weekend update


The bull market made news highs this week, after the FOMC meeting, statement, and press conference. For the week the SPX/DOW were +1.3%, the NDX/NAZ were +1.0%, and the DJ World index was +1.0%. On the economic front positive reports continue to outpace negative ones. On the uptick: the NY/Philly FED, industrial production, the NAHB, the CPI, leading indicators, and weekly jobless claims improved. On the downtick: housing starts, building permits, and the WLEI. Next week we get reports on Q1 GDP, Personal income/spending, and the PCE.

LONG TERM: bull market

This bull market continues to unfold. But has recently reached the point where investors feel the Central Banks of the world have their back, and they have nothing to fear. Volatility is at its lowest level since 2007, and risk premiums on sovereign debt are also at similar lows. After a multi-year bull market this is typically the calm before the storm. As bull markets begin their topping pattern, volatility increases and debt risk rises. This is likely to start in the next quarter.


For now Primary III, of this five primary wave bull market, continues to unfold. Primary waves I and II completed in 2011, and Primary III has been underway since then. After a simple Major wave 1 in late 2011, Major wave 3 extended and extended into early 2014. Then after a Major wave 4 decline in February 2014, Major wave 5 began and is still rising. When it concludes Primary III will conclude, and the steepest correction since 2011 will unfold for Primary wave IV. Primary IV will likely coincide with a world event. We currently have both Iraq and the Ukraine to consider.

MEDIUM TERM: uptrend

From the Major wave 4 low in February at SPX 1738, we had an Intermediate wave i uptrend into April and SPX 1897. After that there was a short-lived Intermediate ii correction to SPX 1814 by mid-April. Then the current Intermediate iii uptrend began. We have been counting this uptrend, naturally, with five Minor waves. Minor 1 was simple and ended at SPX 1885. Minor 2 pulled back to SPX 1851 by late-April. Minor wave 3, however, has been subdividing into Minute and Micro waves. Typical of a third wave.


The first four Minute waves were as follows: 1891-1862-1956-1926. Minute wave v made new highs this week as it reached SPX 1964. At this new high the market is displaying negative RSI/MACD divergences on the daily charts in all four major indices. And, both the SPX plus NAZ (which made new bull market highs this week), display a Minor wave 3 that is nearly 1.618 times Minor wave 1. Since we had been expecting Minor wave 3 to top around the 1956 to 1973 pivots, we think it is time to get a bit cautious short term. Medium term support is at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots.


Short term support is at the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Short term momentum ended the week overbought. The short term OEW charts remain positive with the reversal level now SPX 1959.


We have been tracking the Micro waves of this recent rally: Minute wave v. We had a clear 1-2-3 rally, 1941-1931-1960, until Thursday. Then the market pulled back 8 points to SPX 1952. We would have liked to have seen a bit more of a pullback, but decided to take the cautious approach since Minute v has already hit out projected range. As such we can now count five Micro waves: 1941-1931-1960-1952-1964. When this last rally concludes, if it has not done so already, a Minor 4 pullback should drop the market back to the 1929 pivot range. After that a Minor wave 5 rally should take the market to new highs and end the Intermediate wave iii uptrend. Best to your trading!


The Asian markets were mostly lower for a net loss of 0.6%.

The European markets were mostly higher for a net gain of 0.6%.

The Commodity equity sector was mixed for a gain of 0.1%.

The DJ World index is still uptrending and gained 1.0%.


Bonds continued their downtrend and finished flat on the week.

Crude gained 0.1% as it continues to uptrend.

Gold finally confirmed an uptrend and gained 3.1%: Major C should be underway.

The USD is still uptrending but lost 0.3% on the week.


Monday: Existing home sales at 10am. Tuesday: Case-Shiller, the FHFA index, New home sales and Consumer confidence. Wednesday: Q1 GDP (est. -1.8%), and Durable goods orders. Thursday: weekly Jobless claims, Personal income/spending, and PCE prices. Friday: Consumer sentiment. The FED has a clean slate ahead of the upcoming three day weekend. Best to your weekend and week!

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

About tony caldaro

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81 Responses to weekend update

  1. torehund says:

    Yellen, Greece and New lead holding….can it ever become more bullish 🙂

  2. Best Case/Worst Case Intraday S&P Zigzag [CHART] http://wavegenius.com/119

  3. lunker1 says:

    60 minute RSI has worked off the overbought condition and price hasn’t moved that much so still expecting a micro 5 up to 1966 to 69 to set up -D

  4. Deja Vu…it is time now for world to panic,not bcos Ukraine, not bcos Iraq, but bcos “I have gone wrong 4 times in a row”

    SPX at 1968 is line in sand, shud be there tomorrow, will open SHORT at that level, but with STOP LOSS at 2008.

    This time, I will take out remaining hairs of Bald Ben Bernanke. From the time, he has gone,charm is lost. Otherwise, arrogant Ben, simply came with his Chopper and threw billions. America definitely needs FOMC chairman like him.

    As usual, will reason it out, strategy fails/succeeds.

  5. for old times sake I will say with VIX futures trading down the 330 ramp of the market is on schedule brought to you by your central banks

  6. the “We Float’ roadmap for monday and coming week:

  7. cmucha68 says:

    I think if the S&P goes below 1956 today and closes below it really can go down the roughly 30 points to 1929 area as Tony mentioned. Let’s see.

  8. hucky2 says:

    What ever happened to the old saying, “when the VIX is low it’s time to go”?
    Another item on the ignore list!
    Instead lots of people are relying on the ‘Greater Fool theory’.

  9. ocaj2000 says:


    • Looks like a gap up in the morning

      • radrian6 says:

        Yes indeed. In fact, if the expected minor correction does not get started very soon, I would surmise that it does not start until after July 4. Holidays are notoriously bullish — not that traders need another excuse to run prices higher — so I doubt that we will see a correction during the first week of July.

        Also consider that a lot of the big traders are on vacation so the crowd has a higher percentage of amateurs who are less likely to hedge or short.

        Based on the strong futures, I would expect a gap and go on Monday but I suppose that an opening gap could also be faded — we’ll have to wait and see. I am leaning bullish for the next couple of weeks but I am open to a correction if the markets can manage one.

      • soulsurfer says:

        daily R2 at SPX 1967. Daily upper BB at 1969. Weekly R2 at 1969. Seems like good resistance imho, especially combined with the 1956 and 1973 OEW pivots.

      • radrian6 says:

        Soul, I understand your perspective … the SPX does indeed have strong overhead resistance. I could also add that SPX has punched through its weekly upper BB for two of the past three weeks which typically implies a multi-week consolidation/correction.

        Regardless of the resistance, as I write this, SPX is down only 2 points, the NDX is flat, and RUT is off its low and down only 3 points.

        I would really like to see a correction — I believe there are more opportunities in a two-way market versus a one-way market. However, given the intense bullish momentum, the close proximity to Independence Day, and the absence of big-money participation (vacation season), I have my doubts about the downside.

        If we do see SPX drop toward the 1929 pivot, RUT should test the support zone at 1160-54.

  10. Praveen Vishnu Shamain says:

    Dear Mr. Tony,

    For one of the previous questions you have answered that “PRIMARY 4” is expected to start in August 2014.

    My question to you is – when Intermediate 1, 2 & 3 have taken nearly 4 months and intermediate 3 is yet to complete, why do you think intermediate 4 & 5 will take less than a month to complete (July)?

    Thanks in advance.

    With Regards,
    Praveen Shamain

    • tony caldaro says:

      Fifth waves have generally take about one month, as well as, corrections

      • Anonymous says:

        June 1st you stated “When Major 5 concludes it should end Primary wave III. Then a potentially steep, multi-month, correction will follow for Primary IV. Typically, during bull markets, Primary waves II and IV are similar in depth and duration. Primary II took five months to unfold, and the market lost 22% during the decline. We are expecting Primary IV to last about three months with a market loss of 15+%. Then Primary V should take the market to new highs to conclude the bull market. Thus far we are maintaining our bull market target range of SPX 1970 to 2070 by Q3/Q4.” just to make sure are calling for 5% correction now instead of 15% any info will be greatly appreciated.

      • tony caldaro says:

        When Major 5 ends, not this Int. iii uptrend.
        From the Major wave 4 low in February at SPX 1738, we had an Intermediate wave i uptrend into April and SPX 1897. After that there was a short-lived Intermediate ii correction to SPX 1814 by mid-April. Then the current Intermediate iii uptrend began. We have been counting this uptrend, naturally, with five Minor waves. Minor 1 was simple and ended at SPX 1885. Minor 2 pulled back to SPX 1851 by late-April. Minor wave 3, however, has been subdividing into Minute and Micro waves. Typical of a third wave.

  11. torehund says:

    Looking at commodities, coal looks sweet, aure it has been looking sweet for a while. Sure some churn may still revail, but it could strat w 3 from here. Gold and oil could just be the canaries in the coalmine. Let see if China can strat lifting it all, and they may actually benefit indirectly as higher prices on raw materials underpins their elevated real estate market.

  12. cmucha68 says:


    Nadeem Walayat from marketoracle (where I found your comments) said he believes in a pullback for the Dow down to 1600-16200 with a small chance of overextending to 15700 first and than up into autumn for new highs (without mentioning a specific price) and then a sharp sell off but also not mentioning a specific target. That should take the S&P down to around 1875-1880, than up to new highs into autumn. That that interfere with your analysis or practically impossible ? Also;0: the Iraq and Ukraine crisis could get out of control perhaps sooner than later although it is no guarantee for a market decline as we see now.

    Nice Sunday !

    • tony caldaro says:

      If the DOW drops down to those levels, from here, it will be part of a downtrend.
      DOW 15,700 looks highly improbable, but 16,300 does not.
      Nadeems’ timing is a bit different than ours, but that is the general upcoming scenario.

  13. cmucha68 says:

    Hi Tony,

    I am Christian from Hamburg, Germany. I am following your comments for a few weeks only but I am very impressed with your accuracy and prognosis. I would also like to thank you for work and giving your opinion to the trader “family”. In fact all traders are like brothers and sisters. We have all one aim in common: to survive the ups and downs and to make some money as good as possible. I must admit that I am not a wave counter and only through you got interest in that field.

    Now my question: What makes it “sure” that the pullback will stop at are around 1929 and does not break that level down to the main support of 1900 ? Second: I see some basic support at 1940 area, down to 1937. Could the pullback end there or, according to Elliot it must be 1929 area ?

    If we do not get a pullback now and the market moves further to 1973 is that the end of minute 5 or can it still break higher to 1980-2000 ? What I mean is: is the market so overextended that a pullback must take place before reaching the 2000 level ?

    Many thanks and please continue with your excellent work.



    • tony caldaro says:

      Hi Christian,
      There is no certainty for the level of the expected Minor 4 decline, or even if it has begun.
      We are assuming that it will be about 30 pts., since all the important pullbacks during this uptrend have been around 30 pts.
      The market is not extremely over-extended. The daily RSI could keep rising as the market rises. So again no guarantees, just probabilities.

  14. soulsurfer says:

    Thanks for the update Tony! Got really nothing to add this time. It’s all tracking so beautifully. What more can we want!?

    Question, seems like either Ukraine or Iraq conflicts may start inflation on energy prices (Nat gas, oil, respectively). Would fit with upcoming expectation of hyper inflation, or too soon?

  15. perceval7 says:

    Hi Tony, Is it possible to count the Minute wave iii as a Micro a,b,c with us currently at the top of the b? And a 1000 thank you’s for everything you give to us!!!

  16. Thanks to Tony and his OEW group for the clear and deep weekend analysis which he generously provides to blog readers gratis. I suspect that there is nothing of this caliber available on the Web even if you pay for it.

    Is there any condition which would lead Tony to believe that we are still in micro 3 of minute 5 of minor 3 rather than in micro 5?

  17. Joel Wenger says:

    Reblogged this on The Safe Investing Blog and commented:
    Market Outlook for the Week of June 23rd = Uptrend Intact, but moves south for support

    Short-term (20 DMA):
    The indexes remain above their 20-day moving averages, and per IBD, we’re still in a confirmed uptrend. Volatility was to the upside, due to favorable reaction to the FOMC. After hitting new highs, looks for some consolidation in the coming week.

    Intermediate (50 DMA):
    Market averages remain above their 50-day moving averages, and Elliott wave continues to indicate an uptrend.

    Long-term (200 DMA):
    Market averages are far extended from their 200 day moving averages, and the long term Elliot Wave uptrend remains intact.

    Elliott Wave Analysis from Elliott Wave Update by Tony Caldaro

  18. Thanks Tony,
    What time frame are you looking for Pri IV to begin? July/August? Again, thanks for all you do.

  19. valunvstr says:

    I bought more GDXJ too. GDX didn’t even touch the gap. GDXJ did not full the gap but filled a good amount of it. My only concern is that I bought more GDXJ as you bought more GDX. GDX looks like a true breakaway gap but GDXJ filled part of the gap on huge volume. I don’t see how GDX can run without GDXJ but am curious of the partial gap fill of GDXJ is of concern??

    • V, I don’t own GDXJ — only GDX. I’m expecting GDX to have one or two gaps before it ends (not all at the same time). Usually, one gap up is followed by one or two more later. So far I would say, don’t be concerned about GDXJ. as MACD is straight up, stochastics above 80, TSI rising. All lookin’ good! Good luck!

  20. gtoptions says:

    Thanks again Tony for sharing your knowledge.

    “He who obtains has little. He who scatters has much.”
 – Lao Tzu –

  21. Anonymous says:

    as always many thanks for your insight if I understand correctly there will be minor S&P pullback to 1929-1930 then a push higher to 2070 range? from there 11% drop. any clarification regarding S&P targets will be greatly appreciated.

  22. RDC says:

    Thanks Tony. Excellent update.

  23. Rais Sone says:

    Hi Tony,
    2 questions:
    1. In the 3rd chart, how do you rate the probability of wave 1 ending at 1891 instead of 1884, and hence we are now in 5 rather than v of 3?
    2. I see some elliotticians still counting 2009 low 666 as C of an irregular and the move since then as B of another larger cycle-degree irregular. Your long-term count seems a better fit. Any thoughts on the former or the possibility of a large triangle multi-year triangle since 2000 (1553 to 666 is A, 666 to wherever the current cycle peaks is B)?

    • tony caldaro says:

      Hi Rais,
      1. Had not considered that because of the choppy beginning between 1814 and 1844.
      2. We had five clear waves up during 2002-2007, and now impulsing since 2009.
      Have never seen this kind of activity in B waves of any degree.

  24. a7c5g8 says:

    Do you have an upside target for gold Major C?

  25. Chung Wang says:

    Tony, thanks for the “always delivered” daily and weekend report!! You are the best!!
    Assume Int. iii finish around 1973 pivots, what is the target of Int. iv?
    Thank you!

  26. Thanks, Tony, for the enjoyable morning read! 🙂 May you have an enjoyable weekend — and to the great bloggers here, too!

  27. llerias7 says:

    “end the Intermediate wave iii uptrend”. Should not be …”end the P III uptrend”?

  28. alexhartley1 says:

    Thanks Tony. Great wave calling. Has helped me a lot.

  29. Libor Val says:

    Thanks for the update Tony, wont PIV coincide with QE ending rather than war. I see no war.

  30. rolandu11 says:

    Again new all time highs. But this time gives the optimistic sentiment warning signals. At least, caution is needed now.

  31. great reading even for the eu morning coffee readers….kudos!

    • cmucha68 says:

      I think if the S&P goes below 1956 today and closes below it really can go down the roughly 30 points to 1929 area as Tony mentioned. Let’s see.

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