weekend update


Exciting week? Not quite. The market started the week at SPX 1978, dropped 12 points below that on Monday, rallied to 13 points above that by Thursday, then ended the week where it started: SPX 1978. For the week the SPX/DOW were -0.4%, the NDX/NAZ were +0.5%, and the DJ World index was +0.3%. Economic reports came in mostly positive. On the uptick: the CPI, the FHFA, existing homes sales, durable goods orders, the monetary base, and weekly jobless claims hit an eight year low. On the downtick: new home sales. Next week is FOMC week with a plethora of economic reports. Q2 GDP, monthly Payrolls and PCE prices to note a few. Should be a wild week.

LONG TERM: bull market

We continue to count this bull market as Cycle wave [1] of Super cycle 3. Both the Cycle wave and Super cycle wave began at the March 2009 low of SPX 667. Cycle wave bull markets unfold in five Primary waves. An historical reference can be found in the DOW between 1932 and 1937. In this Cycle [1] Primary waves I and II completed in 2011. Primary wave III has been underway since then, but should be nearing conclusion in the next few months. Primary I had a subdividing Major wave 1 and simple Major waves 3 and 5. Primary III has done just the opposite: a simple Major wave 1 and subdividing Major waves 3 and 5. Major waves 1 and 2, of Primary III, completed in late 2011. Major waves 3 and 4 completed in early 2014. Major wave 5 has been underway since the February low at SPX 1738.


This year Major wave 5 has been subdividing into five Intermediate waves. Intermediate wave i completed at SPX 1884 (1897) in March, and Intermediate ii at SPX 1814 in April. Intermediate wave iii has been underway since that low. Once it concludes we should see an Intermediate wave iv downtrend/correction, then an Intermediate wave v uptrend to new highs. When this last wave concludes the market should experience its largest correction since 2011, as Primary III ends and Primary IV gets underway. After that the market should make new highs again in a Primary wave V.

MEDIUM TERM: uptrend

This Intermediate wave iii uptrend was difficult to track when it got going in April, and difficult to track as it nears its end. In the middle it just trended and was quite easy to follow. We had been counting the early July high at SPX 1986 as the end of the uptrend and Intermediate wave iii. While the market did go sideways to lower for about two weeks after that high it did not break down into a confirmed downtrend. It only pulled back. When the SPX hit 1986 again, recently, we assumed the uptrend was resuming and adjusted the labeling accordingly. The market did make marginal new highs, as did the DOW and NDX, but the NAZ only matched its uptrend high. The wave pattern since the SPX 1986 high, however, has been quite choppy in both directions. Despite the new highs. After Friday’s larger then desired pullback the market as created a couple potential scenarios from that SPX 1986 high.


One. Minor wave 5 remains underway as labeled, but it is now starting to subdivide. Minute waves i and ii, SPX 1980 and 1966, then Micro waves 1 and 2, SPX 1991 and 1974 so far. This would suggest this uptrend will go much above SPX 2000. Possibly to the 2019 pivot and beyond.

Two. Minor wave 4 ended at SPX 1953, right after the 1986 high, and all the activity since then has been an unfolding diagonal triangle Minor wave 5. This scenario we have posted on the hourly chart in the short term section below. One of the reasons this particular scenario takes precedence over a few others is the unusual number of opening gaps this month. During June there were only three gap openings as the market was trending higher. During July there have been 13 gap openings in only 19 trading days. The first two took the market to the SPX 1986 high, from 1960 in just three days. The last 11, over the next 15 trading days, has kept the market in a 38 point trading range: 1953-1991. This type of activity is more indicative of the choppy action in a triangle than an impulse wave. We’ll keep both scenarios in mind as the market heads into next week. Medium term support remains at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots.


Short term support is at the 1973 and 1956 pivots, with resistance at SPX 1986 and SPX 2000. Short term momentum ended the week just above oversold. The short term OEW charts ended the week negative with the reversal level now at SPX 1982.


As noted above this uptrend was quite tricky when it first started, trended, and now is again tricky as it nears its end. Minor wave 5 can continue to move higher, and subdivide, with the next resistance levels at SPX 2000 and the OEW 2019 pivot. Or it could terminate soon with the diagonal triangle Minor wave 5 currently being presented. Should this scenario unfold the likely uptrend high is but a few points above the recent SPX 1991 high. In fact, from a Minor 4 low at SPX 1953, Minor 5 will equal 0.618 Minor 1 at SPX 1997. A few points shy of SPX 2000. We should be able to determine which scenario is underway during the first few days of next week.


The Asian markets were mostly higher for a net gain of 1.6% on the week.

The European markets were also mostly higher for a net gain of 1.4% on the week.

The Commodity equity group were mixed but gained 0.1% on the week.

The DJ World index continues to uptrend and gained 0.3% on the week.


Bonds continue to uptrend but finished flat on the week.

Crude is trying to uptrend again and gained 0.4% on the week.

Gold is uptrending but lost 0.6% on the week.

The USD remains in an uptrend, and gained 0.7% on the week.


Monday: Pending homes sales at 10am. Tuesday: Case-Shiller and Consumer confidence. Wednesday: Q2 GDP (est. +3.4%), the ADP, and the FOMC statement. Thursday: weekly Jobless claims, and the Chicago PMI. Friday: monthly Payrolls (est. 235k), the Unemployment rate, Personal income/spending, PCE prices, Consumer sentiment, ISM manufacturing, Construction spending, and monthly Auto sales. Best to your weekend and week!

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

About tony caldaro

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109 Responses to weekend update

  1. Ryan Parker says:

    Tony, have you heard of this trader named Mark Cook? He’s expecting a greater than 20% decline in the market sometime in the next 12 months. Wouldn’t surprise me too much.

  2. Tony, is it possible for SPX Minor 4 to have bottom at 1956 (this is where you have labeled wave b of wedge) in lieu of at 1953? The reason I ask is because ES actually made a lower low on July 17th (1942.5) vs July 10th (1945.25), which leads me to believe that SPX Minor 4 bottom on July 17th (1956) as well.

  3. Wave 5 was over rather quickly early in the session (10.12am New York time). Certainly the shortest of the 3 descending waves in terms of time by a long chalk. That makes my count a of C of Minor 4 concluded. Switching to long for b of C of Minor 4. I have Wave 1 (99 DOW points), Wave 3 (158 DOW points) and Wave 5 (DOW 101 points). As you can see its a textbook decline where Wave 1 = Wave 5 and where Wave 3 = Wave 1 x 1.6 and also where Wave 3 = Wave 5 x 1.6. Total decline measures 254 DOW points. A 38.2% fib retracement measures 97 DOW points to 16971 and a 61.8% retracement measures 157 DOW points to 17031. The rally will ascend in 5 waves up, 3 waves down and 5 waves back up to conclude b of C of Minor 4.

  4. went long ES @ 1964 with Stop at 1959….let’s see what comes of it

  5. blackjak100 says:

    Clear 5 waves down IMO and still no +div – ED dead. Still think 1973 pivot holds the decline, but it could also hold the upcoming retrace before iii/c.

    • manunidhi21 says:

      Thanks BJ..yesterday update was very nice and clear about Ed..
      As per your count we are in Int iv… can you plz suggest how are you counting iii/c ?

      • blackjak100 says:

        Yes, minor 4 triangle that ended at 1956 followed by 5 wave impulse to 1991 (minor 5). The 1956-1991 can be counted as a 3 or 5. Here it must be a 5.

  6. Elliott Wave Pre-Market Update Top 5 Big Tech – $PCLN $GOOGL $CSCO $INTC $AAPL – 3rd wave setups galore http://stks.co/g0rcN
    Positions Update July 28: $YY $AAPL $TQQQ $NUGT – All forming or middle of W3 http://stks.co/q0aXQ
    Elliott Wave Forecast July 28 – $SPX $COMPQ $DJIA – Expecting 5 down and big .618 reversal today http://stks.co/h0rXt
    Elliott Wave Forecast July 28 – $ES_F $GC_F $DAX $NKY $FTSE – 5 perfect waves down S&P E-Mini http://stks.co/c0oUC

  7. rc1269 says:

    Morning Tony. you may have commented recently and I missed it, but what’s your view on the Shangai right now? Bloomberg headline this morning that “China enters bull market”. curious if you concur
    cheers and happy Monday!

  8. cj32 says:

    Under your triangle scenario, wave c is longer than wave a, is it allowed under converging triangle rules? thanks

  9. The “week of quotes or the to be or not to be” roadmap for the coming week, 2014/07/28, featuring standard_and_ poor: http://wp.me/p1OxIE-r4

  10. Ok, I want to make sure I’m on the right track. Looking at my chart, we are in “Intermediate Wave 3” trying to figure where the top is. Assuming 1991 (I know that’s supposedly just a wave 3 top subdivision of the Intermediate wave 3), using a standard Fibonacci retracement, the levels are as follows:

    Basically between 1900 and 1930. That then should set up a low sometime between late Aug and Sep/Oct depending on how it moves. Then that sets up an intermediate wave 5 to new highs in the 2000s that is the “big” top (not ‘the’) setting up the large Primary wave 4 down to these levels next year…


    So in 2015 after Primary wave 5 concludes in the 2000s, assuming around 2040 (I just assumed, no science with that number) you get 2015 wave 4 targets of 1675 to as low as a ’15’ handle.

    Just making sure I’m on the same page….

  11. blackjak100 says:

    Tony, I want to correct my prior post regarding your ED although it doesn’t change my belief we are not seeing an ED. Wave ii/b retraced 84%, a little more than the max common length. Wave iv/d needs to reach 1967 to reach 66% which is the min common length. 2 problems stick out… 1956-1991 counts best as a 5 IMO and if we are to reach 1967, that too will count better as a 5. I know I believed in the ED this spring and was wrong, but I understand my mistake now. Neither waves b or d came close to retracing the common length.

    In the end I know you don’t worry too much about form, but I believe int iv may have begun. Getting a lower low in the AM tomorrow will help initially confirm.

  12. hucky2 says:

    Jack Steiman – https://www.swingtradeonline.com/sitehistory/jackswrap.php?url=
    Said – “The market, for its long term of health, needs a correction, and it needs it now.”
    & “Do not get bearish until those 50’s (Moving Averages) are in the rear view mirror after a back test.”

  13. pcskier says:

    Tony what index are you using to measure Europe and Asia. In Europe the $dax was down .7% for the week creating a series of lower highs from the it’s top. The $cac was down .1% and the $ftse was up.6% for the week. For the month $dax and $cac are down 2%, Ftse is up .7%. Thanks for the indexes that you use to track the other continents.

    • tony caldaro says:


      hong kong

      • sunset2014 says:

        Hi Tony,

        If I understand correctly the FTSE has just completed a bear market rally Primary C as it hasn’t taken out the 1999 high. Have the major waves from 2009 also sub divide into 3 waves instead of the 5 wave impulsive structure? Apologies if i’ve misunderstood the structure of major waves.


      • sunset2014 says:

        Apologies Tony. I’ve checked the labels on Stockcharts and see how they sub divide. I have my answer🙂

        Will certainly be something while US goes onto P5 while FTSE continues lower to 2009 lows.

  14. manunidhi21 says:

    Namaste Tony !

    “””We will see the same movement of capital into the USA with rising rates and the real confusion will be rising share prices that will cause the talking heads to begin to talk to themselves””””

    Is it practically possible ?

    • tony caldaro says:

      talking heads talking to themselves?
      happens every day =)

      • manunidhi21 says:


        My question was “We will see the same movement of capital into the USA with rising rates”
        Practically not possible unless a bubble..

      • torehund says:

        Tony and all, the intensity of depressive News, Neurotc depressive sentiment is just so overwhelmingly pervasive these days it feels like a global wave 2 bottom after the short boom into 2010/2011. This has got to be some sort of Climax.

    • torehund says:

      There is already a bubble in some Stocks, but some are still historically cheap. Remember this Q earnings are based on a neg GDP uqarter AND bad weather🙂
      Sure there hasnt been any Growth in official numbers and the misery started in 2010/2011 after wave 1 up. Culination With low Growth starting in Oct 2013. Hope its a back Mirror view.

  15. blackjak100 says:

    Thx tony! I noticed one of the options not discussed is int iii ended at 1991. The ED does not have a typical look since wave ii/b did not even come close to retracing at least .66 of wave i/a. This is the min guideline for an ED but not a requirement. Let’s keep it simple, if we see a lower low mon AM, I believe there is a clear 5 waves down eliminating the ED and increasing the probability of int iv underway.

    The lower low mon AM, if we get it, should hold 1973 pivot. Wave ii to reach 1986???

  16. Marketupsanddowns (Scotty),

    I second cmparis’ question of 1:49 pm yesterday: what do YOU think the market will do next week & over the next month???

    You’d have much more credibility if you could demonstrate – with real-time predictions, not after-the-fact statements – that your method is superior to Tony’s, as you frequently claim.

    Although Tony/OEW didn’t foresee that drop, he did say days before-the-fact that the selloff would not break the 1869 pivot range (1862-1876) and, voila, it reversed at 1862 for a very profitable rally (I posted here in real-time that I turned bullish at 1865 and practically begged that others do likewise).

    I think Tony would be the first to say that there is no crystal ball, but OEW has been very beneficial if used properly.

    I hope you’ll start posting actual, before-the-fact predictions, everything else is just talk and doesn’t help anyone make money.

    Thanks, Tony, for all you do and for providing such an outstanding forum here!

    • Scotty, hope that didn’t sound harsh, rarher, just encouraging you to demonstrate your claims and go out on a limb every once in a while like Tony and so many other posters here do continually, and help other people in the process. After all, helping others is what it’s all about.

  17. There is very high probability that market will make a sizable pullback now, and that we will not see new highs for some time (months ?).

    Breadth is abysmal both on NYSE and NASDAQ, RUT and INDU diverging against new highs in NDX and SPX. Not to speak about Europe, where every single index is falling for some time, diverging even harder against NDX and SPX, they are on the brink of serious structural damage from a technical point of view. A short position has a very, very high probability to work here.

    Furthermore, USD is getting stronger and stronger, watch JPY carefully, gold & silver too..

    • torehund says:

      ..but look at the transports. In fact one of the trucking Companies is plummeting, as they cant get hold of enough drivers. In order to do that wages have to increase and consumers have to pay, so inflation may just be around the corner due to wage Growth firstl in the not so popular jobs….Lol, choosing an occupation is the same art as bottomfeeding on Stocks, pick the looser and sweat it out.

  18. Pingback: Risk-Reward Report – 7.26.14

  19. Greg Seymour says:

    Dear Tony, I’m new to this but most impressed. Are you thinking Sept then rather than Aug for that Wave 4 down? Is there a target for that? I read ‘Avi’s Elliot analysis and he is also pointing to a Wave 4 down in Aug/Sept, to as low as 1975-1800! (NB 200 day moving average is 1850 so surely no lower than that??)

  20. theyenguy says:

    If I would have written the article I would have called a LONG TERM Bull Market Top.

    My take is the failure of credit and the death of currencies commenced the week ending July 25, 2014 pivoting the world out of the age of investing and into the age of debt servitude.

    On Tuesday, July 22, 2014, liberalism’s grand finale stock rally came as Asia Excluding Japan, EPP Emerging Asia, GMF, The Emerging Markets, EEM, EWX, DGS, EMMT, EMIF, EMFN, more specifically the BRICS, EEB, Brazil, EWZ, Russia, RSX, India, and China, YAO, jumped higher taking the Emerging Market Currencies, CEW, higher, on the Financial Sense report that China Buys US Debt At Fastest Pace On Record. This as CNBC reports China’s Debt Soars To 250% Of GDP, and Ambrose Evans Pritchard reports China’s Terrifying Debt Ratios Poised To Breeze Past US Level.

    On Thursday, July 24, 2014, liberalism’s grand finale stock rally completed as China Investments, YAO, CHIX, CHXF, CQQQ, ECNS, CHII, TAO, CHIQ, CHIE, HNP, CHII, CHIM, CHXX, REMX, EWH, traded to new rally highs, taking Asia Excluding Japan, EPP, to a new all time high, as Bloomberg reports China Manufacturing Gauge Rises To 18 Month High On Stimulus.

    The age of low interest rates and a Flattening Yield Curve, seen in the Flattner ETF, FLAT, flattening, is over through and done, as the bond vigilantes are in control of the Bow of Economic Sovereignty, and are calling the Benchmark Interest Rate, $TNX, higher from 2.49%, effecting coup d etats worldwide, commencing the failure of credit and the death of currencies. The failure of credit is seen in the chart of Aggregate Credit, AGG, topping out in value, as well as is seen in the chart of Distressed Investments, FAGIX, which underwrote QE 1, trading lower in value.

    In the age of the failure of credit and the death of currencies, wealth can only be preserved by taking physical possession of gold bullion, storing it safely and insuring it under a homeowners insurance policy.

    On Friday, July 25, 2014, World Stocks, ACWI, Nation Investment, EFA, and Global Financials, IXG, and Dividends Excluding Financials, DTN, traded lower. The world passed through an epic economic inflection point where the monetary policies of the world central banks no longer provide investment gains; the failure of fiat wealth investments has commenced on the exhaustion of the world central bank’ monetary authority.

    The S&P 500, SPY, traded lower from its Thursday, July 24, 2014, market top high.

    The failure of credit commenced the week ending July 25, 2014, as most Credit Investments traded lower in value at the end of the week. Aggregate Credit, AGG, now resides below its Wednesday, July 23, 2014, high, which manifested the Evening Star reversal candlestick chart pattern, communicating the failure of credit.

    The death of currencies that commenced in June 2014, continued intensifying the week ending July 25, 2014. Except for the Chinese Yuan, CYB, almost all the Sovereign Currencies, FXY, FXE, FXC, FXB, FXF, BZF, FXA, ICN, CCX, traded lower, with the result that the US Dollar, $USD, UUP, traded higher. Bespoke Investment Group posts Dollar Index Breakout.

    With the failure of credit, seen in AGG, trading lower, on July 24, 2014, and the death of currencies, seen in Major World Currencies, DBV, trading lower in June 2014, the age of investing is over, through finished and done; the age of debt servitude has commenced.

    • It is premature to say that either the stock market or the bond markets have topped out. If you turn out to be right, you will have made the greatest call of the milenium (thus far).

    • torehund says:

      Yen I aree to a certain extent on Your Death of the currencies.
      Currencies are diminishing in value as countries in a timely fashion (at the bottom of the markets) prints Money and buy their own Stocks. It happended With US and With Japan in 2012. The point is that the government have more trust in owning different Companies at the expense of their currency which, is systematically diluted. At this time I think China is announcing a “stimuli” as I think they have been silently harvesting their own Stocks for a very long time. If media is correct the US has been quadrupleing the monetary base post the Financial decline, in order to ( through banks and hedge funds) transfer real asset wealth into the ownership of the government.

    • Thank you, my limit order to buy gold worth one hundred twenty two dollars and thirty cents is placed. I will know on monday if it gets executed. Please continue to update me when to buy gold.

    • ‘If I would have written the article I would have called a LONG TERM Bull Market Top.’
      Lol! Have you finally nailed it yen guy?

    • 16golfer says:

      yenguy…..gold cannot be insured under a homeowners policy.

  21. Seconding Jedi’s comment: Yes, Tony has correctly identified the primary trend almost from the beginning in Mar. 2009. The recounts he has made have mostly pertained to the minor degree with the next most frequent applying to the intermediate degree. These revisions have only created problems for short-term traders who held unrealistic expectations for the short term accuracy of EW and OEW theory, which Tony periodically has warned people against doing.
    Tony in this Weekend update has presented us with a couple of alternative explanations of the present technical situation, and has developed a method for determining which of them is valid.
    He even offers a course of study on his methods which would give us the tools to do these OEW evaluations ourselves. I hope to be able to take his course, but in the meantime I pick up bits and pieces of understanding by reading his updates and the answers he gives to comments and questions by blog posters. Other posters who have taken his OEW curriculum have also helped me to learn somethings about how OEW works.

    • “somethings about how OEW works.” should read “some things about how OEW works.”

    • EW counting is about probabilities, not exacts. Never assume anyone’s wave count is an exact roadmap of where the market’s heading. FWIW, I still think we’re in Intermediate 4 and expect a sharp drop to the 1920’s this week. If it works out, I’ll be very pleased. But if it doesn’t I should still be OK. In good part because Tony’s work helps me understand and manage my risk. That’s really important…invaluable in fact.

  22. Violin Concerto in D Major Op.35 says:

    There was a intermediate cycle high due 7/23-24, but so far all SPX and Naz have done is fill Tuesday’s gap.

    The AAII Bull/Bear differential topped out on 6/12, and has downtrended to zero as SPX has strained to new highs. The invaluable rc1269 Greed/Fear Index © has also registered declining confidence while SPX and RUT have parted ways. These sentiment divergences are historically consistent with topping action, but it takes considerable time ukarlewitz…it takes time. Then again, we had this discussion six weeks ago.

    Market leader SOX has retraced a nominal .382 (.405) of the decline from 2000 and is now cascading like a juvenile delinquent’s loogie plummeting off a freeway overpass . Former market leader IBB is underperforming, as are KRX/BKX. Can tech do all the heavy lifting? AMZN ate it on Friday. What happens if another major tech firm pratfalls on earnings?

    The stock market is currently high risk/potentially high reward (if there is blow off). Who knows what evil lurks in the hearts of our Fed masters? Only Janet knows, and she is infuriatingly circumspect.

    Negative COT statistics have freaked out many inveterate gold bulls. It seems that everyone is bearish because everyone is bullish, which may or may not have first been said by Yogi Berra. Even so, those are weekly IHS on XAU and HUI and XGD and GDXJ. Stairway to Heaven? Or Highway to Hell?

  23. 5wavemodel says:

    Thanks Tony.


  24. Libor Val says:

    HI Tony, what do you think about my guess of time frame of waves – end of minor v in August around 2050 (end of August rather) then down int iv (3-4%) and int v till October (in 2011 the market topped 2 months befere QE ended then small down and went up again till the end of QE). then 1 month of PIV (in 2011 it took 1 month to go down 17%) – how deep it can go depends on the FED when they start QE 4 and then PV with QE4?

  25. JeffMilano says:

    Hello Tony,
    What is the possibity that from what is coming to an end from march 2009 is an abc instead of 1, 2, 3.
    Thanks Tony.

  26. Lee X says:

    Thanks Tony

  27. torehund says:

    Thanks Tony !
    Something is going ito a climax of some sort thats for sure….Here in Norway police men that got their first experience handeling guns and machine guns are swirling around in an inefficient and almost paranoid way looking for potential terrorist. They arrest mostly mysterious folks going on Fishing trips. Airspace here in Bergen is closed for whatever reason.
    Additionally the military is given an unconstitulonal right to assist the Police in any operation.
    Looking on the urrency chart I can see that a grand move is up against the dollar, lets see if it unfolds the coming week.

    • “Here in Norway police men that got their first experience handeling guns and machine guns”
      Surely you don’t mean to say that policemen in Norway have never handled a gun. I had the impression that Norway was full of gun owners and hunters (civilians, let alone policemen).

    • Torehund: You have been born and raised in Norway, I believe. Are you saying that in your lifetime of living in Norway you have never seen policemen carrying guns?

  28. gtoptions says:

    Thanks Tony ~ Great work as always.
    Enjoy Weekend.

  29. SPX 15-minute shows 5 waves down. FWIW.

  30. Great work as usual. Question: when was the last cluster of gaps like we’ve seen in the past 3 weeks? End of March?

  31. M1 says:

    Thanks Tony.
    Now a primary wave III being 1.62 times primary wave I looks very possible. Amazing !!
    I wonder if someone knows what Robert P is saying now. Is he still bearish after this 5+ years old uptrend ?
    Have a nice weekend

  32. Thanks again, Tony, for another detailed review/analysis of our markets. Your long-term analysis has never wavered from “bull market” while many others have been bear to bull long-term numerous times. Great job! Have a nice weekend, Tony, and all.

    -OEW Coffee Club Member (coffee goes better with Tony weekend commentary)

  33. llerias7 says:

    For some reason I like to get a picture of a probable timeframe for the mkt. I guess next November 4th. the Mid-Term Elections is a relevant event…makes sense if the P3 woul end there, does not? So…

    Int. IV (purple) – during month of August (down to OEW1900-1929)

    Int. V (purple) – September trough October (to new highs above OEW 2019) [end of P3]

    Just an opinion. Good weekend.

  34. 16golfer says:

    Thanks Tony. I’m buckling up for the ride on the roller coaster next week. In addition to what you mentioned, it is also end of month so I figure fundies will want to see a smash down early in the week so they can buy cheaper in anticipation of new money coming in. Will we see 2000 or will we have to wait like we did from Jan-June to see 1900? I think we will have to wait and we won’t see 2000 until PV.

    • Agreed, Golfer … and started short position on Russell Thursday when it broke its little uptrend (see attached). Seems price wants to stay in this larger downtrend for now. Support and lots of price clusters at 1125 to which it will likely drop to and then bounce. It remains to be seen, of course, whether the bounce can take price out of the downtrend. Pattern is still cup-with-handle (and handles are shake-outs). Just playing the swings here.

      • valunvstr says:


        I respect your work and maybe RUT will shake out and go higher but the formation IS NOT a Cup and Handle. You should look up the pattern. There are requirements for how low the handle can retrace (and it’s retraced to much of the cup already) and there is a volume requirement where volume should be light on the handle of which the down days are heavy distribution days. Both requirements violate the formation. Again, there might be in fact a basing formation occurring. It’s just not a cup and handle.

      • Hi, Valunvstr,

        Per the Investors Business Daily, rules are that when index is in bear market (which Russell is, as it is in A,B,C pattern, than handle can be deeper (see link below). An IBD book I have sitting here also says the handle should not be deeper than 61.8% retracement (which is why I show that retracement on the chart). In any event, it is definitely a deep handle — if it turns out to be a cup-with-handle. I don’t see high volume in the handle. All aside, I am not placing money on cup-with-handle (yet) — unless it breaks out of the downtrend. As I stated above, I went short a couple of days ago, but I will flip the switch should price break the downtrend. Thanks for sharing! This is how we all learn. 🙂

  35. llerias7 says:

    Tony, when you say “Intermediate wave iii has been underway since that low. Once it concludes we should see an Intermediate wave iv downtrend/correction, then an Intermediate wave v uptrend to new highs.” you mean the PURPLE colored on the daily chart, right?

  36. Yep as expected (by me from last week) the “expected pullback” never came, so we adjust the count and make ourselves look like a prophet to those who are fooled by the EW sleight of hand, which is glaringly obvious now…there are no magic forecasts, just busted and adjusted counts week in week out. Support/resistance, leave EW for those that want to lose money. Newbies be warned big fund managers don’t use it so why should you, don’t be lured into thinking it gives you an edge, all it does it drag you along with the rest of the herd who choose to follow. But hey let’s see what clues early next week brings, so we can change the count again…

    • lunker1 says:

      Tony never advised to short-term trade using his counts. He’s always indicated that his work is to be used for medium and long-term trading. He continues to indicate that this is a bull market and therefore the larger dip that was anticipated should’ve only been used to possibly add to long positions, not to get long again if you sold at a higher price. The information he presents need to be used correctly and it’s obvious you still don’t understand this or care to.

    • There’s no crying in the markets.

    • fishonhook says:

      Agreed. there is no secret sauce that helps investors foretell the future, we all look for it and ‘subdividing waves’, ‘failed 5th waves’ etc etc show that there is no road plan for the market.
      As to the guy who said further up that this site has been unwaveringly bullish, last fall the whole bull market was supposed to end early Spring 2014, then it was extended to ? Go back and check.

    • cmparis says:

      Marketupsanddowns – What’s your market call for next week and this next month? Tx

    • joecthetruthteller says:

      Yeah let’s see, let’s see, let’s see which way the wind blows, let’s see. The counts are the way to go with adjustments daily. 2000 was last week;s count?

  37. sunset2014 says:

    Thanks Tony. Any chance the recent high can be counted as a B wave of Int IV? I’m thinking that seasonality favours a Primary IV bottom around Oct/Nov. So we are running out of time🙂


  38. rolandu11 says:

    Although the SPX and NDX have made new highs, it does look after the decline on Friday again wobbly. The bulls have to be careful now, otherwise my indicators deteriorate sharply. Some indices are very oversold in the short term, but that does not help in all situations.

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