weekend update


The market started the week gapping up after last Friday’s decline to SPX 1840. The rally carried it into FOMC Wednesday to SPX 1874. Then right after the FOMC statement was released the market dropped to SPX 1850. Another rally carried the market to match the all time high at SPX 1884 on Friday. Then right after the open Techs sold off and the market pulled back again. Another choppy week, only this time to the upside. For the week the SPX/DOW were +1.45%, the NDX/NAZ were +0.7%, and the DJ World index rose 0.7%. Economic reports for the week were positive. On the uptick: NY/Philly FED, capacity utilization, industrial production, NAHB, housing starts, building permits, CPI, leading indicators and the monetary base. On the downtick: existing home sales, and weekly jobless claims edged higher. Next week: Q4 GDP, Durable goods orders, and more Housing reports.

LONG TERM: bull market

We continue to count this bull market as a five Primary wave Cycle wave [1]. Primary waves I and II completed in 2011 and Primary wave II has been underway since then. Primary I divided into five Major waves with a subdividing Major wave 1. Primary III has also divided into five Major waves. However, Major waves 1 and 3 subdivided and likely Major 5 is subdividing as well.


From the Major wave 4 low in August 2013, we have labeled Intermediate wave one at SPX 1851, Int. two at SPX 1738, and Int. three underway now. Int. wave three has already made a new bull market high at SPX 1884, and the NDX/NAZ have made new highs too. However, the DOW continues to lag as noted with the three chart illustration in last weekend’s report. The DOW has still not exceeded its December 2013 high. Nevertheless, we see Primary wave III continuing in at least the SPX/NDX/NAZ in the coming months.

MEDIUM TERM: uptrend

The bull market in the SPX matched its all time high this week, but the DOW/NDX/NAZ did not. As a result the market remained choppy for the fifth week in a row. This may make sense to some as the first wave of this uptrend, Minor 1, was quite strong and unfolded in less than three weeks. Some choppiness was then expected, as we have been anticipating this uptrend to last for a few months with only an upside target of SPX 1962+.


We are counting this Int. wave three uptrend as five Minor waves. Minor 1 completed at SPX 1868. Minor wave 2, however, appears to have formed an irregular failed flat SPX: 1834-1884-1840. The rise above SPX 1868 makes it irregular, and the failure to reach the wave A low at 1834 makes it a failed flat. At the recent SPX 1840 low we had an oversold condition in all four major indices, and a positive divergence on the hourly chart. The market responded by rallying this week. Once SPX 1884 is cleared we will feel more confident about labeling Minor wave 3 underway. Thus far we have maintained tentative green labels for all of the activity since the Minor 1 high at SPX 1868. Medium term support is at the 1841 and 1828 pivots, with resistance at the 1869 and 1901 pivots.


Short term support is at the 1841 and 1828 pivots, with resistance at the 1869 pivot and SPX 1884. Short term momentum declined to oversold after hitting quite overbought on Friday. The short term OEW charts have been vacillating of late, ending the week positive with the reversal level still at SPX 1869.


As noted above the market activity from the Minor wave 1 high at SPX 1868, and even before, has been quite choppy. It does look like Minor wave 2 bottomed recently at SPX 1840. The rally from that low, however, is also a bit choppy: 1874-1850-1884-1863. Either the market is setting up, with subdividing waves, for a surge higher. Or this week’s rally is corrective as well, and a retest of SPX 1834-1840 is next. With the SPX hitting its high right after the open on Friday, and then pulling back during options expiration. We lean towards the former rather than the latter. Once SPX 1884 is cleared we will likely label the two recent highs as Minute i at SPX 1874, and Micro 1 at 1884. Best to your trading!


The Asian markets were quite mixed on the week losing 0.4%.

The European markets were all higher on the week gaining 2.3%.

The Commodity equity group also rose gaining 4.3%.

The DJ World index is still uptrending and gained 0.7%.


Bonds continues to downtrend losing 1.0% on the week.

Crude appears to be downtrending but gained 0.6% on the week.

Gold appears to entering a downtrend and lost 3.5% on the week.

The USD set up a positive divergence for a potential uptrend, it gained 1.0% on the week.


Tuesday: Case-Shiller, FHFA housing, Consumer confidence and New home sales. Wednesday: Durable goods orders. Thursday: Q4 GDP, weekly Jobless claims and Pending home sales. Friday: Personal income/spending, PCE and Consumer sentiment. On Monday, FED governor Stein gives a speech at 9am. Best to your weekend and week!

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

About tony caldaro

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124 Responses to weekend update

  1. H D says:

    4 big moves, all 35 points. We aint sticking around here. Shake and bake on a whole new level. Tuesday is a new day.

  2. lunker1 says:

    The moving averages on the 60 minute and daily were resistance

  3. Just looking at this whipsaw city where 40 points are retraced within 2-days either up or down over the past 3-4 weeks (welcome to volatility baby!😉 ), but no key levels are broken on either side just yet, it looks like a bullish pennant is developing. Close above 1884 will confirm this developing pattern, close below 1834 will likely negated it (there’s always some wiggle room ;- ) ).

    ps: Friday’s sell off turned the daily SSTOs Indicator from a buy to a sell-signal (right around when I posted everything looked mighty fine for the bulls…😉 ):


  4. uncle10 says:

    Next time SPX gets under 1850 and stays for more than a few seconds, it SHould go down fast from there— can have a close stop. Gl to us all!!!! 🙂

  5. gary61b says:

    I hear a stampede coming…they don’t sound like bears

  6. lunker1 says:

    60min RSI5 hit deep oversold at 9.4 looking for 10pt bounce to 1860 then LL to get touch of 34DEMA (1847.5) and to set up +D on 60min

  7. the lack of fear in VIX futures is telling

    • tommyboys says:

      What’s it saying?

      • to me its telling me this maybe the worst it gets for now and not to many people are worried about this market going into a tail spin. In other words my friend tommyboy nobody cares and its just a buy the dip event.

      • I think whats funny is Icahn came out and said this market is on hot air and so have many others. The Pope may say it next.LOL

      • tommyboys says:

        Like all the big media voices talking about up the fragility of the market but at the same time I think a more serious correction my be in the cards here. VIX can be viewed two ways. Either no fear and we keep grinding higher OR no fear – YET – with more to come. I’d like a nice spike to 25 on the VIX clearing out a lot of complacency THEN I’d be comfortable we move higher. I think the VIX will move up (or a better measure the VOLI) soon spiking toward the end of this pullback. Once it spikes good it’ll be safe(r) to get back in the water. Hard – if not impossible – to time however…

      • tommyboys says:

        Didn’t you say all rallies are to be sold into here as large blocks were being moved out ?

    • rc1269 says:

      oh no… not the vix futures again. i thought we already dispelled this one…

      • Yes I plan to sell all the rallys. I said short term the vix futures were saying we will rally back and so far we are. RC the VIX is the fear guage always has and always will be, what myth are you referring to?

    • uncle10 says:

      LOL, I was going to write something but on second thought……
      TB, I agree with everything you said, except the part about difficult if not impossible to time. There are plenty of things to give you clues as to what is going to happen….

      • tommyboys says:

        Maybe Unc but lots of shorts been “timing” the top all the way up gett’in smoked. We may be at a ST top or not here – only time will tell. Could get smoked in either direction here potentially.

      • uncle10 says:

        I hear you TB! Some body gettin ready to be smoked hahaha and I hope its not me! I don’t want to be smoked!!

  8. подветренный says:

    RE: Gold and Silver
    Sorry for over posting but my amusement for the premiums charged for Silver Eagles never ends. I know most here buy in kilos or by the ton ;P but for regular folks who just try and buy a few now and then ,what a scam.
    That said who’s looking to buy this dip in GC/GDX/GLD today ? Or are most waiting to see what happens at the old breakout @ $1300 ish. Personally I have no position at the moment

    • bobhopium says:

      Looking for sub 1200 on the spot gold and also new lows on the miners…GL

    • rc1269 says:

      just bot some this am, since you asked. a-b-c down and 38.2% retrace and sitting on MAs, which are crossing up. good enough for a stab, small. just my 2 cents. cheers

    • mjtplayer says:

      Wait a couple weeks, I see high VIX for stocks and PM’s over the next couple weeks.

      Longer term, gold hasn’t bottomed IMO. Looking for $1,050-ish and $15/$16 silver this summer.

  9. bobhopium says:

    70% chance that the spring high is in now, imho…GL to us all.

  10. jeffbalin says:

    Start of major 4 in naz?

  11. Caldaro you still leaning that 1840 flips things around a litle or is this getting concerning?

  12. подветренный says:

    If you’re bullish this would be a cheap long here ? да or нет ?
    Or too much overlap ?
    How was the fishing H D ?

    • fun thx, fished microlight bass rigs from kayak, halibut and rock bass.

      5 point bounce from ES 42 zone, needs to firm up or we visit ES 35 IMHO

      • подветренный says:

        I’ve never done that in saltwater, that sounds like a blast ! Did u ever tip over reaching for a cold one ?
        Thx for the reply and that’s #3

  13. GM Tony, all, Bears having their way with rallies that fail to get HH DOW. Last week ES had buyers @42

  14. scorp100 says:

    Hi Tony, Namaste. What do you think about NFLX?

  15. uncle10 says:

    is everyone bullish? are me and yen guy the only ones short??

    • scottycj1 says:

      Who said Mar 6-7th high ? 🙂

      • uncle10 says:

        ah yes! forgot you Scotty! Looking good.

      • CygnetNoir says:

        I think Uncle made some kind of big call around that time – I’m not sure the day but the market was higher than it is now and he was calling for it to go lower. So kudos to Uncle as well!

    • JK1987 says:

      As you asked for my stop, you must value stop rule very much, but you violated your own stop rule, not a good practice.
      Your shorts should have stopped out on Friday with the gap up to 1883+, why didn’t you follow your own stop rule?

      uncle10 says:
      March 20, 2014 at 9:54 am
      Alrighty. I’m all in. Stop above yest. highs SPX. gl all.

      JK1987 says:
      March 21, 2014 at 1:24 pm
      1869 -, Right here, cover all scaled shorts.
      1883, 1882, 1881, 1872, 1867.

      uncle10 says:
      March 21, 2014 at 3:48 pm
      Nice work JK! Taking heat is no fun. I was feeling it in my britches big time! I stayed in most all my shorts though.

      • uncle10 says:

        LOL. You got my JK!! hahahaha. Yes we all know if you want to play this game long term you must control risk. Given the set up on the daily and weekly charts and my strong belief we could be at the start of a nice correction SPX (1800-1750 at least) and the fact that it did not CLOSE above my stop, I was going to see how the gap up on Friday played out. Lucky for me it started down in the AM and closed down allowing me to stay short.
        My asking you was not to call you out but to make sure you have a stop somewhere just in case….. good luck my friend.

      • JK1987 says:

        uncle, good to hear that, looks like you are profiting from your shorts.
        Do you take profits or stay short till your target of 1800-1750?

        My 1848 stop is on the intraday based, not as your CLOSE based.
        Good luck to you.

      • tommyboys says:

        FYI…TISA PR’d a nice contract this morning and they’ve taken a beating recently…could be free money now!

      • uncle10 says:

        I take some off as I profit. Even though I really like the set up. if you are shorting in a bull market you have to take some profits when you have them.

    • tommyboys says:

      Lightened up on SILC Unc…expect it way higher later this year however and will buy the dip.

      • подветренный says:

        That was a very nice call and trade Tboys

      • uncle10 says:

        Tboys, You called free money and got more than a double pretty quick! I like that you take some off after a nice profit. Very nice!

    • jeffbalin says:


    • bobhopium says:

      Not me uncle….I am short on Dow, very ugly looking charts imho…Gl to us all.

  16. mjtplayer says:

    A tribute to the biotech sector:

    BIS up 17% since Thursday! Biotech is very oversold, short-term, taking some profits. But, hard to say where the snowball rolling downhill stops – sell any rally.

  17. 777daimon says:

    1858-1859 spx = support of the channel formed from the February lows (1740’s)
    time to go long IMO

  18. JK1987 says:

    1860.5, cheap long, scales in and buy more.

    JK1987 says:
    March 21, 2014 at 3:22 pm
    Tony Thanks
    I see more up with the up trending chop city.
    Long into the close 1866.

  19. magnus1234 says:

    YM started both Friday session and today session strong but NQ followed by the TF
    are spoiling the party. Breadth opened strong showing but turns a drops suddenly. It fits the “correction” pattern and I believe we will soon see the 5th micro wave down for this C wave. I will start buy in the SPX 1860-1863 zone.

  20. jeffbalin says:

    I really appreciate your weekend updates Tony, thank you.
    I’m a little strange I know but for whatever reason I’ve got the sp early march 1884 high as end of minor 1, 1840 as possible A, the recent return to 1884 as possible B, with possible C down coming to end minor 2. If the market shoots up then 1840 was end of minor 2 but the comp looks kind of sick so I feel like there might be more of the minor 2 that never ends.
    Tony , it appears from your experience that the Dow Pri 4 alternate count is highly unlikely at this point?
    Thank you.

  21. budfox9450 says:

    Good Evening”
    Monday morning, it is my plan to
    Buy few hundred shares of each,
    ESV RIG SDRL…all on Buy signals.

  22. esvxm says:

    Good analysis Tony!
    S&P still not able to take out that 127.2% expansion of the swing down at the $1880 level.

  23. Joel Wenger says:

    Reblogged this on The Safe Investing Blog and commented:
    From the Elliott Wave lives on: Long and mid-term outlooks remain bullish. In the short term, expectations are for a surge higher, although there is a chance at another correction.

  24. RDC says:

    Tony, Thank you for another outstanding weekend report.
    The Gold and Gold-mining sector is on the verge of flashing the fabled Golden Cross buy signal.
    $Gold, GDX, GDXJ all have the 50-day moving average climbs back over the 200-day moving average. Gold miners are set to make huge move to the upside.

  25. uas2014 says:

    hi tony, thanks for your work….
    what do you think about ibovespa?
    this week this index had a wild move?.
    thanks again

  26. hucky2 says:

    Between the Oct 9th 2013 low and the Dec 31 high SPX gained 204 points in 59 trading days (83 calendar days)
    If that cycle repeats from the Feb 5th 2014 low – the SPX would be at 1940 just before the end of April
    If you put 50, 100 & 200 ma’s on a chart of the 4 major indexes all are bullishly aligned.
    Both of these support Tony’s w3 count, & target

  27. Pingback: Risk-Reward Market Report – 2014.12 | The Risk-Reward Report

    • Probably not true… I found it on FaceBook shortly after the incident and posted it on my blog just to see other’s reactions and/or opinions. It got over four-thousand hits but very few responses…so there it stays until we get a more definitive explanation. Thanks for your inquiry. Norm

    • budfox9450 says:

      Alot of rubbish in print there, M1.

  28. Thanks Tony,
    One observation to add. For the first time since w/e 12 aug 2011, the VIX 20wema crossed up over the 50wema. 10>20>50 and rising.
    And a couple more toppy looking charts:
    RUT bubble and equal legs: https://twitter.com/bob682/status/447496448423100416/photo/1
    TRAN bubble and equal legs: https://twitter.com/bob682/status/447496545781288960/photo/1

  29. Hi,Tony, thanks,i have a doubt,a wedge can be count as a triangle(abcdefg)or only as ending or leading diagonals?,thanks

  30. bobhopium says:

    Thanks Tony.

  31. thanks for a great weekend update tony!

    will keep it short this time😉 Just looking at the McClellan Oscillator again, and even though yesterday was a down day, the $NYMO went up.

  32. If spx makes high, it will be false breakout…it is almost over…I do appreciate desperation of FOMC in trying to show growth…someone said it correctly, QE money from heaven will become money for hell. Write this down and put in envelope and open it on 1 jan 2015. GLTA. Spx targeting 1831.

  33. liborval says:

    Hi Tony, what about diminishing returns from lowering QE. as I found out by simple math last year 85B made cca 25 pts a month on SPX. from January we are up 20 pts with QE 65B (it is over 2 months). from April we go to 55B, May 45 maybe and so on. from August there will be probably only 20B a month it isnt enough. QE1, QE2 averaged 75 B a month and the market topped after QE ended this time is different QE is getting smaller no ending suddenly. we cant maybe make it to 1900, my guess 1920. it is 50 more points till August?

    • tony caldaro says:

      we are keeping track of the QE diminishing returns
      currently we have a high of SPX 1981

      • liborval says:

        thanks Tony, hard to imagine another 100 pts on SPX with QE where probably only 250B left for 7 months but it can be on the upper limit of range 50-100pts. and imagine if taper is done then we go over 2000

  34. Thanks Tony for all your hard work. I enjoy your analysis and charts, and have enjoyed them for over a year. And I also appreciate the information from many who contribute to this blog. Thank you all, I am learning a great deal. Question: Could Friday’s SPX action be interpreted as a “shooting star”, and portend a correction? Would that fit with the wave count?

    • tony caldaro says:

      Do not follow candles, but do follow traditional volatile days which recently have been selloffs:
      1. ES quarterly turnover
      2. FOMC statement
      3. Options expiration

  35. lunker1 says:

    Thanks T. Monet😉

  36. mjtplayer says:

    Low volatility this week, as expected. This upcoming week we should expect an increased vix, perhaps testing the 18 area.

    I’m seeing increased vix in the first couple weeks of April, not sure what news/events may occur to spark the vix, but I expect a minimum move up to the major 20/21 resistance area where vix sellers have come in time and again over the past 2 years. That area should be taken out with an upside target of 24-26 and possibly higher, outside chance of hitting 30.

    Could be a wild ride over the next few weeks…

  37. bouraq says:

    Weekend charts:
    #SPX #DJIA #DAX #GOLD #SUGAR #COFFEE http://www.tradingchannels.co.uk/2014/03/weekend-charts_22.html

  38. bhupal777 says:

    Tony, I said it many times. Let me say again it one more time. It is not an easy task to analyze lower degree counts on a daily and hourly basis and drawing big picture out of it. Thank You for your service. Have a great weekend.

    As lot of traders expecting next week may not be a break or make story. Instead it is going to be more choppy market as big players rotating from high flying stocks (ex: Techs, Bio-techs, ) to value stocks ( big financials, MSFT, CSCO etc…). Myself neither short nor long on SPX.
    Coming to China Index on Friday, where is all that strength came from? FXI is up almost 4% intraday. Nibbled some YINN April 22 Calls.

  39. llerias7 says:

    “Some choppiness was then expected, as we have been anticipating this uptrend to last for a few months with only an upside target of SPX 1962+”

    Tony, few months…meaning July, perhaps?

  40. moo42 says:

    Thank you, Tony.

  41. simpleiam says:

    Thanks Tony.

  42. M1 says:

    Thanks, Tony.
    It is very impressing how the market is trying to go much higher even when the NAZ is at a major long term resistance (4259/4289).
    It looks like someone is playing Yo-Yo and this resistance level is at the middle. Above, below, above, below…
    I am still expecting NDX/NAZ cycle wave 4 (+27% decline). However and after this chopyness, I am seeing the chance for the next correction to be only a major 2 of Primary wave III. (A similar situation when the FED manipulated the market (old dow) during the 50s). Under this scenario the market will go one way for the next years. UP.
    Have a nice weekend. Thanks again

    • $NDX leading the markets lower, most traders and investors arnt aware of the $NDX selling off. Trend is down… GL

      • esvxm says:

        Also the biotech sector is being sold off. Perhaps a rotation into defensive stocks. Look at the ETF IBB. This sector has been in an uptrend since March 09 and now there is a wide ranging bar to the downside last Friday.

  43. 16golfer says:

    Thanks Tony. Getting close to that 1 year date from the breakout.

  44. rolandu11 says:

    There was the rebound and there were even just intraday all time highs (SPX, OEX) achieved on Friday. But then the bulls lost the courage. After all, my volume indicators look better now.


    • tommyboys says:

      Hard to discern much from an OPEX day with regard to volume. All kinds of crazy stuff happening. Next week get a better handle.

      • rolandu11 says:

        tommyboys, my volume indicators are designed to Opex has no, or only a small impact.

      • rolandu11 says:

        This is what traders who are not familiar with good volume indicators say: The volume indicators would so strongly distorted by OPEX that they are useless. But that’s not right. The indicators programmer are familiar with the problem for a long time. And they have found solutions to this problem. But I know that only a few accept this (It is an art to handle with indicators).

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