weekend update


The market made some progress this week. Thanks to the two gap up openings early in the week, and no surprises from the FED or Q1 GDP. For the week the SPX/DOW were +0.95%, the NDX/NAZ were +1.35%, and the DJ World index was +1.10%. Economic reports for the week remained positive. On the uptick: pending homes sales, ADP, Chicago PMI, personal income/spending, PCE, ISM manufacturing, construction spending, auto sales, Payrolls, factory orders, and the WLEI. On the downtick: Case-Shiller, Q1 GDP, the monetary base, and weekly jobless claims rose. Next week we get reports on ISM services and Consumer credit, plus Congressional testimony from FED chair Yellen on Wednesday.


There are lots of counts being kicked around on the SPX/DOW. The NDX/NAZ, however, continues to display no signs of shifting from its count. While it has been pressuring the general market, it still has two more uptrends before ending Primary III. After reviewing the wave characteristics of its entire bull market we arrived at the following:

Major 3 high July 4420

Major 4 low August

Major 5 high Sept 4470

This fits with the SPX/DOW i-ii-iii-iv-v count for Major 5, and with the QE 3 ending target around SPX 2070. One last thing. The last time the NAZ dropped 400 points during a correction was the spring of 2012. Its next uptrend was quite choppy in the beginning, as you can see, until it finally kicked in. Quite similar to what it is doing now.



In the early part of this bull market it experienced a spring swoon. Then when everyone noticed it, it began to lessen.

2009 June high-July low-then uptrend until January.

2010 April high-July low-then uptrend until February.

2011 May high-then no low until October.

2012 April high-June low-then uptrend until September.

2013 May high-June low- then uptrend until August.

2014 April high-April low ?- then uptrend until …

Notice how the selloffs started in the spring, kept increasing in duration until 2011. Then started lessening in duration and impact into 2014.


LONG TERM: bull market

This Cycle wave [1] bull market continues to unfold from the Super Cycle wave 2 low in March 2009. Rising Cycle wave bull markets unfold in five Primary waves. Primary waves I and II completed in 2011, and Primary wave III had been underway since then. When Primary III concludes, possibly by this summer, a steep Primary IV correction will follow. Then Primary wave V should take the market to new highs.

Each rising Primary wave unfolds in five Major waves, as you can observe during Primary wave I. Primary wave III was a bit tricky as it unfolded. As Major wave 3 apparently just kept extending. Nevertheless we have labeled the February 2014 low as the end of Major wave 4, and we are currently in a subdividing Major wave 5. This suggests, both the SPX and DOW, have two more uptrends before a Major wave 5 top, and the end of Primary III. This count fits with the count being carried in the NDX/NAZ. So it does appear we are in sync with the four major indices.

MEDIUM TERM: SPX uptrend probable, DOW in uptrend

As noted above we are expecting five waves (trends) from the Major wave 4 low in February before Major wave 5 concludes. The first uptrend rallied from SPX 1738 to 1897 in early April. Then we had a correction down to SPX 1814 by mid-April. Now we are only points away from confirming the third wave from that low. The DOW, and the NYSE for that matter, has already confirmed an uptrend. The NYSE is also on the same count.


The recent correction in the DOW (16,662 to 16,015) was only 3.7%. Its smallest correction of the entire bull market. Should the SPX also confirm an uptrend it too would have had it smallest correction of the bull market as well at 4.4%. This is not a sign of general weakness, but of strength. Keep in mind, while these small corrections were unfolding in the SPX/DOW, the NDX/NAZ were correcting 8.7% and 9.7% respectively. Also, if we count the internal structure of the DOW during its February to April uptrend we observe an orthodox high in early March, then an irregular flat into the mid-April low. Irregular flats may look like head and shoulders tops, but are actually quite bullish.


With the NDX/NAZ still about 6% to 7% below their all time highs, and our projected initial target. The SPX should at least reach the lower end of the Primary III projected target at 1970 to 2070. After that concludes a Major wave 5 diagonal triangle can still form, in the both the SPX and DOW. But not like the one being currently carried on the DOW charts. It would be shifted one degree further out. For now, let’s just track this uptrend and see what unfolds. Medium term support at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots.


Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum ended the week heading lower after a negative divergence. The short term OEW charts remain positive with the reversal level now SPX 1879.

From the recent potential downtrend low at SPX 1814 we counted five waves up to 1885, and labeled that Minor wave 1. Then after a complex double three pullback to SPX 1851, which we labeled Minor 2, the market has rallied to a higher high at SPX 1891. This recent rally also looks like five waves up, but of a smaller degree (Minute wave). We counted the advance from SPX 1851: 1880-1871-1889-1880-1891.


After that high, around 10:30 Friday, the market pulled back to SPX 1879. Notice it found support around the 4th wave (1880). Also note, the shortest wave during this last rally was the fifth wave. When this occurs sometimes the market pulls back to the previous second wave (1871). So a continued pullback to the OEW 1869 pivot would not be anything unusual. For now, we are labeling the SPX 1891 high as Minute wave one of Minor 3, and will wait to see where Minute wave two bottoms. Until SPX 1891 is exceeded we can not be certain that Minute two has ended. Best to your trading!


The Asian markets were mostly lower on the week for a new loss of 0.60%.

The European markets were mostly higher for a net gain of 1.30%.

The Commodity equity group were mostly higher for a net gain of 1.70%.

The DJ World index remains in an uptrend and gained 1.10% on the week.


Bonds have confirmed an uptrend gaining 0.5% on the week.

Crude remains in a downtrend losing 0.9% on the week.

Gold is trying to establish an uptrend but lost 0.1% on the week.

The USD remains in a downtrend losing 0.3% on the week.


Monday: ISM services at 10am. Tuesday: the Trade deficit. Wednesday: Consumer credit. Thursday: weekly Jobless claims. Friday: Wholesale inventories. The FED has a busy week. Tuesday: a speech from FED governor Stein in the evening. Wednesday: Congressional testimony from FED chair Yellen. Thursday: a speech from FED governor Tarullo. Best to your weekend and week!

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

About tony caldaro

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143 Responses to weekend update

  1. shadow305 says:


    Long-time lurker, first-time poster from British Columbia. I am seeking clarification on your SPX 1970 – 2070 projection for q3/q4 of 2014. Is that target for Primary III or Primary V?

    If it is Primary V, at what level do you see Primary III topping out & roughly what time frame?

    I suspect that the sell in May crowd may wish they hung until July this year.


    • llerias7 says:

      I think 2100´s will final top for this bull, i.e. top of P V. Right now P III is toping and the risk/reward is not favorable to a long position. I am now mostly in cash and waiting what ever it takes to get short for a medium term position (1-2 months).

      • shadow305 says:

        What are you looking at for Primary IV? Some suggest it could be 1646ish, the level at which this ending diagonal started.

    • tony caldaro says:

      Welcome Shadow
      Currently that range is for PRI III.
      But could be both.
      Too early to tell.

      • shadow305 says:

        Thanks, Tony. That is kind of what I thought, depending on the severity of Primary IV.

  2. Why would mr. market push up through 1900 if they know everyones gonna go short up there? It seems they have enough shorts here already.

    • when I say here, I don’t mean shorts on this board, I mean shorts in the market.

      • torehund says:

        Shorts will be cying and fighting this market until their juice is thoroughly drenched, we are far from that situation yet. Shorting is the most difficult art in stocktrading, closest I have been to nailing it was 2 weeks before gold descended. And when it so did I couldnt stand even thinking of shorting it anymore…and then if fell further. Good lesson for me.

    • Kevin M says:

      Excellent point newbie……It’s valid and btw I’m new here so I had no idea that the board here has always been bullish. It must have sucked for them in 2010 and 2011….Yikes…Anyway, I see your point and yes the sentiment here means nada lol

      When the music stops…and it will stop….I just hope tony gets the waves right. He is their guru no doubt lol…..Tony I love ya. You know it….In good fun in good fun

  3. RDC says:

    Dennis Gartman will be on CNBC at 5pm. My trade for tomorrow:
    If he says he is pleasantly bullish then I will take short position and
    If he says he is pleasantly bearish then I will take long position.
    Easy Trade.

  4. I have not followed the RUT much nor done a wave count but from a glance, that wave count appears to be shaping into a triple zigzag. If correct, that would lead to a retest of the 102.26 April 28th low….also friday’s shooting star tells me that there is further selling to go on RUT….

  5. Not sure whether today’s down can be considered as touching 50dma as I said on Friday. I am more inclined to believe that market will go down in next day or two and touch 50dma. Action at 50dma is going to be interesting ONLY SHORT TERM. Looking at SHARP rally (which are typical in abundant liquidity but no economic growth etc etc) today, I am inclined to believe that if market touches 50dma, there will be SHARP rally taking it to 1920. But MARKET will sink about 8% after that.

    Unfortunately, for BEARS, that will not be top for the year. Given abundant liquidity, people will buy as if no tomorrow (when SPX falls about 8%). And thats the time multi year top will be made.


  6. Kevin M says:

    The correction into June has officially started. It will accelerate into the last week of May and then make a final low near the end of the quarter.

    Be prepared, buy bonds(they are on sale today)or short the IWM.

    Take care and good luck

    • correction has started at 1882? what am i missing Kevin please help me here.

      • Kevin M says:

        Truth-BTW I like your name…Anyway yes in relation to time, the correction has started. There should be alittle more downside this week, followed by a brief rally next week. But after next week it’s down until the end of June.

        Folks remember I’m a bull and I believe this market goes to a mania phase however this year forget about it.

        O please pull my quote out June 1st. SPX down atleast 5% from 1890 by the end of May or June and no bull phase up like Tony is saying. Tony will simply change his waves.

        Take care….

    • jeffbalin says:

      Thanks for wishing us good luck! We are really going to need it if we are going to go short during a med term bull market!
      Be careful what you say…. JK’s gonna pull your post today out of his hat June 1!
      As a bear at heart I’ll be the first to go short with excitement when the time comes, but right now Tony’s wave map looks good to me. You’ve been pointing out some great warning signs, but it doesn’t mean the med or long term bull ends tomorrow, next week, next month or in several months. When the charts show bear it will be time to change but not until then and it looks like your warning is a little early.

      • IF ( Im saying IF……) market crashes and you are not holding short, u will lose twice, your long will be crushed and you miss the giant Drop. Upside vs downside? 5 year bull run, Fed Printing, War, Seasonality, Downturning economy facing struggles, bloated government, the list goes on. Why not be short???? Best of Luck to all.

      • tommyboys says:

        lol newbie…you’re kill’in me!

      • simpleiam says:

        Yo JK! Pull the post! Going short in a bull market with no confirmed downtrend… Yeah, right. Good Grief!

  7. Very hard to find a bearish case here. seems to be 2013 playbood of buying the dips. market does not seem concerned about much at this point.

    • Truth the market never seems concerned near tops.

      • imanewbietrader I have to tell you that you are by far one of my favorite contributors to this blog and I enjoy reading your comments. But you are never right. Bears have had their chance my friend. I was one to say that it would take a MAJOR event to send this market down but now I have my doubts. I dont see anything that would cause a panic

    • Kevin M says:

      Truthtrader-How long have you been trading? Sounds like you are a newbie. The Market never ever shows you 100% whats going to happen next, despite the pundits here. Usually it gives you clues. Always remember hindsight is everybody’s best friend when forecasting. Changes wave count mid-way is the name of the game. It’s all relative to the observer.

      BTW the ultra bullish nature on this board is also a very good indicator where things will go from here.

      • Sir at my age I do not forcast trends. I look out the window in the morning in order to decide how to get dressed. incremential changes have to take place in order for the Market to correct. I just do not see it.

      • Kevin, Im bearish, but I can tell you this board has been bullish pretty much the entire Bull run. That being said, it would be hard to conclude their bullishness is any insight to the future.

      • Both Kevin and Iamnewbie I do no think the economy warrants stocks at these prices. But the stock market is not the economy. growth is slowing inflation is rising just ask anybody who drives to work and eats everyday. But this market has underlying strength and support of the Fed to fall. Put to call ratio at a joke level. there is nobody buying protection and nobody seems to care to

      • tommyboys says:

        Truth this is then EXACTLY when selling occurs – during complacency. What part of that do you not comprehend? Bubble talk picking up steam amongst pros…

      • tommybody is it me or does it seem no matter I say you and I never see it the same? I am starting to take it personal. LOL

      • iamnewby wrote “Kevin, Im bearish, but I can tell you this board has been bullish pretty much the entire Bull run. That being said, it would be hard to conclude their bullishness is any insight to the future.” Hmmm, that’s an illogical conclusion. (if this board’s bullishness was mostly right over the entire bull run of the past few years, why then does that mean this board is now all of a sudden wrong about the future?)

      • Soul,
        I wrote “Kevin, Im bearish, but I can tell you this board has been bullish pretty much the entire Bull run. That being said, it would be hard to conclude their bullishness is any insight to the future.”

        Soul says: Hmmm, that’s an illogical conclusion. (if this board’s bullishness was mostly right over the entire bull run of the past few years, why then does that mean this board is now all of a sudden wrong about the future?)

        My reply: I never said the board is right or wrong about the future. I was simply replying to Kevins comment, Kevin said “BTW the ultra bullish nature on this board is also a very good indicator where things will go from here.

        In conclusion : Kevin implied market should be going down soon due to the ultra bullish sentiment on this board. I replied to Kevin, Im bearish, but I can tell you this board has been bullish pretty much the entire Bull run. That being said, it would be hard to conclude their bullishness is any insight to the future.”

        Translated in easy terms , This means this boards sentiment is usually always bullish therefore their sentiment doesn’t mean the market will go up or down.

    • tommyboys says:

      Yeah this is the kinda paranoia you find at tops – NOT – not even close. You will LOVE the Fed at the top. How long from now might that be? Wait for euphoria and mania maybe a couple years from now. Way over – out.

  8. tommyboys says:

    ISM beat…
    “The Institute for Supply Management said its services sector index rose to 55.2 in April from 53.1 in March, topping expectations for a read of 54.1. The data provides further evidence that economic activity is regaining momentum after lagging through much of the winter, a lull largely blamed on harsh weather.”

  9. so far 1866 support per my chart has held… now question is will we top out at 1896 (TED) or head straight to 1921 (ED)….You don’t have to like the pattern nor chart only pay attention to price targets and right now they both look promising.

    • tony caldaro says:

      1869 pivot held
      should be

    • same thoughts JK (and sadly enough this is only the 2nd true technical non-opinionated post after scrolling down from the last one posted so far…)

      micro a: 1880 (11 points)
      micro b: 1886
      micro c: 1868 (18 points, which is 1.6x a and which equals pretty perfect in my book.)

  10. tommyboys says:

    Insiders been buying the past several weeks of this rotation…

  11. makiori says:

    102 $\¥ is key. If broken on a close basis indexes will find it hard to rally. A significant move away from it on each direction is a green light for indexes, below 102 stocks go down , above we go up.

  12. thanks for the update tony! I am late to the party, since I had my own this weekend :-), but reading unfortunately a lot of bashful, inknowbetter, posts which tells me nothing has changed. Sticking to your count and the weekly AI which gave a buy-signal earlier this week is as usual most profitable IT to LT. Can’t be bothered with ST. Of note is that the daily AI may have produced a sell-signal Friday, but SPX need a sustained trade/close below 1850s to void the weekly buy.

    One word of advice to many; please don’t infer the markets’ overall bearishness or bullishness from this blog. Cause it ain’t the market, neither are ALL the other blogs, sites, etc you may read. The market is the entire world. It are millions and millions of people from all over the world that make the (U.S.) market. We will therefore never understand the combined market psychology, but we can track it counting the waves.


    • simpleiam says:

      The story of what? Analysis based on gasoline?
      (Over) Simplified!

      • Cmon man, you know gasoline usage correlates with the productivity of the economy.

      • simpleiam says:

        No, imawannabetrader, gasoline does not necessarily correlate w/economy or productivity, esp. at this time of year during the change-over, and since the numerous improvements in vehicle mileage and more economical plant manufacturing. I work for one of the largest petroleum corps. in the world and any of my guys who travel the world to find and produce petrol will tell you that.


  13. Kevin M says:

    The overall equity market will not get a sustainable rally over 1900 without additional money flow. And the partly amount being printed by the fed now is just a drop in the bucket. So where will it come from? Money market accounts? Nope, adding now at recent highs is not very constructive. Furthermore it’s not the beginning to a seasonally bullish time for the market and fund managers know this. Asset allocation? Well, if you would have asked me this two month ago I would have said yes. However, we know buy the bi-polar Nasdaq/small cap stocks that this option has already taken place. Ok where else? The bond market is the next viable option. Unfortunately The bond market is now seeing inflows and with a confirmed uptrend in place, this option is a no go for inflows to equities. So expecting a rally from here is absolutely crazy and irresponsible, given what we know now.

    I was a bull last year into the first part of this year however one must respect market seasonals and money inflows to get a bigger picture of what will happen next. Again the market is not making all times highs here. There is stiff resistance everytime it happens intra-day. The writing is on the wall. Once we get to the end of the quarter and things are where we are now then I will turn very bullish, until then it’s choppy to down. imho the spx will be down atleast 5% by the end of May and the naz/small caps will lose another 8-10%.

    Good luck mates and think for yourselves

    • tommyboys says:

      This “seasonal bias” is way overplayed…everyone calling for this. The May-October period has been a net positive 59% of the time since 1950 – look it up. I’d call that a neutral to positive. Secondly the AD made yet ANOTHER new high this past week. It wouldn’t be impossible, but a decent struggle for markets to plunge 10% over the coming months with this kind of breadth showing. When markets turned south in 2000 the AD had already been negatively diverging for nearly 2 years – it topped in ’98! Thirdly sentiment right now is no where near where it needs to be for an important top. Lots of bears everywhere and most bulls are skeptical at best. Fourth, cash hoards on the sidelines are still high and hedgies have fallen only further behind. I’d say it’s more like 2013 gains are about done being digested and we’re ready for the next leg higher. Time will tell but internals argue for the ongoing bull to continue – potentially with gusto.

      • Kevin M says:

        The $nyad is not a guarantee + it has a bond market component in it and many high yielding funds. We know by previous times in the past i.e 2011. All time highs right before the drop. 2010 the same thing. I could go on and on. You gotta get out of you mind the sentiment issue. I could show you several sentiment indicators that are opposites but many people claim them as gold. They are not perfect. Also you gotta get out of your mind that we are entering a bear market like 2000. I;m not suggesting this.. I’m suggesting a simple correction of frustration into the end of June and then possibly the fall. If we rally into May and June like most here suggest, it would be highly unusual.

        BTW, I don’t expect you to do this, but look up the years 2010, 2006,2002,1998 and 1994. 20 years of mid-term action that was almost spot on from May 1st until July/August. Everyone of those years represented a good sized correction after the previous strong % basis post election year. odds are going against you.

        Good luck,

      • tommyboys says:

        Could be but i’m long for 4 years and don’t trade. Lots putting their stock
        In the presidential cycle -thats fine. I adjusted a bit a month ago anticipating some volatility and have already seen my micros pullback 30-50%. I have added back on these dips and gotten some unreal bargains. If they want to take’em down another 25% great I’ll be adding again and what the market offers over the next month or two – IF it happens – will payoff numerously again over the next two years. GL

  14. Joel Wenger says:

    Reblogged this on The Safe Investing Blog and commented:
    Per Investors.com (IBD), the general markets are still searching for confirmation of an uptrend, so the market outlook remains in a correction for the time being. However, Elliot Wave has diverged and now indicates we’re in uptrends across the board (short, mid, and long term).

  15. ocaj2000 says:

    +=^-?>”=#$ ((*&%$_+)#@)) (Sorry for the wordiness.)

  16. opader says:

    Thx Tony … A question for you: In SPX Daily you show Intermediate II as a “tentative” count. What is needed from SPX that would make that count not tentative?

    My thoughts: Is A Top Being Formed? – http://balancetrading.blogspot.com/

  17. joseph3000 says:

    “Tony wrote: COMMODITIES

    Bonds have confirmed an uptrend gaining 0.5% on the week.”

    Tony, which chart do you track for Bonds? Thanks

    • I heard Jeremy Grantham gave a crash date in 2016 this past Friday. Something to do with Presidential Election. Looking for the link to this information. Thank you.

    • simpleiam says:


      Oh please! It’s called a Bear Market, Grantham, not a Crash! I’m so glad I didn’t listen to this guy, or the others, else, I would have missed this entire CYCLICAL BULL market & a 300% gain (very conservative core stocks) since 2009. (250% actual realized gain.)

      Tony, you’re well ahead of this dude!


    • tommyboys says:

      Simple, go back and check Thursday’s discussion – my comments were in support of you and your experience. Was referencing the inundation of shorts and their drama. On another note I have generally liked Grantham although he isn’t usually a drama queen but…

      • simpleiam says:

        tommyboys, if I misunderstood you, I apologize. I’ve been quite ill lately with 2 hospitalizations in the last 2 months and a surgery that removed part of my intestine. Please pardon me and be patient as I recover.

  18. Tony’s Major 5 projection for the NASDAQ at 4470 is only 50 points higher than the Major 3 projection at 4420. That seems like kind of a weak finish to Primary 3 for the NASDAQ. It sounds like he doesn’t expect the NASDAQ to regain it’s former strength.

    • torehund says:

      Georg, estimates may change peri passu; from October 2013 there has not been any sign Growth worldwide. I hope its consolidation in front of real Growth where all contries add 2 percent the comming year. That would bode well for NAZ, some of the Stocks I own are approaching exponential Growth, like CBMX that has a 250 mill market opportunity ahead (mcap at 30 mill). ROSG has a similar prospect for itself ( at mcap 40 mill). At any rate stockpicking is important and some may do well whatever, if there is not an impending implosion. Sure if world is halted further we will enter a bear, lets hope the pundits are wrong.

  19. Well 2 weeks down the road and where are we? Oops nowhere, yet the market has traversed several hundred “money making” points. Although EW says…. well…. nothing as usual. Trying to fit 123’s, abc’s, zzz’s it’s putting me to sleep. Oh yes don’t forget the “ending diagonal” which the whole world can see…… Therefore my advice, buy support, sell resistance, won’t put you to sleep cause you make real money that way. EW is good at telling bed time stories to those who want to (need to) listen. Get out while you still have the shirt on your back, cause EW has ripped many shirts off unsuspecting newcomers, and those who still believe in the myth.

  20. Pingback: Stock market analysis, Investor insights. Risk manangement and stock market risk mode | The Risk-Reward Report

  21. Below is link to my SPX Truncated ED scenario. I give T-ED a 25% chance and 75% change to norm ED

      • blackjak100 says:

        Your charts make no sense! You can’t have an ED inside an ED. Wave V must subdivide as a zigzag. So far, a & b within V are complete

      • BJ, I think you might be misinterpreting my chart or I’m misinterpreting the rules. It is my understanding that waves 1, 3, and 5 of an ED are always a Zigzag family pattern (simple or complex). With that rule in mind, I am only trying to indicate that the zigzag pattern of the ED’s fifth wave can morph into a more complex zigzag pattern in which the price action can shape a wedge that would result in a Truncated Ending Diagonal (TED) fifth wave price ending at 1896.07 short of surpassing the ED’s third wave price of 1897.28.

        Below is a link to today’s update of a trader name Karsi whom I also like to follow closely. You will note that Karsi never makes mention of ED, TED, triangles, wedges, etc on any of his post; nevertheless, if you look closely at the charts and the price action Karsi is predicting on his chart you can draw out the ED, wedge and TED patterns I show on my chart. Also, take note that our price predictions are relatively inline.


        Nowadays, I have just one simple rule, the market is a live creature with it’s own rules and does not always abide to the textbook rules.

  22. torehund says:

    Tony thanks for the extensive update.
    My hope is that primary 3 on NAZ at least will Reach 5200 or shy of 6000. However the primary 3 on NAZ has lots of options for ambivalence. The most exuberant view is that only 2 Waves of primary 3 has been completed on the NAZ including the current correction.
    We have a big chunk of Stocks incepted With IPO around the year of 2000. Many of them are at the verge of bearing fruits and do some healthy retraces. If we do get some real exuberance the NAZ should be the leader, but if things fizzle out already now, well then it will not look good for a lot of Companies.

    • M1 says:

      torehund, are you still following gdxj ?.. what do you think ?

      • torehund says:

        Its in the back of my head, but at this time I am neutral. Remember Gold still has that potential bear market scenario running, but a wave 2 making a lower high to the top in Gold is still a descent bear retrace to enjoy. Market hasnt made up its mind and I am patiently waiting.

      • M1 says:

        Gold has been in a bear market for abt 2.5 years.
        The next wave up could be something more than a bear market rally. It may last years.
        I still like gdxj.

    • tony caldaro says:

      Think we are in a normal cycle of not chasing growth and shifting to cyclicals as the economy grows.

    • torehund says:

      Amount of invested bears is currently low, they are “hibernating”, however if we do enter a long gap up phase to finalize the prim 3, I would expect they are awakened. GDP of 4 percent in the US and 2 percent in the rest of the world would do Wonders. And if that doesnt materialize soon, there will not be any other Place to park Money that I can see.

    • torehund says:

      An observation to take notice of; Wave primary one was finished by a very short 5th wave. Looking at the macd from that time, there was very little Space (roofed already) for the 5th to travel. At this time there is ample macd Space to make the 5th quite strong, especially on NAZ where the macd descent is underscored by the price decline of the last correction..

  23. Repost from Friday update:

    Vic Allen says:
    May 3, 2014 at 4:03 am

    I am not sure how a + 1.1% factory order number is higher than a + 1.6%??

    tony caldaro says:
    May 3, 2014 at 6:31 am

    month over month change, i.e. 101.1 is higher than 100

    georgeschaeffer says:
    May 3, 2014 at 4:09 pm

    I think it means that the previous month to month change was 1.6% while the most recent month to month change was 1.1%. While that increase over the previous month was less than the earlier comparison, it is still a positive rate of change. Therefore factory orders are higher.

  24. bouraq says:

    Weekend charts:

    • 16golfer says:

      Thanks bouraq! When the index hits the lower blue line of the ellipse, where does it go from there? New highs?

      • bouraq says:

        I have seen both continuation and top making ellipses before. I have posted 2007 and 2011 tops in ellipses in the past. The next hit should be a bounce back up but not necessarily a new high. It may stay in the ellipse for a while, hit the bottom again and break it down. That would be a major top I reckon.

      • 16golfer says:

        Thanks again bouraq! As they say, a picture is worth a 1000 words and your input is greatly appreciated.

  25. mharrison60 says:

    Reviewing the Dow ED and market talk of early May as key timing for expected cycle led direction change, it would not be a surprise if this is it for P3.
    Whilst the last high at 16620 did not reach the level of C at 16631although truncation is possible. However need to see some downside fireworks before confirmation.

    • Hi mh!
      If you only look at Dow closing figures, there was a nice touch of the upper channel line with the e-wave.

      • elmer510 says:

        What do you think about the swedish OMX – do you see an ED also there?

        If you compare with Oslo, there’s a break up now and no ED. So if Oslo is a frontrunner – it should be the SPX-count and IM 3 that’s under way.

  26. Good afternoon Mates, it me LoLo (aka LoLoTrader). Yes, I changed my screen name to my trader nickname “EL Matador.” Just want to let the board know so that no one gets spooked and to share a very interesting article I came across this morning.


    Is it just “Noise” or “Warning Shots?” You be the judge, but as the author summarizes it…..”These days, “accommodation” doesn’t do justice to ongoing unprecedented monetary stimulus, which ensures that manic equities and Credit markets completely disregard major fundamental changes in the global landscape. China doesn’t matter. Ukraine and Russia don’t matter. A conspicuously underperforming U.S. economy doesn’t matter. The approaching end to QE doesn’t matter. An alarmingly deteriorating geopolitical environment doesn’t matter. As they say, “It doesn’t matter until it does.” Yet, through it all, don’t lose track of an important fact: They all matter – and together they will matter a great deal.”

    • simpleiam says:

      Gracias, LoLo/El Matador! Clear, concise, good info. w/article link (not article print out). That’s-ah what we like-ah! Thank you! Okay, I must adios now…

  27. gtoptions says:

    Thanks Tony ~ Great market summary.
    SPX/NDX/DJI Weekly RSI/CCI remain strong and expanding week over week. 😉

  28. M1 says:

    Thanks, Tony.
    NAZ still looks in correction mode. And I still have the same scenarios.
    A first drop/wave of 425 points in abt 40days. Then a countertrend rally of abt three weeks and 231 points so far.
    This past week I was open to see a retest of the lows before another important rally, however I am afraid now the next wave down may take the lows of april suggesting the first structure to the downside could not have finished yet.
    I guess the next two or three weeks the market should give us an answer where it is headed.
    Have a nice weekend.

  29. simpleiam says:

    “Also note, the shortest wave during this last rally was the fifth wave. When this occurs sometimes the market pulls back to the previous second wave (1871). So a continued pullback to the OEW 1869 pivot would not be anything unusual. For now, we are labeling the SPX 1891 high as Minute wave one of Minor 3, and will wait to see where Minute wave two bottoms. Until SPX 1891 is exceeded we can not be certain that Minute two has ended.”

    Thanks Tony! As always, your Update is filled w/insights. Yes, lots of sites are waving the ending diag flag, and expecting the Late-Spring/Early-Summer Swoon, which is a reason I give it only 50%. Even so, if the target high for spx is anywhere near 1920, that’s 40 points in which to make some moolah; and then there’s CL and a bunch of other options to consider. I also consider that should a pullback not materialize until late Summer, it’s possible that lots of people will get tired of being stuck in bonds and decide to pay up for div stocks or other stocks. I think it’s possible that Nasdaq might have been a hell of a buy at this last bottom! Will see. Thanks again. Signed, Pollyanna



    • tony caldaro says:

      The DOW is obviously the key to the diagonal

    • blackjak100 says:


      Again, the reason many are waving the ED flag is because that’s how it subdivides from 1646 in the $SPX. You could argue the rise from 1646-1851 is a five wave impulse as Tony has it labeled, but the next 2 downtrends and 1 uptrend are clearly 3 wave structures. Therefore, you see if 1646-1851 can be a 3 wave structure which it actually can quite nicely. So far 3-3-3-3 and what looks to be another 3 forming where a=c at 1920ish.

      Trading is about probabilities and right now I think the ED has the highest probability until proven otherwise. I’m still long the $SPX from 1855ish because I believe we will see 1900+ before things get dicey!

      • simpleiam says:

        Hi bj. I understand what you’re seeing, as I’m seeing the same formation. While the ED on dji might indeed play out, I don’t think it’s going to be a correction (yet), and once again, traders will be disappointed; or else, as you’ve said, we get the high before ED kicks in. I just don’t believe the ED will be a 10%er (yet), but I’m open-minded about it.

        I’m not the daytrader that many of you are, and have core positions that can easily withstand a hard pullback, even a hard correction; although I don’t really want to go through a 15%+ downturn. If it’s 1900, that’s great for me, and for some others here too, I’m sure! GL in your trading!


    • Agree that Tony’s OEW tutoring is worth taking. It is outstanding/very intelligently compiled. You will learn something that makes you a better trader.

  30. ariez5 says:

    Jedi and Ilerias, thank you for the way you express your different view of the charts from Tony. No accusations. No addressing “you bulls” (because as traders, you know to switch to a bullish stance when it is indicated). No attacking Tony. You just state your case, provide a reason (preferably technical), and move on. If some bearish contributors would learn from you, I think all visitors to this blog would be relieved.

  31. RDC says:

    Thank you Tony for another Outstanding Weekend Report.
    Next week Markets are due for some decent size pullback.

  32. bhupal777 says:

    Interesting analysis Tony. Thanks for a great report. Most of the EW traders that I follow looking for SPX to top around 1920 with an Ending Diagonal scenario. But your NDX count is definitely superior EW analysis, But when looking at most of the sectors except Energy they seem like ran out of gas. I am really curious whether in NDX or SPX, what sectors can contribute this remaining upside. Earnings are almost over. No other major event to act as catalyst for stocks. Interesting juncture. We probably will know in couple of weeks if this market wants to follow your count or not. Have a great weekend.

  33. elmer510 says:

    Thank you Tony for another great piece of work.
    And interesting to see how your bullish view the lasts weeks has proven true.

    Looking at the macro-perspective, US is finally picking up steam, a lot of positive reports recently, like OECD and Conference Board. This means US could enter a strong upturn for a couple of years with GDP-growth exceeding 3% p.a. With increased hiring demand for goods and services will grow and perhaps neutralize effects of tapering. And fiscal policy will be less tight.

    On the other hand there will always be strong corrections now and then, and we’ve waited long time now since spring of 2012. So summer of 2014 can be negative for the stockmarket, as Tony wrote.

  34. llerias7 says:

    My feeling market is too tired to climb further…my guess will make another high around the oew1929 and that is it…fundamentals do not support higher levels…But…is just a guess!

  35. Thanks for making my morning coffee interesting with your intelligent analysis, Tony. Have a very nice weekend.

    -OEW Coffee Club Member

  36. tuamotu says:

    I noticed this comment from Sverkericsson:

    The year that most closely resembles 2014 of late is 2012. There was choppy action into April/May then next week suddenly things blew up and there was a large correction. Can’t rule it out.

    Do you elimininate this scenario now ?

  37. rolandu11 says:

    Curt new all-time closing high in the DJIA this week. But the Bears have immediately afterwards made ​​itself felt. My indicators are still good. One has only to look at the NYSE or the DJ Comp. Av .. The DJ Comp. Av. is stronger as DJIA and has made new all-time highs in December, March, April and May.
    Does it make sense, these counting with OEW, Tony?

  38. jparkins10 says:

    Super summary Tony, very clear & understandable, thanks

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