minor waves as noted on the chart. Intermediate wave three appears to be doing this same thing. However, only Minor wave 1 has concluded at SPX 1849, and Minor 2 appears to be still underway from that high. When it does conclude, probably this upcoming week, Minor 3 should kick in to all time new highs. We have several potential targets for Minor 3, with 1884 and 1901 the most likely pivots.

We have been expecting the daily MACD to make a negative cross, which it did this week. Plus, the daily RSI to drop somewhat lower below neutral than it has thus far. Also, we have been expecting an extremely oversold reading on the hourly RSI (10) which has yet to occur as well. With all the choppy action recently it has been a day traders market. Medium term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1884 pivots.


Short term support is at the 1841 and 1828 pivots, with resistance at SPX 1849 and the 1869 pivot. Short term momentum ended the week overbought. The short term OEW charts have been vacillating since the year began, and are currently positive with the reversal level at SPX 1836.


After a post-FOMC Minor wave 1 rally from SPX 1768-1849 by year end. The market immediately started off 2014 in a Minor wave 2 pullback. Thus far it has been quite choppy, which is typical of a pullback. From the SPX 1849 high we can count three waves down: 1828-1838-1824, then seven waves up: 1840-1831-1840-1830-1843-1832-1843. The three down looks like Minute wave a, as noted on the chart. And, the seven waves up looks like a complete, or nearly complete double three Minute wave b. Noted with a tentative green label on the chart.

After Minute wave b concludes, which may reach SPX 1847-1849 if not done, a Minute wave c lower should end the entire Minor wave 2 pullback. Mostly likely support is around SPX 1814, with the 1828 pivot range on the high end and SPX 1800 on the low end. With retail sales Tuesday, the FED’s beige book Wednesday and options expiration Friday, it should be an interesting week.


Asian market were mixed on the week for a net loss of 0.8%.

European markets were all higher for a net gain of 2.2%.

The Commodity equity group were mixed for a net loss of 1.4%.

The DJ World index is still uptrending and gained 0.6%.


Bonds are still downtrending but gained 0.8% on the week.

Crude is also downtrending and lost 1.4% on the week.

Gold continues to try to confirm an uptrend and gained 0.9% on the week.

The USD is uptrending but lost 0.4% on the week.


Monday: the Treasury budget, surplus forecasted, at 2pm. Tuesday: Retail sales, Export/Import prices and Business inventories. Wednesday: PPI, NY FED and the FED’s beige book. Thursday: weekly Jobless claims, CPI, Philly FED, and NAHB housing index. Friday: Options expiration, Housing starts, Building permits, Industrial production, and Consumer sentiment. As for the FED: Senate testimony by Director Gibson on Wednesday. Best to your weekend, week and new year!

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

About tony caldaro

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151 Responses to weekend update

  1. Lee says:

    Tony , nice call amigo
    gto ,
    Happy New Year ! Technically speaking
    glad u buckled up
    beagles are cute and even some mother n laws are ,well done

    I have no idea why u feel the need to disrespect Tony and all others here but Bless ur Heart.


    • mcmasoniam says:

      Lee, any time Tony wants to remove my posts, he can, and I don’t believe that Tony ever said that 3 posts was the absolute limit. There are people whose opinions I enjoy. BTW, w/mkt closed, and since this is soon to be the old Update, I will just keep my chatter here… Except for a TY to Tony. Bless ur punkin heart.

  2. elmer510 says:

    Tony was right about the c-wave moving downwards, perhaps as low as 1814 and also about the timespan of minor 2moving into this week. Good work!

  3. blackjak100 says:

    Anyone else buy sub 1820 for a long trade?

  4. hucky2 says:

    Tony is the master – well done, right again.

  5. gtoptions says:

    Thanks Tony
    SPY ~ C=A @ 181.58 ~ Weekly S2 @ 181.34
    #3 GLTA

  6. rc1269 says:

    i never thought i’d actually utter the words, as the specificity of the pattern always seemed preposterous to me, but… the Dow really is starting to look kind of like a three peaks & domed house. more maybe more like a 3 peaks and then H&S. peaks 1,2,3 on 5/22/13, 8/2/13, 9/18/13, and now we’re rounding out the house.
    who knows. always seemed a little forced to me. but it looks interesting at least
    i think that’s at least three strikes for me today so i’m out. cheers -rc

    • budfox9450 says:

      Daily SO500 BoYu is now on a Sell signal.
      Weekly has turned down, but the critical Red
      signal line, has not confirmed the Weekly Sell
      indication. Monthly BoYu, looks weaker, but
      no confirmed sell signal.

      OEW’ call for 1818,to 1810 support is still
      very much alive, and I shall defer to Tony
      as to the strength of this decline being only
      a minor a-b-c down,….Bud

  7. Not intended to create panic…But, as said, S&P targeting 1800, then to 1820, then real panic starts…I wanted S&P to touch 1860 for better panic..but that did not happen…Now, hold your breath, S&P will touch 1576 in this down leg. sending Bernanke’s grand experiment for toss..Ben himself knows that his experiment has failed. If I am FED chief, and I am sensing success, I wont leave in two terms..Alan Greenspan did not leave as he smelt success…

  8. Ryan Parker says:

    Some interesting observations while looking back on history this weekend.

    October 1990- July 1998- Dow goes from 2,344-8,340 or 256%. August 1982-August 1987 Dow goes from 770-2,747 or 256%.

    Dow correction of 1998= 9413-7380 or 21.59%. Same as SPX correction in 2011 from 1371-1075. EXACTLY 21.59%.

  9. Tony nailed this one on the head. Kudos!!!vMy “contrarian” feeling was wrong. It’s getting pretty OS on the hourly RSI5 now…

  10. rc1269 says:

    Lee started posting again after a couple/few week hiatus
    for everyone who doesn’t know that means volatility is likely to pick up
    i’ve added Lee’s posting behaviors to my MIL indicator. my analytical toolset is getting robust

  11. 777daimon says:

    3’rd last post:
    this retracement is a joke, can’t scare a true bull ….12-14 points ??? :)))))))))))))))))))))))))))))))
    I’m completely relaxed. This is NOTHING!

  12. Lee says:

    To train by instruction and practice, especially to teach self-control to.

    Willingness to show consideration or appreciation.

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