weekend update


The market opened the week with a gap up to SPX 1945, pulled back to 1928 by tuesday, then gapped up twice more during the week to hit 1964 on friday. Then some geopolitical news spooked the market and it sold off to SPX 1942 before rebounding in the afternoon. For the week the SPX/DOW 0.95%, the NDX/NAZ were +2.40%, and the DJ World index rose 1.65%. On the economic front positive reports were slightly more than negative ones. On the uptick: business inventories, export prices, the PPI, industrial production, capacity utilization and the budget deficit improved. On the downtick: the NY FED, consumer sentiment, the WLEI and weekly jobless claims rose. Next week we get the FOMC minutes, reports on Housing, Jackson Hole, Wy., and Leading indicators.

LONG TERM: bull market

The bull market continues to unfold as labeled. A Supercycle wave 2 low in March 2009 at SPX 667, kicked off Cycle wave [1] of Supercycle 3. Cycle wave bull markets unfold in five Primary waves. Primary waves I and II ended in 2011, and Primary wave III has been underway since the SPX 1075 low. Primary I divided into five Major waves with a subdividing Major wave 1. Primary III has divided into five Major waves as well, but Major waves 3 and 5 are subdividing.


Major waves 1 and 2 completed in late-2011, and Major waves 3 and 4 completed in early 2014. A subdividing Major wave 5 has been underway since that SPX 1738 low. Currently it looks like Intermediate waves i, ii, iii and iv have completed, and the market is in Int. wave v. When it concludes it should end Major 5, and Primary III as well. Then the market should experience its largest correction since 2011 for Primary wave IV. After that, a Primary V should take the market to new highs again to end the bull market.

MEDIUM TERM: uptrend probable

After the Intermediate wave iii uptrend ended at SPX 1991/1985 we counted a complex zigzag down to SPX 1905. This zigzag alternated with the irregular zigzag for Int. wave ii. Both corrections produced similar market loses of 4.4% and 4.3%. At the Int. wave iv downtrend low we had a good oversold condition in the daily MACD, and a positive divergence in the daily RSI. The technical conditions were set for an uptrend to begin, and the market has rallied about 3% off that low.


Off the SPX 1905 low we had a rally to 1945, a pullback to 1928, a rally to 1965, a pullback to 1942, and now a rally to 1955. We labeled the first rally and pullback as Minor waves 1 and 2. We are expecting this Int. wave v uptrend to unfold in five Minor waves, with a subdividing Minor wave 3. The rally to SPX 1965 on friday we labeled as Minute wave i of Minor 3, and the pullback to 1942, also on friday, could have been all of Minute wave ii. This would suggest the friday afternoon rally to SPX 1955 is the beginning of Minute wave iii.

Usually the daily RSI gets quite overbought during Minor wave 3’s. And thus far the RSI has yet to reach overbought. This suggests the market could be entering the best part of the uptrend. And, the recent uptrend confirmation by the NDX supports that scenario.

We offer one caveat. Should the SPX drop belows 1928 before the uptrend is confirmed the recent advance would be counted as an a-b-c rally to 1965 in an ongoing Int. iv downtrend. Medium term support is at the 1929 and 1901 pivots, with resistance at the 1956 and 1973 pivots.


Short term support is at SPX 1942 and the 1929 pivot, with resistance at the 1956 and 1973 pivots. Short term momentum ended the week above neutral. The short term OEW charts ended postive with the reversal level now 1951.


As noted above we labeled Minor waves 1 and 2 at SPX 1945 and 1928 respectively. If Minor 3 tops at 1.618 times Minor 1 it should reach SPX 1993. If Minute waves iii, iv and v top at 1.618 times Minute i, should Minute ii hold at 1942, Minor 3 should reach SPX 2000. Right now, the market’s objective is to clear the 1956 pivot range, and then the 1973 pivot range. For the entire uptrend we noted four levels last weekend: SPX 2003, the 2019 pivot range, SPX 2028 and the 2070 pivot range. Just some numbers to keep in mind in the weeks ahead.


The Asian markets were all higher on the week for a net gain of 2.2%.

European markets were also all higher for a net gain of 1.8%.

The Commodity equity group were all higher gaining 3.1%.

The DJ World index gained 1.65%.


Bonds are still uptrending and gained 0.6% on the week.

Crude is still downtrending but only lost 0.1% on the week.

Gold is still uptrending but lost 0.4% on the week.

The USD remains in an uptrend but finished flat.


Monday: the NAHB at 10am. Tuesday: the CPI, Housing starts and Building permits. Wednesday: the FOMC minutes. Thursday: weekly Jobless claims, Existing home sales, the Philly FED and Leading indicators. Friday: a speech from FED chair Yellen at Jackson Hole, Wy. at 10am. Jackson Hole, FOMC minutes, Housing reports, should be an interesting week. Best to your weekend and week!

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

About tony caldaro

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194 Responses to weekend update

  1. magicianme says:

    Is that a little H&S on the M5?

  2. torehund says:

    Think wave 3 for USD vs Norwegian Crowns started today. And it could be time for some cake, yellowcake; prepared any way you like it….

  3. manunidhi21 says:

    Namaste Tony !
    The BSE(India) is again at new top.(Unless you take 27.7 spike as B)
    any change in views ?

    • tony caldaro says:

      no, still currency driven

      • torehund says:

        Currency driven is good as long as positions are geared, thats why I gamble on some warrants in Norwegian shares.. I hope they rise at a faster pace than the currency is able to depreciate.
        I think that Europe is in a deflationary state for now, and that underpins the Euro, USD is expectedlyy strong as Growth is expected. However the European banks and goverments can suddenly do some funny manouvers that may make folks flee the currencies altogether.

      • 16golfer says:

        Tony….you mentioned several weeks/months ago, an uptrend usually ended about 2 months before the end of QE. We are pretty close to that now. Do you still hold to that line of thinking?

      • tony caldaro says:

        That is still on the table.
        QE 1 ended in June 2010 … market topped in April
        QE 2 ended in June 2011 … market topped in May

  4. Peter Sliney says:

    CHUGGA chugga chugga CHUGGA chugga chugga CHOO CHOOOOOOO.
    Next stop 2000.

  5. sunset2014 says:

    Hi Tony

    Is it safe to assume Int. IV is in? Still showing as green and waiting for a purple on the 60min🙂


    • At what point can you know for sure that Int. IV is in? If SP tested the high but didn’t take it out and then went back down to challenge the lows, would we still be in Int IV? Or would this be the start of Primary IV? Or is this the challenge of working with EW? Any thoughts would be helpful.

      • tony caldaro says:

        No confirmation yet.
        But NDX has confirmed, NAZ is quite close, so SPX/DOW should be next.
        Market trends tend to move in unison.
        Can not have P4 until we make all time highs.

    • tony caldaro says:

      Yes, certainly looks like an impulse wave

  6. lunker1 says:

    sorry I’ve been waaaaay over the 3 post daily quota lately.
    been catching up for time away lol.
    back to 3 I go.

    • gtoptions says:

      Very appreciated Lunker. Nice work.

    • perversionofthemean says:

      Take my three. They don’t do me a lot of good anyway. 😉
      (took profits @ Friday’s open, then felt good seeing the selloff while my plane was taxiing, but missed the opp. to re-load because no internet on HI Air. Oh well, will go diving now while in Kauai.)

  7. XScaler HB says:

    Can’t you just feel it? My A=C target IF this is an ABC is 1970. See the trouble it’s having here? I’ll be a buyer over 1980 with short puts. But this level is gonna make or break it. I’m leaning towards the upside.

  8. lunker1 says:

    minute 3 from 1941.5 looks like it has nested 1,2’s as well.

    w1 1941.5 to 1951.21 is > w3 1946.32 to 1955.03
    and w5 is from 1951.65 to 1972+ (now)
    which would make w3 the smallest but it can’t be

    so now I’ve got:
    Micro 1 1951.21 (10 pts)
    Micro 2 1946.32

    Nano 1 1955.03 (9 pts)
    Nano 2 1951.65
    Nano 3 1966.52
    Nano 4 1964.94

    Micro 3 target:
    Nano 5 = 1 = 1965 + 9 = 1974

    Micro 4 target s to the prior Nano 4 1965.

    then Minute 3 targets are:
    Micro 5 = 1 = 1975
    Micro 5 = 1.62×1 = 1981
    Minute 3 = 1 = 1942 + 36 = 1978

    Minute 4 target is whatever Micro 4 is ~1965?
    but can’t have 4 into 1 at 1964

    then Minor 3 targets are:
    Minute 5 = 1 = 2001
    Minute 5 = 1.62 x 1 = 2023

    Minor 4 to retrace 23% to 38% of Minor 3

    Minor 5 = 1 = 40pts
    Minor 5 = 1.62 x 1 = 65 pts

    P3 Min: 2013
    P3 Max: 2066

  9. lunker1 says:

    Perhaps 1972/3 for 3 of minute 3 then 1964 or 1966 (bottom of 1973 pivot) for 4 of minute 3. Then 5=1=2001/3 for minute 3

  10. gtoptions says:

    Thanks Tony ~ Great weekend update.
    SPY ~ WPP @ 195.10 ~ Price stalled at the WR2 @ 197.40
    FOMC weeks have a tendency to seek out that WPP. This time may be different.
    Hourly -/div but Daily RSI is strong.

  11. cmucha68 says:

    Went short at the high exactly on the spot. Now the next Ukraine bullshit rumor can come.

    • uncle10 says:

      cmucha, you seem angry. Trading while angry usually no good. I would suggest chill a little and be less angry. good luck my friend.

    • lunker1 says:

      Enough of the bad language already. That’s 3x today. Show some class.

      • cmucha68 says:

        No lunker. I am not angry. Thanks for your worry. I was hoping for a better entry but that’s ok. We have to take trading like a sportsman. And new opportunities come like trains in the station. Every hour a new chance to get on board somewhere. There is enough money on the market for all of us on this board. Good luck to you as well !

  12. No one forced me to dabble in financial markets..It is all my doing. SHORT at 1967.8

    No one asked me or forced me to SHORT at that level.

    Booking losses at regular intervals is the ONLY way out.

    • lunker1 says:

      Why post a trade if you don’t say why you made the trade and also what your target is? This blog is to share information to learn.

      • Please read what I posted earlier. I posted few days before “there is no PIVOT at 1956, but resistance at 1968”.

        So, I shorted, but SPX now at 1970.4, so I said “booking losses…”

        However, it can go max 1979 (as I looked at charts again) during official trading, but after hour future could be higher..

        But from here, it will turn back, it will go to 1962 first and then 1979

    • I have a small account and I think of it as a learning account because I can’t papertrade, I must have skin in the game. If I were short then just wait it out for the 4 that is coming in the next month. Tony is never wrong on direction but timing can’t be predicted. Know the WHY of what you do and then if you are wrong you flip and go the other way. Some sites have been calling for a crash since 10′ and each dip they would just change the charts. Not Tony he doesn’t need to.

  13. bolderbob says:

    Hi Tony,

    I know this is a bit premature but I was winding how to think of minute 5 that will end P III? 5th waves in final moves often truncate and I think it could be especially true in minute 5 of (the final move) in this PIII. Do you lean toward minute 5 to end PIII as a probable truncation or do you think it will set a new high above the minute 3 that is unfolding now? Many thanks Tony!

  14. cmucha68 says:

    Unusual not filling the gap. May come later. All indicators overbought. Let’s see.

  15. CygnetNoir says:

    I’m still thinking SPX 1991 is “money in the bank” by the end of this week or next (well, almost …. I kinda spent that money this past weekend, so you might say I was “paying it forward” (in a backward sorta way).

  16. bobhopium says:

    Dow has broken out of its downtrend channel, but the neg/div holds me back.
    Dow cash 60min.

  17. cmucha68 says:

    Dax not participating. Just a bit up. That’s all for now.

  18. uncle10 says:

    Good work Tony. Thanks.
    those vix futures lead me a stray for the gap up…..😉
    Strong like bull

  19. blackjak100 says:

    Like to see DOW finally showing RS

Comments are closed.