weekend update


Another good week for stocks. The third week in a row the market has gained about 1%. The market displayed some choppiness early in the week, dealing with the OEW 1929 pivot. But then cleared it on Thursday, as it made new all time highs every day again except Tuesday. For the week the SPX/DOW gained 1.25%, the NDX/NAZ gained 1.75% and the DJ World index gained 1.35%. Economic reports for the week were mixed. On the uptick: ISM manufacturing/services, construction spending, factory orders, auto sales and consumer credit. On the downtick: the ADP, monthly payrolls, investor sentiment, the M1-multiplier, the WLEI, plus weekly jobless claims and the trade balance worsened. Next week we get reports on Retail sales, Export/Import prices and the PPI.

LONG TERM: bull market

The bull market of March 2009 continues. As this market enters its 63rd month it looks nothing like the 60 month, 2002-2007 bull market. That one basically started around the 1996 low and only managed to get about 1% above the 2000 all time high before it topped. That bull market was the end of a cycle. This bull market has been making all time new highs for over a year now. And, it certainly looks like the a new cycle wave: Cycle wave [1].


We have been counting this bull market as Cycle wave [1] since early 2010. Since Cycle waves unfold in five Primary waves we have been tracking it exactly that way. Primary waves I and II completed in 2011. Primary wave III has been underway since then. Primary I divided into five Major waves, with a subdividing Major wave 1. Primary III is also dividing into five Major waves. But after a simple Major wave 1, Major waves 3 and 5 have been subdividing. During Primary III, Major waves 1 and 2 ended in late 2011 and Major waves 3 and 4 ended in early 2014. Major wave 5 is currently still unfolding. When it concludes the market should experience its largest correction since 2011 for Primary wave IV. Then Primary V should take the bull market to even higher highs. Our target range for Q3/Q4 2014 remains SPX 1970 to 2070.

MEDIUM TERM: uptrend

This Intermediate wave iii uptrend began at SPX 1814 in mid-April. Its initial rally, Minor wave 1, lasted about one week. Then it went into a choppy sideways mode for four weeks. Many gave up on it, but we didn’t. We knew the NDX/NAZ had two more uptrends before completing their Primary wave III. And, they were the indices most heavily sold during the recent correction. While all this choppiness was unfolding we observed three potential counts. The most bullish one remained on the SPX charts, with two less bullish ones posted as alternates on the DOW charts. The least bullish of these two, and most popular, was eliminated this week. The DOW still has the potential of forming a diagonal triangle Major wave 5. Since it has only cleared its April high by less than 300 points.


We continue to count this uptrend as Minor waves 1 and 2 completing at SPX 1885 and 1851. Minor wave 3 has been underway since that low. Minute waves i and ii completed at SPX 1891 and 1862, with Minute iii underway since that low. Minute iii has been subdividing into five Micro waves SPX: 1886-1868-1925-1916-1949. When Micro wave 5 concludes Minute wave iv should follow. Then a rising Minute wave v completes Minor 3, and a declining Minor 4 should follow. Finally the uptrend ends with a rising Minor 5. Medium term support is at the 1929 and 1901 pivots, with resistance a the 1956 and 1973 pivots.


Short term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots. Short term momentum ended the week extremely overbought. The short term OEW charts are positive with the reversal level now SPX 1943.

As this market continues to make new highs nearly every day it is easy to get carried away with the rising tide. The easy part of this uptrend, if one could call it that, was the past three weeks. Three weeks ago, we knew the NAZ had to rally about 7% to near its bull market highs. Now it is about 1% away from that objective. In the meantime the SPX has already entered the range of our uptrend targeted 1956 pivot. Quite a run, yes. But this uptrend is extremely overbought on both the hourly and daily timeframes. And, the weekly timeframe has hit quite overbought.


Overbought conditions like this usually lead, at some point, to a significant pullback. We just reviewed the Fibonacci relationships of the waves. We took into account not only the Micro, Minute and Minor waves of this uptrend. But the Intermediate waves of Major wave 5, the Major waves of Primary III, and compared Primary III to Primary I as well. We arrived at two important price clusters just ahead: SPX 1954-1958 and SPX 1966-1973. Both of these clusters fit quite nicely with the 1956 and 1973 pivots.

We conclude that Micro 5/Minute iii should end within the range of the 1956 pivot. Then after a Minute iv pullback, possibly to the 1929 pivot range, Minute v/Minor 3 should end within the range of the 1956 or 1973 pivot. So it does appear some volatility is ahead as this uptrend concludes. Best to your trading next week!


The Asian markets were mostly higher for a net gain of 1.0%.

The European markets were mostly higher for a net gain of 2.1%.

The Commodity equity group were all higher for a net gain of 3.3%.

The DJ World index continues it uptrend gaining 1.35%.


Bonds appear to be down trending and lost 0.8% on the week.

Crude continues to downtrend and lost 0.1% on the week.

Gold remains in a downtrend but gained 0.2% on the week.

The USD is still uptrending but finished flat on the week.


Tuesday: Wholesale inventories. Wednesday: the Treasury deficit. Thursday: weekly Jobless claims, Retail sales, Export/Import prices and Business inventories. Friday: the PPI and Consumer sentiment. The FED has one activity scheduled. Monday at 12:45 FED governor Tarullo gives a speech. Best to your weekend and week!

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

About tony caldaro

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117 Responses to weekend update

  1. lunker1 says:

    Hey Lee, did someone say something about 1956 or something?

  2. blackjak100 says:

    So much for the RUT stalling short of its highs – it now looks like a test of the all time high is on deck

    • We’re all watching this like a hawk and da boyz know it! Likely when it finally gives, it will be swift — no warning — IMHO. So, tighten up those stops if you are long.

  3. Ryan Parker says:

    Going out to mow the lawn. I just hope I am 1/2 the groundskeeper that Lee is.

  4. H D says:

    1955.55, IDK maybe they are signalling that was 5?:mrgreen:

  5. mjtplayer says:

    I can’t believe how overbought this market is, mid 90’s on the hourly and daily RSI; mid 80’s on the weekly and monthly = OVERBOUGHT!

  6. torehund says:

    Complete and utter manipulation of the past, last trading day NEWL had a mcap of 100 mill, now its reduced to 21 mill. Welcome to 1984, “if you Control the future, you also Control the past”

    • CygnetNoir says:

      NEWL is heading for a market cap of $0, and when it gets there, it will be no surprise to anyone.

  7. mjtplayer says:

    Copper continues to break down, the countertrend rally is over. Would expect a test of $3 before a bounce of significance back up to $3.10 or so, but the trend is down with new lows ahead: below $2.88

    Staying short copper, but will cover at $3 or so and re-short any bounce towards $3.10

  8. elmer510 says:

    Thank you for all the great work you do, Tony

  9. Really impressive work Tony. Outstanding, in fact. Thanks.

  10. jparkins10 says:

    Interesting weekend update from Springheel Jack: http://t.co/vnO6PDQBT7

  11. valunvstr says:

    Is it just me or does the NDX look like it is VERY vulnerable? It has made new highs and KST, TRIX, ULT, RSI and MFI on the weekly charts are all massively broken down. Usually the high beta leads and I wonder if this breakdown is a sign that beta is about to roll over again as a prelude to a summer correction. Weekly divergences are only valid when the top to top is 3 months in duration. The prior top on NDX was exactly 3 months ago. The divergences have gone on for too long on S&P 500 to be meaningful. NDX is the only chart that can be read at this point.


  12. thanks for the excellent update tony! who would have thought even a year ago the market is where it is now!? rather impressive, and it’s still not even done yet… (iv, 4,5, iv and v still to go!) cowabunga!!

    • I don’t get what kind of an a-b-c this other than that is “complex”. The a leg seems to be an up move while b and c appear to be down moves. I am not familiar with that kind of pattern.

    • torehund says:

      Georg the complex abc has an a that is at Equal length With c, and a larger B -midpiece, Perfect ambivalence as its also a 5 wave structure Complete. Look at China from their post 2009 top it is also a complex abc of same type until today.

  13. It would appear that Tony does not expect minor 5 to rise much above the peak of minor 3. Minor wave 3 has already exceeded minor wave 1 in length, so minor 5 is allowed to go as high as it wants. But, of course we aren’t finished with minor 3 yet. On the back of 2 very strong A-D days, the Summation Index broke above it’s high-level base when it cleared 850 and is now moving up towards it’s early March high of 1050. If it succeeds in breaching it in this upthrust, the implication would be that minute 3 (SPX) would move well into, if not past, the 1973 pivot range, thereby exceeding Tony’s expectations. Of course, the overbought condition of virtually all indexes would argue against that possibility.


  14. H D says:

    Very nice update Tony and great job staying bullish through the chop. Nearly vertical now. Reminds me when Gold went vertical. Surprised the most bearish count was also the most popular. All I see is people buying hand over fist.
    what’s the gauge for popular counts?

  15. opader says:

    Thx Tony, excellent analysis for indices. My thoughts: http://balancetrading.blogspot.com
    Indices Are Overextended

  16. buddyglove says:

    Thanks Tony, great work lately. Honourable mention must go imo to a the very humble, but quite excellent index futures trader “Bob Hopium”.
    On Monday 28/04/2014 he posted :-
    “Thanks Tony and greetings all….Here are my current thoughts for those interested.
    Still very bullish and I see synchronising bullish structures aligning on a global scale.
    I am now positioned long in Dow,Ndx,Nikkei and Dax. and am looking for substantial Upthrust thru the sideways/consolidation phases seen building since the beginning of the year and this would appear to concur with Tonys current bullish stance…Good health and Good luck to all.”

  17. ariez5 says:

    Thanks for the summary. Do you think a spike in interest rates over the next few months could be the cause for P3 to end?

  18. jeffbalin says:

    When I count the spx I feel like there is one more small little down then one more up needed to complete minute 3. Meaning I’m feeling we might be in micro 3, with micro 4 and 5 to go or, we are in nano 3 of micro 5, with nano 4 and 5 to go. However, that sure is one nice big fat black RSI blob on the 60 minute RSI, with what looks like a divergence.

    • jeffbalin says:

      Scratch being in micro 3. We might be in nano 3 of micro 5, nano 4 and 5 to go, if I’m seeing this right.

  19. mjtplayer says:

    For those of you who follow Martin Armstrong, he sees a “panic cycle” in Oct. This simply means a turn of some kind based on peak panic, this could be buying panic (top) or selling (bottom). Given Tony’s wave count, I’m guessing this could be the bottom of P4, meaning P3 tops in July/Aug.

    Longer term, as many of you know, his ECM points to a major turn in 2015.75 (Sept/Oct of 2015) and doesn’t bottom until Jan 2020. In his words, this downturn will be worse than the 2008/09 recession and possibly worse than the great depression, especially in Europe. The peak in economic activity can be many months before/after a peak in the stock market, so P5 could top anytime in 2015 or even into 2016. But, when it does end, the disaster that awaits will be of epic proportions.

    According to Martin, this crisis and downturn will be triggered by a sovereign debt crisis, especially in Europe.

    Looking at the presidential cycle, it makes perfect sense to top in the time frame as well. Over the past 50+ years, Obama will be the 4th president to serve and complete 2 full terms (Reagan, Clinton, Bush Jr.). During each of these reigns, there was a bubble of some type that they could not “hold up” till the end of their term; in each instance it popped before they left office:

    – In the 1980’s under Reagan, the stock market topped in Sept 1987 – 1yr and 2 months before the election to replace him.

    – In the 1990’s under Clinton, the stock market topped in Jan/March 2000 – 9/11 months before the election to replace him.

    – In the 2000’s under Bush Jr., the stock market topped in Oct 2007 – 1yr and 1mo before the election to replace him.

    The average of there prior 3 events is roughly 1yr prior to the election that replaced them. Under Obama, that would be late 2015 before the 2016 election, so Sept/Oct of 2015 would be a perfect time to top.

  20. thoth8 says:

    Thanks Tony,
    Great job! Have a nice weekend : )

  21. Tony: Thanks for the hard work you have done to be able to put together such a precise and clear OEW weekend analysis. Thanks for being such an objective thinker and thanks for your generosity in sharing the fruits of that with us.

  22. perceval7 says:

    Hi All, I have a question about the Alt Count on the DOW. If the DOW finishes its minor C, does that end the intermediate C / major 5 / PIII? What is the projected time frame for finishing minor C if this Alt DOW count becomes the primary count? Based on what I have read here, Tony is thinking the SPX in the primary count will see it’s intermediate iii in June, intermediate iv in July and intermediate v / major 5 / PIII in August. Also, where do you place the odds for the Alt DOW count at this point? TIA!

  23. The results of a couple of scans I performed tonight has interesting results. its been the habit of some to buy stocks that haven’t moved in a while once prices of most others are at or near highs so one or more of these might give a pop. check the wave count & determine if you’re interested.

    Those showing TL support & down 10%+, new lows are marked, those w/div noted in %:
    DNBF 1.37%
    END new low
    FNJN new low
    MBIS new low
    RALY new low
    SYPR 1.47%
    TVIX new low

    Inverse H&S w/div noted in %:
    CNPF 4.06% (I love divs! Canada Preferred ETF.)
    FI 1.22%
    IHC 0.49%

    • torehund says:

      When looking for Fish in the abyss, look to debt, the latter is the killer. Normally nano Pharmas have no debth just continuous shelf offerings. With other Companies its sane to either expect an immediate upturn in their markets, or look if some debth washout is or will be done, that signals that large institutions see any value or is pretty sure of an imminent upturn. The company END (hilarious ticker) may be making a 2 bottom here or retest 55 cent as double bottom.

  24. Rancho says:

    Thanks Tony.

  25. alexh110 says:

    Tony, last week you said Primary IV is likely to last 3 months. That would seem to rule out an end to Cycle 1 in Q3.
    If we assume Primary III ends in late June, that would mean Primary IV ends in late September.
    How long would you guess for Primary V? Seems unlikely it would complete before December.
    Then I would guess Primary A of Cycle 2 lasts until June 2015, if not longer. With Cycle 2 completing in 2016/17?

  26. jobjas says:

    This new count seem to align all indices

  27. Like everything else, financials also running into resistance (still has room to go up, however)… and very long-term resistance at that. This is a MONTHLY chart.

  28. Just noticed that you’ve got TYX just before a significant wave 3 up. Would seem to coincide with a decent wav C up for the USD (and EUO). Okay. On your AMZN chart, it looks as if that 4th wave undercuts the wave 1 peak level. Is this allowed under E-wave sub-rules or something? Thanks.

  29. Lee X says:

    Thanks Tony
    If your mower blades are .50 as sharp as you I’m sure you have a wicked lawn.

  30. Hi Tony!
    Thanks for a great weekend update, with very specific goals.

    Looking at the market performance I have 3 major concerns that might be of some importance, and I would be happy to consult your experience on these. If possible.
    1. The breakout above the long term trendline in Dow (at 16750) was a “low volume” one, increasing the risk for it to fail. Has volume lost its importance?
    2. The low Vix Reading. Could probably go lower. Shall we disregard it?
    3. Number of “bullish advisors” now stands at 62,2%, which is the second highest Reading for the past 30 years. The other high Readings were August 1987 (60,8%), dec 2004 (62,9%), Oct 2007 (62,0%) and dec 2013 (61,6%). These high Readings are bad for stocks from a contrarian standpoint and have earlier on resulted in quite Sharp market corrections.
    Is this high sentiment Reading a factor that should make me start taking sleeping pills?

    Very best wishes Sverker

    • tony caldaro says:

      1. have never been a fan of volume, never thought it important
      2. VIX measures volatility, none now
      3. quite bullish, correction should be forthcoming soon
      lay off the pills Sverker =)

    • rolandu11 says:

      about the volume, there to read a lot but much wrong. It is very useful to know this (Look at my signals by my mid-term volume indicator in recent years). Something to think about:


      (Here in particular, Table 4)

    • sverker, here’s how i approach the “low volume issue”, which really is not an issue imho namely:

      1) price is all that matters first and foremost. everything else is secondary at best
      2) if only 3 shares are traded all day on say the spx and 2 are buy and 1 is sell, price will go up… then up it is.
      3) no indicator should be used alone, this includes volume
      4) SPX 1948.25 means the value of the SPX is $1948.25.
      5) Using that, multiply daily SPX’s value by it’s daily volume and you’ll get the total amount of $$$s that went over the table, so to say: e.g. $1948.25 x 2.0B = ~$4T
      6) Now look at what volume was at say SPX 1000, 1200 etc. and multiply that. Volume back then had to be almost double to get to the same value: $4T = $2000X2B = $1000X4B. etc
      So even if volume is lower now, the same amount of money or sometimes even more goes over the table each day now compared to then, even at SPX levels twice as high… that’s actually bullish imho…

      ps: that ascending triangle of a few weeks ago came to fruit real nice, or what!?

      • Thanks Soul! Yes, the ascending triangle really delivered a nice rally.
        Regarding volume, I only watch it at a short term basis.
        After the flash crash, back in may 2010, lots of high frequency traders got frustrated and stopped their trading. Many beleive, that the exeptional trading volumes by year 2010 was created by their machines, and now we are back at “normal” trading volumes.
        I will continue to watch this item.

  31. torehund says:


    Totalitarian media manipulatrs on the GO once more, here its linking the devastations of previous war-battles to global warming and a rising sea Level, as if two bad deeds are somehow Connected.
    Disgusting piece of journalism, and a papar minisculing free thought….

  32. Joel Wenger says:

    Reblogged this on The Safe Investing Blog and commented:
    Market Outlook:
    Short-term (20 DMA): The market averages remain above their 20-day moving averages and remain in a confirmed uptrend per IBD, although some volatility is expected per Elliott Wave and several technical indicators are at overbought levels.
    Intermediate (50 DMA): Market averages remain above their 50-day moving averages, and Elliott wave still indicates an uptrend.
    Long-term (200 DMA): Market averages are far extended from their 200 day moving averages, and the long term Elliot Wave uptrend remain intact.

  33. Outstanding weekend analysis, Tony. My hats off to your steadfastness and accuracy during a choppy market. 🙂

    -OEW Coffee Club Member

  34. RDC says:

    An Outstanding Weekend Update. Thanks Tony.

  35. Excellent analysis the past several weeks. I doubted the move to 1950 but you had it right. Much appreciate your views.

  36. bouraq says:

    11 Weekend charts:
    $DOW $SPX $RUT $NDX $OIL $GOLD $COPPER $EURUSD $GBPUSD http://www.tradingchannels.co.uk/2014/06/weekend-charts_7.html

  37. hats off to you tony.
    i really didn’t think we had the set up to blow off 1900 from that tuesday weak low in the 1960s three weeks ago.

  38. mjtplayer says:

    Thank you Tony, very insightful weekend update – you are the master!

    – OEW Coffee Club🙂

  39. Great Job Tony as usual..So you still expect inflection point sometime in June with both wave counts or do you see the Intermediate top in the month of Jul/Aug?

    Also wanted tocheck your opinion on Indian markets if you got a chance to track it recently.. Thanks a lot !!

    • tony caldaro says:

      Yes, uptrend high in June
      India is still rising, but still looks choppy longer term

      • pooch77 says:

        1-2% pullback than new highs into Fed minutes??

      • ocaj2000 says:

        I will express my appreciation as well: &%#.-)*zzz One question though: Is the uptrend high in June referring to Major V thereby completing Primary III or are you referring to one of the minor waves within Major V ?

        Once again: $%#.-)*zzz

      • ocaj2000 says:

        Thanks Tony. These wave sub-divisions get confusing at times. My understanding then is that Int. iii will be followed by downwave Int. iv followed by upwave Int. v which will then complete Primary III. Is my understanding correct ? Also, how much of a drop do you expect for Int. iv ? Sorry to bother you with the questions but I am still learning.

    • SuperWorm says:

      Since minor 3 targeting around 1956 or 1973 pivots, what would be the
      potential target for minor 4 and minor 5/int. iii?

  40. blackjak100 says:

    Great job TC! If the ED is correct in the $SPX, it will terminate at the 1956 pivot and most likely 1954-1958. This target should be met Mon AM and then we all watch and wait to see which count is correct based on the pullback! Cheers!

    • Tony thanks for the great update. Looks like we could finaly have our answer next week. I assume a break of 1900 would validate blackjacks ending diagnal correct. Also soul surfer on Fiday had a great road map of things to come. I know I’m getting ahead of myself, but if all plays out, shouldn’t int 4 have a large pull back of approx 7-9 percent. Then int 5 to all time highs. thanks again. Have a great weekend everyone. Go California chrome. History could be made today. Last one to win the triple crown was affirm in 1978.

      • blackjak100 says:

        A break of 1868 would almost certainly validate the ED since it eliminates a second wave correction. Tony is looking for a 20-30 pt pullback for minute iv I believe.

        Go California Chrome is right! I have $ on Ride on Curlin for value, but I still want CC to win!

      • tony caldaro says:

        yes agree
        think everyone is rooting for CC

  41. rolandu11 says:

    Dow and SPX with new all-time highs. Dow has also gone well above the long-term logarithmic trend line (So far, an argument of bears). The SPX is also above it but still not so clear. Nevertheless, the bears seem to be rather loud.

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