weekend update


The market opened the week with a rally to new highs by noon Monday. After that it tested and retested the 1841 pivot four times, day traders delight, with the last test Thursday morning. Then the market hit an even higher high on Friday, before again selling off again. For the week the SPX/DOW were +1.30%, the NDX/NAZ were +1.00%, and the DJ World index was +1.00%. Economic reports for the week were again slightly biased negatively, for the fourth week in a row. On the uptick: Case-Shiller, the FHFA index, new/pending home sales, the Chicago PMI, and consumer sentiment. On the downtick: consumer confidence, durable goods orders, Q4 GDP, median new home prices, the WLEI (4th week in a row), the M-1 multiplier and weekly jobless claims were higher. Next week we get reports on the ISM, the FED’s beige book and monthly Payrolls.

LONG TERM: bull market

Last week we discussed the wave relationships the NDX/NAZ and the SPX/DOW had over the past, more or less, 30 years. The patterns that have unfolded during the past four bull markets and, now the fifth – this one. To recap, the NDX/NAZ have two more uptrends to complete before they can top in a Primary wave III. This suggests Major wave 5 of Primary III in the SPX/DOW will subdivide. Just like Major waves 1 and 3 of Primary III. Nothing out of the ordinary. Just something unexpected considering the characteristics of this bull market. Which has been weak and short fifth waves.


We continue to count this bull market as Cycle wave [1] of a new multi-decade Super cycle bull market. Cycle wave bull markets unfold in five Primary waves. Primary waves I and II completed in 2011, and Primary wave III has been underway since then. During Primary I’s five Major waves, only Major wave 1 subdivided. During this Primary III, it appears Major waves 1, 3 and 5 are all subdividing. Not unusual for a third wave. What is unusual, is that this market is already about 20% above its previous 2007 all time high. And, we are only in Cycle wave [1] of a five Cycle Super Cycle bull market.

MEDIUM TERM: uptrend

With the SPX/NDX/NAZ in confirmed uptrends, and the DOW only points away from confirming, we can now count the January SPX 1851 high as Intermediate wave one, and the February SPX 1738 low as Intermediate wave two. Intermediate wave three has been underway since that low. There is about a 20% probability that the SPX 1738 low was a Minor a, and this uptrend is Minor b, of an irregular a-b-c Intermediate wave two. We give this a possibility since the DOW has been lagging quite a bit. The SPX/NDX/NAZ have already hit new bull market highs, and the DOW has not.


We reviewed the long term count, and wave relationships, of Primary III to get an idea of where Int. three should end. If the probabilities hold up, Intermediate wave three underway, and the market characteristics hold as well. Then we should expect an Intermediate wave three top in May/June around the overlapping OEW 1962 and 1974 pivots, or the 2019 pivot. Naturally if this uptrend is only a B wave, then the timeframe will move further out. But the pivot ranges should remain about the same. Medium term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots. We dropped the 1884 pivot since it no longer applies to this wave structure.


Short term support is at SPX 1851 and the 1841 pivot, with resistance at SPX 1859 and the 1869 pivot. Short term momentum ended the week around neutral after getting extremely overbought on Friday. The short term OEW charts remain positive with the reversal level now SPX 1852.


The current uptrend can again be counted in two ways. Thanks to the continued volatility over the past week. We can count a clear five waves up to SPX 1848, a pullback to 1825, as Minor waves 1 and 2. Then a series of subdividing smaller waves for the early stages of the next five waves up of Minor wave 3. This count remains on the SPX charts and has a 50% probability.


We can also count again, five waves up to SPX 1848 to complete Minor 1. But now the pullback to SPX 1825 as only Minute a, of an irregular a-b-c Minor wave 2. This count suggests Minute b may have topped at SPX 1868, or slightly higher, before Minute c drops to around SPX 1825 to complete an irregular flat. This count is in green on the DOW charts and has a 30% probability. The count in red is the 20% probability count noted in the medium term section.


The Asian markets were quite mixed on the week ending only slightly positive.

The European markets were mostly higher gaining 0.8%.

The Commodity equity group were also mixed and lost 1.3%.

The DJ World index is uptrending and gained 1.0%.


Bonds continue to uptrend and gained 0.5% for the week.

Crude continues its uptrend gaining 0.3% for the week.

Gold has run into a negative divergence in its uptrend and lost 0.3% on the week.

The USD continues to downtrend losing 0.6%. But is getting close to a long term low.


Busy week ahead economically. Monday: Personal income/spending and the PCE at 8:30, ISM manufacturing and Construction spending at 10am, then monthly Auto sales during the day. Wednesday: the ADP index, ISM services and the FED’s beige book. Thursday: weekly Jobless claims and Factory orders. Friday: the monthly Payrolls report, the Trade deficit, and Consumer credit. Tuesday: FED governor Powell testifies before the Senate. Let’s hope the upcoming week will be a bit less volatile. Best to your weekend and week!

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

About tony caldaro

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

232 Responses to weekend update

  1. hucky2 says:

    What just caused the spike in /es ?

    • simpleiam says:

      That’s what I want to know. Maybe BloomB. has it. I know China info. was due out this evening.

    • simpleiam says:

      Huck, you still there?

      About an hour ago, Putin ordered some troops back to Western Russia for war games then, back to barracks. Only problem is that the troops in question weren’t stationed in Crimea. But no matter, stocks liked it; but there’s something else. EU did quick inventory of petrol stockpiles and found they had quite a bit more than they first thought – 45 days. Guess it gives EU more time to respond, if they wish to do so… IMO, I don’t think they’ll do a thing. Also, a 3rd tidbit. Obama evidently had a face-to-face meeting with Netanyahu this afternoon (not clear if BO went to Israel, or reverse). Said that he thought Israel was doing their part (in the peace process), while The PA was not doing their part. Quite unexpected! Simplify!

  2. JK1987 says:

    Like cnbc host said: World War III
    What’s the probability?

  3. So does all this geopolitical uncertainty mean the Fed’s taper is on hold? Just saying…

  4. mjtplayer says:

    For those of you who track the VIX, this week should see slightly elevated volatility, but not too much – looking for the VIX to stay under 18. Next week projects increased vol, up to the 20/21 resistance area.

    Looking our further, late March we should see increased vol into what could be a very volatile April, VIX should rise well above the 20/21 resistance and push upwards of 30+ by mid April.

  5. JK1987 says:

    1848+, I am out. Slightly profits with 1853 + 1843 (doubled down).

  6. Joel Wenger says:

    Reblogged this on The Safe Investing Blog and commented:
    Technical Analysis – Last weeks summary of market action from Tony at the Elliot Wave Lives On.

  7. H D says:

    SPX down 34, rally 13. Rally was 13 Friday too. IDK. Very tricky here. Pick ur spots on ur terms. Good luck.

  8. rc1269 says:

    Tony – what probability would you give at this point that the whole move up from SPX 1737 could have been a PIV B-wave?

  9. CygnetNoir says:

    DJ-30 right back to that November high like its some sort of crime scene …

  10. mjtplayer says:

    Nice intra-day lunchtime rally from noon – 2pm, hourly RSI back towards neutral. Plenty of room on the downside for hourly and daily RSI. Today’s close and trading over the next couple days are critical IMO.

  11. llerias7 says:

    Tony, did minor 2 of Int.III ended today at 1834? Is it the conclusion from the chart changes?

  12. Now to lighten the mood on this gloomy day, I like to call this the activist investor’s song!

  13. lunker1 says:

    thanks for all the work Tony. any probability or thoughts that 1738 was Major 4 and 1868 was Int 1 of Major 5? thank you.

  14. uncle10 says:

    See no reason to cover any shorts at least until it hits the 50 day. ( SPX 1815). Gl to us all😉

  15. blackjak100 says:

    I saw a comment below from CN regarding gold so I’m sharing my take. The move in gold is surprising from an EW perspective. However, it looks like a completed expanded flat B wave may have completed at $1355 today right at 2.618 ext. Big C wave down to follow?


  16. H D says:

    Tony, is there any reason no alternate from 1627 (4) 1730-1, 1646-2,1851-3,1738-4, 1868 III? As rally got choppy right in terminal location? Thanks

  17. JK1987 says:

    A series of subdividing bullish 1-2 still good?
    Want to check with you before I triple down my long positions.

  18. kvilia says:

    This is quite important for me, so I will have to double check on that. Are you saying long term housing indicators are about to turn around, which happens right after the housing prices peak? So I assume this is a deal of several months, so it means housing will peak in consonance or even before stock market. Am I correct?
    Also, how long do you expect the housing bear will last and possible change in housing valuation in percentile? I assume this will deviate based on the area.
    Thank you, sir for your housing update!!!

  19. llerias7 says:

    Tony, it seems 1840 is the bottom…

  20. Seems like the February support trendline in ES is resistance now, as of today. Will be interesting to see what happens when it is tested from below again.

  21. Kisshu2 says:

    Not so much a standoff anymore with Putin demanding surrender of crimean bases under threat of force; Nato will become involved Itally alone can squeeze the Russian fleet – once again Putin demonstrates he can’t play nice on the world stage.

  22. JK1987 says:

    Right here, double down long at 1841.3.

    • bobhopium says:

      Not smart… imho.

      • bobhopium says:

        JK…there are times when I would gladly jump in with you for the gung-ho hero trade, but not today…GL to you anyway.

    • JK1987 says:

      Warren Buffett: Ukraine won’t stop my stock buying

      The host said World War III, she is out of her mind.

      • bhtrade says:

        His time frame is 5+ years. Correct me if I’ wrong but you are simply doubling down trying to better your average cost? Not saying your tactic won’t work but it is downright foolish for a short-term trader to use a Warren Buffet opinion to justify doing something.

  23. CygnetNoir says:

    The Dow is trading back below that 11/29 high and consolidating right below it as fund managers try to figure out if they really want to buy this pullback to the 50 day MA or not. If they do not, then 16000 +/- 40 points would be next identifiable area of supports (2/12 high … 2/20 low).

  24. alexh110 says:

    Tony, just wondering when you expect house prices to hit their long-term peak?
    I.e. Once the Cycle 2 bear market in stocks takes hold, how long before it impacts the housing market?

    • tony caldaro says:

      Monitoring our long term indicators
      Which have been somewhat weak lately
      They usually reverse before housing prices peak
      Long term I am assuming you mean for the next few years.

      • alexh110 says:

        Thanks Tony.
        Yes I meant over the next few years.
        I have a house to sell here in the UK, so want to try and realise the optimum price.
        I’m thinking perhaps this autumn may be the best time, to avoid risk of a sharp decline during the next bear market?

      • alexh110 says:

        Tony, think it’s very similar to the US.
        FTSE certainly seems to track the SPX; though as I recall you think the UK will face a more severe decline than the US over the next few years.

  25. Seeing a surprising number of green stocks on my watch list. Seems like there are buyers on the dip out there that have been waiting for this. My take is that we’ve seen the end of minute a of minor 2 and minute b is either underway or will be soon. This smells like a bear trap to me at this moment. 1820 SPX is possible but it’s a buying opp not a sell and hope it gets there opp.

    Good luck to all.

    PS, JCP was strong from the open. Looks to me like the big boys want that stock.

    • mjtplayer says:

      JCP is a short squeeze, the company is still on the path to bankruptcy.

    • simpleiam says:

      1841 pivot holding up well. Will know more toward EOB, but agree so far, it’s a buying op and not unexpected. Investors had all weekend to draw up the shopping list. Simplify!

      • simpleiam says:

        So, it’s the 1828 pivot now… Did okay in ES, but too much going on to work it any more today. Waiting on Cash. Shopping list is screaming at me!!! Therefore, I went and made 3 cakes and put them in the oven to take my mind off this. Looking so tasty… (The cakes too.) GL to All. TTY at close. Simplify!

      • simpleiam says:

        Okay, think it’s about done for today. If CNBC would just shut up, U.S. markets might rise faster. Might have to dump position later, but will give her a go. GL All. Tah!

  26. bobhopium says:

    Feeble attempt to squeeze shorts has met with more selling…could get very messy very quickly imho.

    • bobhopium says:

      I very rarely make an alarmist comment, however imho this current tech structure could move very sharply to the downside.
      Dow hourly

      S&P hourly

  27. JK1987 says:

    A series of subdividing bullish 1-2 still has a 50% probability?
    Let’s fill the 1859 gap.
    My 1853 long is not so much pain as last night.

  28. 1charlie1 says:

    sp fut….IF its B of P IV…

  29. kvilia says:

    Correction needed. “1) The Crimea used to be Russian territory, but with the collapse of the Soviet Union, Crimea became part of the newly independent Ukraine.”
    Crimea was officially given to Ukraine 2/19/1954 by Nikita Khrushev, many reasons to that, wont discuss them here (there is always Google😉 ). Then it was re-confirmed in 1991 when CIS was formed while breaking apart Soviet Union. So Russia has no right to be there at all. With that being said, it is historically Russian territory predominantly occupied by Russians, having Russian fleet there according to the agreement with Ukraine. So, on one hand this is an aggression, however that’s what Jews was charged with when they created Israel on the land that historically belonged to them.
    Very controversial situation here, no right or wrong IMO. I do believe that’s where Putin has to stop – the rest of the Ukraine must remain sovereign.

  30. bobhopium says:

    Greetings all.
    For my own trading purposes here is my chart tracking the Dow from last tuesday….maybe of use to others. No change of opinion and i believe a swing high I was looking for is “In” or close and I am still targeting 15540/15560 then 15100/15200 area.
    Aimho and all subject to monitoring and adjusting… I am currently short from last week and will get aggressive under the right technical conditions.

    GL to everyone Trading… “The Russian Shot Put”
    Dow continuous Daily :-

  31. Sorry, 4th Post,not posting anymore for the day..Short term SPX is up from here to 1851-53..

    I am not putting my trades here..but have been extremely fortunate on Friday for all trades and Sunday evening future trades as well..

    I am definitely going to lose monies in my next few trades today, hence not trading

    ….and going for NON STOP Liam Leeson..have a good one you all!!

Comments are closed.