weekend update


After a good rally last week, this week made a higher high then pulled back. For the week the SPX/DOW were -0.2%, the NDX/NAZ were -0.25%, and the DJ World index was -0.1%. Economic reports for the week were skewed to the upside. On the uptick: consumer sentiment, the monetary base, the WLEI, leading indicators, the FHFA and durable goods orders. On the downtick: the M1-multiplier, existing/new home sales, and weekly jobless claims were higher. Next week offers a plethora of economic data, including: Q1 GDP, monthly Payrolls and the FOMC.

LONG TERM: bull market

Over the holiday weekend I had the chance to review previous bull markets. The objective was to compare SPX/DOW/NAZ bull market OEW wave patterns, looking for subtle wave characteristics. Reported some of the findings in Monday’s update, and posted a modified DOW count. After further consideration this past week I have decided to shift the DOW count to the SPX , since it is the preferred count. And, shift the diagonal count to the DOW, since it actually fits better with that index. The NDX/NAZ counts remain unchanged. This exercise, and refinement, is to track the important Primary wave III as it nears its conclusion. When it does conclude, the Primary IV correction that follows will likely be the largest since 2012 and in the area of 15% or more. A correction we all would certainly like to avoid.


The long term pattern remains unchanged. Primary waves I and II ended in 2011, and Primary III has been underway since then. When Primary IV gets underway it will probably bottom with the 4-year Presidential cycle low scheduled for this year. The last four Presidential cycle lows occurred in: July 2010, July 2006, October 2002 and October 1998. In each case they created the low price for the year. Then after Primary IV bottoms, Primary V should take the market to all time new highs.

MEDIUM TERM: uptrend probable

After an uptrend, and all time, high at SPX 1897 in early April the market entered a downtrend which appears to have lasted only two weeks. Since the previous downtrend (1851-1738) only lasted three weeks, this short time period still fits. The NAZ uptrend and orthodox SPX high, however, ended in early March. So at the recent low, these downtrends could be considered about a month in duration. The rally off the recent SPX 1814 low had a choppy beginning, but then it rallied from 1816 to 1885 without one notable pullback. Since that high on Tuesday the market has had several notable pullbacks. Again led lower by the NDX/NAZ, just like during the recent correction.


We have tentatively labeled the SPX 1814 low as the end of Intermediate wave ii, and the recent high at SPX 1885 as Minor 1 of Intermediate wave iii. The current pullback should be Minor wave 2 of Int. wave iii. When it concludes the market should reach all time new highs during a Minor wave 3, and the uptrend should be confirmed. However, when taking into consideration the NDX/NAZ count, (two more uptrends to complete Primary III), and the seasonality characteristics of this bull market, (sideways to down in the spring), we can not totally rule out a diagonal Major wave 5 forming in the SPX too. We will see how this unfolds in the months ahead. Medium term support 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 and 1901 pivots. Short term momentum is displaying a positive divergence at the close on Friday. The short term OEW charts are negative with the reversal level now SPX 1870.

The recent rally from SPX 1814/1816 started off with a positive short term divergence. After a choppy beginning, due to the continued selling in the NDX/NAZ, a very strong rally took the SPX to 1885. At that high short term momentum was extremely overbought, and the market started to pullback. We labeled that high Minor wave 1.


The pullback has been somewhat choppy: 1874-1884-1870-1883-1860. Normally one should expect a rally and then another pullback to a lower low to complete this complex pattern. However, Thursday’s quick surge to SPX 1884 could be the aberration in the pattern, as the market made a lower pullback low within the first half hour. This would suggest this simpler pattern: 1870-1883-1860. And, with the short term positive divergence on Friday it may have ended. Also of note, in recent weeks the 1880’s area has been general resistance, while the 1840’s area has been general support. So a continued pullback into the 1841 pivot range can not be totally ruled out.


The Asian markets were mostly lower on the week for a net loss of 0.8%.

The European markets were mixed for a net loss of 0.3%.

The Commodity equity group were mostly lower for a net loss of 1.8%.

The DJ World index lost 0.1% on the week.


Bonds remain in a downtrend but gained 0.1% on the week.

Crude appears to be in a downtrend and lost 3.8% on the week.

Gold may have recently bottomed near our $1260 support area, rising 0.5% on the week.

The USD has remained in a narrow trading range for quite a few months. During the past six years this has occurred 4 previous times. Every time has resulted in a breakout to the upside. The USD lost 0.1% on the week.


Monday: Pending home sales at 10am. Tuesday: Case-Shiller and Consumer confidence. Wednesday: the ADP index, Q1 GDP (est. -0.7% to +1.0%), the Chicago PMI, and the FOMC statement. Thursday: weekly Jobless claims, Personal income/spending, PCE prices, ISM manufacturing, Construction spending and Auto sales. Friday: monthly Payrolls and Factory orders. The FED has its two day FOMC meeting Tuesday-Wednesday. Then FED chair Yellen gives a speech at 8:30am on Thursday. With all this activity this could be quite a wild week ahead. Best to your weekend and week!

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

About tony caldaro

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91 Responses to weekend update

  1. gary61b says:

    Maybe another trip down to the 1844/pivot level on the spx before new highs

    • simpleiam says:

      I keep thinking so too, gary. Almost every day, the +div or other bullish indicator gets wiped as indices go down, then, another +div and bullish indicator as indices close up on the day. Wonder if it’s going to do this all the way down to 1841 pivot? Suits me; I’ll buy there.

  2. Getting a buy-signal (again) on the weekly AI (SSTOs)… Of note; the daily MACD looks as if it wants to do -what I call- a slingshot setup: MACD line and Signal line flatten and converge, but former never crosses the latter and 1-2 days later both are pointing firmly up again and are diverging as prices is rising rapidly (3rd wave).

    • torehund says:

      Soul, lotsa hoock ups on macd on individual Stocks right now, its time to rise:)

      • TH, makes sense since it’s those individual tickers that make up the market. you have no idea how delighted I’d be if we finally break out of this 4 month’s trading range… but I am sure I am not the only one😉

  3. 777daimon says:

    Interfax reports that the russian troops are back to their bases, retreating from the Ukraine border
    ..and , yes, that’s risk on!🙂

  4. Minute a (1885-1860), b (1860-1877), c (1877-1850) of minor 2 completed?

  5. This market is very strong imo. nothing breaks it. low level of fear.

    • tommyboys says:

      Ya got that backwards. If you’re salivating for a crash you WANT little fear. Crashes and selloffs occur during complacency not when fear is rampant. That said many including me are scared silly here…

      • uncle10 says:

        anyone scared silly with the Spx and Dow off a tiny bit from there all time highs and the Russell and Naz down a normal correction amount after an almost parabolic rise, is way too invested or in the wrong stocks or both……. IMO. gl

      • tommyboys says:


      • tommyboys says:

        All Micro growth…SPX may only be off a few but lots of micros are off 50%. RUT received brunt so far.

      • uncle10 says:

        Tboys you aren’t scared. You are as confident as ever, and are salivating at being able to buy at these prices. just like most everyone else……I agree most momos look buyable for a trade and like Lee says this market gives everyone an out. Some people will take the out ( gift) and most won’t….. gl

    • This market is a Ponzi scheme, the federal reserve is in desperation mode, we will never know how much they are pumping in because you cant audit them, it doesn’t even matter because most major countries are dumping our dollar/ bonds, we are on verge of losing world reserve currency status and our petro dollar. Wake Up, America is on a Massive decline, federal reserve money printing cant save this, our military can’t save this.

  6. fun fact; at today’s low the SPX had gained a meager 5 points since it’s open on January 2nd this year… that’s 4 months of a whole lot of nothing…😉

  7. Keeping in mind FOMC, covered my short 1851.1, and that was medium position…Saved…myself..Have ended up with profits (of only 2.4 handles) against LOSS that was seen for last few days. I may go long sometime, today/tomorrow, but will update…it is likely to be 1848 area for long. Will speak to Putin from here(!!) and ask him to hold fire, till I sort out Janet Yellen on Wednesday. If I go long, I will cover long at 1868ish..come what may and may open SHORT there for FULL COVER toll 1804

    • Lee X says:

      SHRIHAS Ive noticed ur risk reward is a bit inverted for a guy who trades the bigs ..JMHO of course. Stops are annoying at times but all the cool kids who plan on doing this more than a few months use em😉

      • You are right..I have the habit of jumping into gun..As I am writing this, SPX is at 1856.7 and feel like SHORTING AGAIN..Hope to improve..Many many thanks for correct assessment..

        • Lee X says:

          Ur welcome
          Just paying it forward as I certainly learned the hard way back in the day.
          It’s a crazy biz trading those futures and I applaud and support everyone here in their efforts to do so .
          See yas ..thats over 3 Im pretty sure

    • Kevin M says:

      SHR-Good moves! Yeah that gap on the spx around 1848 should mark the bottom(short term)However buying after that should be watched carefully. Mid-term seasonals are about to kick in May 1st. Your cover at 1804 or the 200ma(likely to this level) should work out nicely. However expecting another push higher to 1928 after that considering we would be well into mid-term weaknesss by May is a misguided assumption. Regardless of tony’s counts. Remember tony can just do 360 turn around and re-label the waves making him a hero here. lol….Amazing most cant see this …o well…

      Anyway….Check out the previous mid-term years since 2000. Do you want to bet against that force?

      Good luck

  8. Tony, is 1941 pivot area your Must Hold area, or do you have such?
    Thanks in adv.

  9. thanks for a great update Tony and for adjusting the count.

    Fun with Fib, using txt-book extensions and retraces:
    i: 1738-1883: 145 points
    ii: 1814
    iii: 1814+ 1.382-1.618x 145 = 2014-2048
    iv: ~38.2% retrace: 1959-2014
    v: 1814 + 1.764-2.000x 1.45 = 2070-2104 which should conclude primary III, and which is all in line with your “current upside target of 1970-2070” as well as with my long standing call of a PIII top of SPX 2040-2200. But, thinking the lower range is most likely.


  10. uncle10 says:

    Covering my remaining short here. May get back in if it breaks the low of the day. gl all

  11. Looks to me THIRD wave has started, SPX going up by 10s of points every minute..LOLz.

    TOP is in place. SPX targeting 1804 and then 1928..But first 1804

  12. Caldaro you have played and charted this market perfect. Kudos to you sir

  13. gtoptions says:

    Thanks Tony ~ Appreciate the WE Update
    SPY ~ WPP @ 186.85
    WR1 @ 188.39 Right at the key level to break!

  14. mjtplayer says:

    Looks like another head-fake open, gap higher open but the growth areas are immediately sold. NAZ and RUT just went negative, VIX up.

  15. the “got to get down” roadmap for monday:

  16. More and more interested in what is happening with silver. Bollinger bands show volatility at it’s lowest in several years in /SI. Bottom pattern is a mostly descending triangle, though it’s not quite perfect. Silver under-performing gold continuously. So, a big move is coming in silver, but which way?

    The evidence I see points to down. Been researching all weekend and there appears to continue to be an oversupply in the silver market. Mines have not gone off-line to a great extent even after the decline. The supply destruction that would break the down trend has not occurred and there is no evidence that an increase in demand is coming. Yes a lot of silver coins are being sold, but that has been the case all along in recent months. From what I can see, prices will have to break the 14-15 dollar area for supply destruction to take place. There is simply no compelling reason for a sustained move higher to take place in silver at the present time. Ukraine may be helping gold prices but silver is just tagging along and under-performing.

    Interesting article in Barron’s on this very topic this week: Needs a subscription to get in to read though.


    Maybe the best trade is to wait for signs of volatility picking up showing a move is coming.

    • Wish I could link to my chart, but the trend line in SLV from the August to end of October highs last year have continued to be declining support. The big gap up this past February was a gap over the declining resistance level. It is now support, and the Thursday premarket drop and later pop was a retest of the declining support level. The problem is the level is declining and is now below the support level of the last 3 bottoms. The gap above the declining trend line has held in a literal sense but really was a failed breakout because prices went back to lows a few weeks later. Something has to give here, The current triangle is about 8 months into it and the apex is about 3 months in the future – prime breakout or breakdown time right about now. If Ukraine tensions can’t move this higher in the short term I don’t know what will.

    • mjtplayer says:

      Agree completely, silver around $15 or so is my downside target as well. Yes, mint’s across the world are producing and selling a lot of silver coins/bars, but 50% of silver production is used for industrial purposes – manufacturing & electronics. The global economy stinks, thus the industrial demand aspect is low, helping to offset the strong bar & coin demand.

      Also, jewelry sales are not strong and the SLV is reducing holdings – not as much as the GLD, but withdrawals from the SLV dumped on the open market isn’t helping prices either.

  17. Wondering your thoughts on the NASDAQ weakness relative to Sp 500. Is this just a matter of rotation to Large caps as we wind up Primary 3??

  18. opader says:

    Thx Tony. My thoughts: http://balancetrading.blogspot.com/
    It’s Still 70 – 30

  19. Joel Wenger says:

    Reblogged this on The Safe Investing Blog and commented:
    Per Investor’s Business Daily, we’re still in a correction, which continues to match the short-term outlook from Elliot Wave.

    Short-Term: Downtrend in search of support
    Mid-Term: Uptrend in search of support
    Long-Term: Uptrend

  20. bhupal777 says:

    Update on Twitter long trade (TWTR): My biased count telling me that TWTR is in Wave 2 retracement.
    Excerpt from EWP (page 79) on Wave Two Personality…
    “Second waves are often retrace so much of wave one that most of the profits gained up to that time are eroded away by the time it ends (TWTR is almost retraced 80% of wave 1 so far). At this point, investors are thoroughly convinced that the bear market is back to stay. Second waves often end on very low volume and volatility, indicating a drying up of selling pressure (except on Friday this has been true for the entire wave 2 retracement).”
    Now the chart… http://bhupal777blog.wordpress.com/2014/04/27/update-on-twtr-long-trade/

  21. simpleiam says:

    If you don’t have a Roth and qualify for one, open one NOW!


  22. ocaj2000 says:


  23. blackjak100 says:

    Bouraq, short term count I’m working says that gold should top $1310-$1315 early next week. This indicates a slight overshoot of your channel. If it continues past $1320., I would get long. I plan on nibbling short and exiting long around $1310ish.

    Is that a 4hr chart you are posting?

  24. Breaking news!! Breaking news!!!. This news has not appeared anywhere else, so, I take credit for giving you first hand information. Please adjust your limits/stops accordingly, as I am not responsible if you dont act.

    Yesterday, fight broke out between pro and Anti Russians in Slavyansk. In one of the night clubs (name withheld due to strict privacy laws), guys from PRO and ANTI were drinking vodka and this PRO group had blue eyed blondes with them. One among these blondes starting flirting with ANTI Russian group and fight broke out.

    These PRO and ANTI guys are punctual. They left check-posts exactly at 5PM on Friday for weekend celebrations, will be back Monday Morning. I am planning to punish late comers on Monday.

    Barrack was heard saying, I was better off in Ukraine than Malaysia,

    Please dont forget to adjust your stops/limits based on this news.

    • budfox9450 says:

      Good you notice the Russian activity.
      Beware, of the setting sun on Japan
      and China. The ocean temp is rasing.

    • 777daimon says:

      only a full blown russian military invasion will push the markets down.
      and this never happened until the moment of writing this message.
      skirmishing is still possible, but that doesn’t mean anything to the markets.
      the alternatives are 2 and strong: a. russians invade ukraine in a full blown military move or b. the situation settles and a peace treaty is signed, Crimea being acknowledged as part of Russia.
      Beware of b. because that would call for a strong up wave in the markets.

  25. RDC says:

    Tony, Thanks much as always. Very nicely written Weekend Update.

  26. simpleiam says:

    Thanks Tony. Good stuff!

  27. M1 says:

    Thanks, Tony.
    I find this pattern. NAZs pullback was 2.6%. SPX was 1.3%.
    Should this pattern continue, NAZ could drop 5.6 % retest its lows and SPX could drop to 1832 before another rally.
    Hope this helps.
    have a great weekend.

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  29. mjtplayer says:

    Thank you Tony – good stuff as always!

    – OEW Coffee Club Member🙂

  30. bhupal777 says:

    Thanks Tony. Have a great weekend.

  31. alexhartley1 says:

    Excellent report. Very enlightening. Thanks Tony. I have the same view on the EUR/USD and Cable. They both look poised for my upside which would be in line with your thinking of a DXY bottom just below 79. Cheers and good weekend.

  32. Excellent analysis, Tony. Waited all morning for your weekend update … and was worried you were okay (it’s a girl thing). May you have a wonderful weekend. 🙂

    • tony caldaro says:

      actually I only wrote it this morning

      • Just glad you wrote it, Tony. You can tell how many of us wait for it, as all the postings (thanks to you) start coming right after you get it out there. Your future bullish analyses are amazing, as I was initially skeptical of the NAZ doing anything but going into a bear market … until the IHS recently became visible. The IHS would take it out of its downtrend and on to new highs. The longer-term charts give one to pause, but one short-term trend at a time.

      • blackjak100 says:

        Jedi? Don’t you think the H&S of the QQQ has a much better look than the IHS? It can’t be both and I think stocks like FB & NFLX falling hard after really good quarters is telling us something. It carries a lot of weight in my eyes especially when credit markets are waving a warning flag since beginning of year. Ultimately, I think $SPX goes to 1920ish to complete ED.

      • Blackjak100, To be honest, your question is aptly worded “… a better chance …”. Yes, I personally would agree by just looking at the chart that the QQQ has a better chance of continuing its downtrend, as a daily pattern is stronger than a pattern on a 60-min chart. The H&S is on the daily and IHS on the 60-min. As posted on Friday, I cashed in my shorts, however, and will be waiting for the next move. If we can’t break out of the downtrend (see chart), go long, else short again. Good question you had. Have a nice rest of your weekend.
        On another note, I mentioned on Friday, that ISRG is on my watch list for a bounce. Although it is at support and has gaps all over on the way up, I will pass on considering that trade. The volume is horrible. I don’t want to be one of the small # of holders, as it is very risky. Just wanted to pass this on, because some who visit the board may be newbies and should know not to bother with stocks that are slimly traded. Stay with big names/big volumes.

      • tony caldaro says:

        just following the waves =)

  33. bouraq says:

    Weekend charts:
    #spx #djia #rut #dax #gold #sugar #oil #ftse

  34. rolandu11 says:

    The nice profits to the mid-week were transformed into (small) Weekly losses at the end (SPX). The Ukraine crisis again played a role. Still nothing decisive has happened, but further losses should avoid the bulls better.

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