weekend update


The market opened the week on a gap down, one of several, as it started to correct from last week’s SPX 1986 all time high. After hitting SPX 1953 on Thursday the market tried to rebound into Friday’s close. For the week the SPX/DOW were -0.80%, the NDX/NAZ were -1.05%, and the DJ World index was down 1.55%. Economic reports were sparse on this first full trading week of the quarter. On the uptick: consumer credit, wholesale inventories, the WLEI, a Treasury surplus, and weekly jobless claims improved. On the downtick: the monetary base. Next week we have the FED’s beige book, Industrial production and reports on Housing, to name a few, within a busy week.

LONG TERM: bull market

The bull market went on pause this week as Portugal’s largest bank ran into problems, and fears of another European banking crisis arose. If you recall, the steep corrections of 2010 (17%) and 2011 (22%) were both European related. For the past three years Europe’s markets have been rising while their various problems have appeared under control. The charts, however, are suggesting this is just the beginning of a new set of problems as noted in this recent report: https://caldaro.wordpress.com/2014/06/16/europe-potential-market-turbulance-ahead-by-mid-late-2014/. In fact, England and France have already given back nearly all of their gains for 2014. Plus, all eight European indices we track are in downtrends.



The US market, however, has not yet reached its somewhat treacherous threshold. Primary wave III, of this five Primary wave bull market, continues to unfold generally as expected. Yet, as noted by the weekly chart below, Primary wave III appears to be nearing an end. It is just a downtrend and uptrend away from its conclusion. A Primary IV correction, similar to Primary II’s correction, could unfold with the catalyst again centered in Europe. For now, the SPX still needs to confirm an Intermediate wave iv downtrend, then an uptrend to new highs to complete Intermediate v, Major 5 and Primary III.


MEDIUM TERM: uptrend probably topped

The mid-April Intermediate wave iii uptrend from SPX 1814 probably topped recently at 1986. The uptrend appears to have completed five Minor waves, with the fifth wave nearly a perfect 0.618 relationship to the first. Adding to this probability is the fact that all eight of Europe’s indices are in confirmed downtrends, and there are negative divergences, in the US, on the daily and weekly RSI/MACD.


With a weak Minor wave 5 downtrend support is unlikely to be found at Minor 4 (1945), or even Minute iv of Minor 3 (1926). Fibonacci relationships suggests two potential levels: 1920 (38.2%) and 1900 (50.0%). Since 1920 is outside of the 1929 pivot range, but 1900 is within the 1901 pivot range, we will carry all three as support. We are not expecting a long drawn out correction, and are looking for a low this month. Thus far, the market is acting somewhat like the Major wave 4 correction in January: remaining relatively close to the highs during the first week of the correction. Oddly enough, that was the last time all European indices were in confirmed downtrends too. Medium term support remains 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 pivot and SPX 1986. Short term momentum ended the week overbought. The short term OEW charts flip-flopped all week, which is generally a sign of a correction, and ended with the reversal level at SPX 1965.


Thus far we are counting this potential downtrend with three Minor waves. Minor wave A appears to have completed with an a-b-c down (1959-1974-1953). Minor wave B looks to be doing an a-b-c up (1970-1960-1969 so far). Resistance should remain at the 1973 pivot range, and support at the 1956 pivot range until it breaks. Best to your trading!


The Asian markets were mostly lower for a net loss of 0.5%.

The European markets were all lower for a net loss of 3.9%.

The Commodity equity group were mixed for net gain of 0.1%.

The DJ World index lost 1.5% on the week.


Bond yields are very close to confirming a downtrend, Bonds gained 0.9% on the week.

Crude is in a downtrend and lost 3.1% on the week.

Gold continues to uptrend gaining 1.3% on the week.

The USD is still barely in an uptrend but lost 0.1% on the week.


Tuesday: Retail sales, the NY FED, Export/Import prices and Business inventories. Wednesday: the PPI, Industrial production, NAHB housing and the FED’s beige book. Thursday: weekly Jobless claims, Housing starts, Building permits, and the Philly FED. Friday: Consumer sentiment, Leading indicators and Options expiration. FED chair Yellen gives her semi-annual report to the Senate on Tuesday, and House on Wednesday. Also on Tuesday FED general counsel Alvarez testifies in Congress. It looks to be quite an interesting week. Best to your weekend and week!

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

About tony caldaro

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122 Responses to weekend update

  1. Tony

    Just a comment based on your DAX chart. Am I right about reading it being done with “Primary III” and the large correction and downtrend has started ?

    If true – what is timeframe on it , still 4th Quarter or is it going into 2015 you think ?

    Thank you

  2. Tony

    I think the minute B ended today at 1980 , we might expect a wave c down next if I’m right ? Correct about that ?

    Thank you namaste !

  3. soulsurfer says:

    IF 1953 was the minor 4 low (it is still only 3 waves up though), then
    a) the 1970 high was most likely minute i (of minor 5),
    b) the 1960 low was then minute ii, and;
    c) SPX is now in minute iii.

    Assuming a textbook 1.764-2.000x extension target for minute v (of minor 5), we can then calculate it to hit likely hit 1960+17x (1.764 to 2.000) = 1960 + (30 to 34) = 1990 to 1994.

  4. torehund says:

    Softs are firming up…

  5. H D says:

    Since April the hits have just been simple 3 wave moves, twice HH’s have been B waves and now so we are looking for something different with a big C down on DOW new ATH’s. Elliot Wave getting a little tricky. The wave from 1953 has not been choppy IMHO.
    SPX range 1969.86-1979.85 BOT’s r still dumb.

  6. Caldaro you mentioned primary 3 is just a downtrend and an uptrend away from completing? I am assuming we still need that downtrend to 1929 ish?

  7. soulsurfer says:

    hmmm, waaay overbought on the hourly and it can’t seem to clear the 1973 OEW pivot. Together with that ED on the INDU somehow I don’t trust this rally…

  8. soulsurfer says:

    Well, the daily-AI got it -again- right on Friday with that buy signal, but just look at that rising wedge/ending diagonal on the INDU. Loud and clear… no denying, and it will resolve to the downside fast and furious, make no mistake.


    • gokalg says:

      Soul Looks that way but these ending diagonals an keep on extending. This being OPEX week, IMO we are going to get new highs including in SPX

      • soulsurfer says:

        yes they can, but upside potential is limited compared to the downside risk… and for me it’s much about a good risk:reward ratio.

  9. GDX not playing nice…. don’t lose money. Out at 26.79. They’re still playing the range it is in — needs to get through this resistance above 27.50.

  10. gtoptions says:

    Thanks Tony
    SPY/SPX ~ with the Weekly RSI/5 > 70 I see HH’s ahead.
    SPY ~ AB=CD Target @ 199+

  11. jeffbalin says:

    I still have the position that Int 3 isn’t finished and we are inside some sort of microscopic 3 towards the end of minute 5. However, this certainly could be an overexcited B like we saw in mid May.

  12. llerias7 says:

    Today sounds like a (c) wave of B (Int.IV)…a final leg up before a C wave down to 1929 OEW…

  13. Hi Tony,
    It seems like nobody is bothered by what’s going on in the Middle East. It is quite a volatile situation. It seems that the complacency of the market is thick. A downturn at this point would not surprise me. JMHO

  14. We are sure getting close to IH&S target …. now, higher? … or will the H&S developing actually happen. As most of you know, H&S formations have pretty much all failed in this bull market.

  15. manunidhi21 says:

    Namaste Tony!
    As a rule can “b” cross 1986(Int iii) ?
    It may be minor v still ..whats the nxt R ?

  16. S&P DOW NASDAQ Forecast – MASSIVE rally setting up after quick deep W2 zigzags – http://wavegenius.com/sp-500-dow-jones-industrial-nasdaq-forecast-for-july-14-2014/

  17. strong up trend
    .8 retracement of june-july rally/ simple abc; c=1.25extension(a)
    17 point upthust, then .6 correction into a ihs
    now gapping above neckline
    so far textbook bullish

  18. rc1269 says:


    the opening paragraph certainly does help remind us who/what was the true driver of this bull marke:

    “About $100 billion has been added to equity mutual funds and exchange-traded funds in the past year, 10 times more than the previous 12 months…”

    the Fed puts into the market in a couple months an amt it takes the entire retail investor base to do in a year. and that’s at a tapered rate

  19. rc1269 says:

    C crushed it
    doesn’t feel like we’re ready yet. back in the pool

    • JK1987 says:

      rc, You meant C wave of “b” up to 1973 pivot, or Citi up, or the same thing of both C wave crush up?
      Your forecast of GER 2 – ARG 1 is the closest to the result.
      My 1-0 forecast is the perfect score, only on the opposite side.

    • rc1269 says:

      sorry just meant C earnings. just another excuse to keep the music going a little while longer

  20. bobhopium says:

    Thanks Tony and greetings to all who provide witty banter and expert opinion on this blog.
    Below is for my own trading purposes and maybe of interest to others. I am seeing bullish setups and bear entrapment structures in place on many international bourses and i would expect to see decent upside action for global equity over the next 2 weeks.
    Currently positioned long :- Dax, Ftse, Dow, Nikkei, Hang Seng, Usd/Jpy and Msci Singapore free index. Aimho and good health and good fortune to all.

  21. I’ll be taking profits in my short crude position tomorrow morning for a 6% move from June highs, the market looks oversold.

  22. soulsurfer says:

    thanks for an great weekend update tony, how awesome it is to get a good idea where europe is heading. fantastic

    got a buy signal on the daily-AI of Friday, but the weekly-AI gave a (slight) sell-signal. Not sure what to make of this. Seeing the bollinger bands contracting on the daily too: larger move coming…. either v or c-wave of iv….


    ps: kinda starting to look forward to Primary IV. Be fun to be short for a change.

  23. mike7x says:

    Thanks Tony! Maybe this weekend’s Super Moon confirmed the downtrend.

  24. RDC says:

    Tony, Thanks for Great Weekend Update.

  25. cmucha68 says:

    Deutschland, Deutschland, über alles, über alles in der Welt !

  26. blackjak100 says:

    In considering all possibilities, Nate has posted a count where int iv is a triangle and we could be looking at int v/P3 to top at the 2019 pivot rather soon as thrusts out of triangles are usually sharp and brief. It’s a tough call and there’s certainly should be some volatility this week.

    • cmucha68 says:

      The old high should challenged first. And when it’s exceeding above all bets are off of course.

    • drwarmington says:

      Well, we need a d and e to finish this off. Looks like d could reach up to 74 to 78. Any thought on this?

    • chrisk44342 says:

      Extremely unlikely, no offense to Nate. Wave B generally does not exceed 1.382 of A in any correction. A more likely alternate IMO would be an ED for int v

      • blackjak100 says:

        I’m not sure what your obsession with B waves is. There is no rule to the length of the B wave. Yes, the common length is 105%-138% of the A wave. Yes, the probability reduces once it gets beyond 138%. However, there are a lot of B waves that are longer than 138% throughout the years.

        I’m not saying this count is correct and actually think it’s probability is less than 50% due to the shallowness of int iv. I would like to have seen the triangle bigger for an int wave. If we exceed 1973 tomorrow and hit 1978-1979 before reversing, then this count could gain traction.

      • drwarmington says:

        So far, right on target BJ. Think we will see 63 to 64 later today.

  27. And on DAX , if its a correction , how low do you see it going in Primary IV?

  28. Hi Tony

    Nice analysis.

    Just a question about France CAC, FTSE UK and DAX. Do you think France topped out (bull market top with UK) and DAX is just a correction coming ? Or am I wrong about these mkts reading your chart ?

  29. torehund says:

    Will the US follow Norway ? Whats needed is some inflation

    • torehund says:

      The peak here would be the peak of Cycle wave 1 in housing. If it happens media will be running aound screaming of hyperinflation.
      But the fact is that the Chiese and Indians may emerge out of powerty and start consuming more goods, which floors the price of commodities.

    • torehund says:

      So US may be on the large C (from 1920 bottom), or a very long and steep 5th wave inflating prices a couple of hundred percent, if Norways bubble prices is any guide.

  30. tommyboys says:

    Tony any thoughts on the RUT? Whlle the Dow and SP have rallied this year without a major pullback the RUT has had a 10% pullback with many of the micros down 30-50%…? Tia

  31. Libor Val says:

    HI Tony, is it possible we are now in minor iv of int iii with minor v ahead?

  32. M1 says:

    Thx, Tony
    good to have your road map.

  33. Target for $SPX IH&S (see chart below). A friend asked me, so thought I would post. NOTE: IH&S pattern is not actually “confirmed” until price crosses the dotted-blue neckline.

  34. bouraq says:

    Weekend charts: $SPX $DJIA $FTSE $RUT $DAX $OIL

  35. Shreveport says:

    ” We have had 6 declines since the 4/11/14L that have ALL been between 30-40 SP in 2-4 TD.
    1. 4/22H – 4/28L = 34.28 SP in 4 TD
    2. 5/02H – 5/07L = 31.54 SP in 3 TD
    3. 5/13H – 5/15L = 39.81 SP in 2 TD
    4. 6/09H – 6/12L = 29.77 SP in 3 TD
    5. 6/24H – 6/26L = 23.48 SP in 2 TD
    6. 7/03H –7/10L = 32.73 SP in 4 TD”

    It would be a Change in Trend, if we declined more than 4 TD and more than 40 SP’s.”

    jedimasterstudent says:
    July 12, 2014 at 7:20 am

    Thanks, Tony! I’m sure we all see the IH&S on your SPX 60-min chart — with MACD and RSI confirming…

  36. Thanks Tony!

    Seems likely that europe is the bad guy here.
    I have question, that we perhaps have adressed to you before:

    If minor wave “a” have 3 subwaves, traditional EW would exclude the wave from being a zig-zag. This would instead mean the beginning of a flat wave, and suggest an upthrust to 1986 in SPX for now.
    What is your opinion on this?

    All the best, Sverker

  37. elmer510 says:

    Thank you for the weekly update, Tony.
    Always an inspiration to read.

    Do you still expect Prim 4 to begin in August ?

  38. Joel Wenger says:

    Reblogged this on The Safe Investing Blog and commented:
    Market Outlook for the Week of July 14th = Minor Correction in Process

    Short-term (20 DMA):
    Almost all the indexes ended the week above their 20-day moving averages (except for the Russell 2000). Per IBD, the general market uptrend is under selling pressure.

    Intermediate (50 DMA):
    Market averages remain above their 50-day moving averages, but Elliot Wave indicates that the recent uptrend is probably over, leaving one more run at new highs before a major correction.

    Long-term (200 DMA):
    Market averages remain extended from their 200 day moving averages, and the bull market continues per Elliot Wave.

    Elliott Wave Analysis from Elliott Wave Update by Tony Caldaro

  39. Outstanding Weekend Analysis! Key point, United States of America, still for the most part is favored nation among all other nations. Economies for the most part are still mystery, Mr. Albert Einstein recommended too always stay within the mystery. Most of the U.S.A. Indexes reached their 21 trading week cycles, thus, its very logical with Europe correction, Americas markets are pausing. ” In God We Trust” vs Europe socialism system.

    I closed all of my long positions, Apple Inc. Pixelworks, Inc. 100% Cash.

  40. sunset2014 says:


    Thank you for another great weekend report. I have two questions id appreciate your thoughts on:

    1) If my understanding is correct, Primary 4 for DAX cannot have a low below the top of Primary 1 which is 7600?

    2) On US indices 4th waves have been week. Does this imply that Primary 4 on SPX and DOW are likely to be considerably weaker that the past two corrections?

    Many Thanks

    • tony caldaro says:

      1. correct
      2. possibly, if we have a small Pri IV this bull market is nearly over

      • 56rambler says:

        Hi Tony,

        Thanks for your weekend update – always one of the first things I read. Wanted to ask you about this response to a comment … “if we have a small Pri IV this bull market is nearly over” – I don’t follow your logic – could you help me understand this? Wouldn’t there still be a Pri V wave before the end of the bull market? Do you expect Pri V to be higher than Pri III? Thank you!

      • tony caldaro says:

        PRI V will take the US market to new highs.
        How long it lasts depends on PRI IV.

  41. mharrison60 says:

    A great read. Thanks!

    With Europe topped, the final Int V in US market could truncate (although I think the market has forgotten how to) but for now the assumption is a new S&P high after Int IV. FTSE seems a more straightforward play.

    Have a great weekend

  42. alexh110 says:

    Tony, notice you have marked a confirmed Primary C top on the FTSE: shouldn’t this be labelled as a Cycle Wave B top?
    Are you very confident now that the FTSE has ended it’s bull market from the 2009 low?

  43. Thanks, Tony! I’m sure we all see the IH&S on your SPX 60-min chart — with MACD and RSI confirming. Enjoy your well-deserved weekend. Appreciate all you do — truly. 🙂 Your commentaries all week/weekend long are much looked forward to.

    • drwarmington says:

      Identical to June 23rd

    • zvyezda says:

      Jedi, are you waiting for after c of B exhausts itself in the SPX and C begins for the SPX for GDX & GLD to break out to the upside or can they move independently and not primarily inversely at this point?
      Thanks very much for your contributions to Tony’s already excellent blog!

    • valunvstr says:

      I remember you saying you sold you GDX a few days ago…I’m a big fan of yours but you left that short term mistake out of your comments below. GDX and GDXJ moving much much higher Given the formation of the miners and gold I am confused as to how Europe is going to create a problem and send the Dollar higher yet. It is hard to see the dollar up because of Europe and a sustained move for GLD and GDX(J). I wonder if everyone is going to get caught on the wrong side of the $ trade thinking it is the obvious trade if Europe is in trouble again. When it is obvious to everyone, it is usually the wrong trade. And it seems EVERYONE is bullish the US$.

  44. 16golfer says:

    Thank you so much for the update Tony! Agree, correction will come from problems in Europe. Add in Iraq, Ukraine, Israel, and mid-term election, it could be quite a ride.

  45. rolandu11 says:

    On Monday in the first trading hours, there was an extremely high Eq. call / put volume ratio on the ISE. Obviously, too many bulls were out. Thus it was necessary to schedule a consolidation. Let’s see how it goes on opex.

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