friday update

SHORT TERM: rally continues, DOW +128

Overnight the Asian markets gained 0.6%. Europe opened lower and lost 0.6%. US index futures were lower overnight, but rebounded, as the market opened two points above yesterday’s SPX 1951 close. In the opening minutes the market rallied to SPX 1958, then pulled back to 1946 by 10am. At 10am New home sales were reported lower: 467k v 504k. The market then turned around and rallied to SPX 1963 by 12:30. After a pullback to SPX 1955 the market moved even higher. Heading into the close the SPX hit 1965 and closed there.

For the day the SPX/DOW were +0.70%, and the NDX/NAZ were +0.70%. Bonds gained 1 tick, Crude lost 75 cents, Gold slipped $2, and the USD was lower. Medium term support rises to the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Today the WLEI reported its first contraction since mid-2012: 49.9% v 51.6%.

The market opened higher today, dipped, and then rallied above yesterday’s SPX 1962 high. We can now count a seven wave advance, if SPX 1965 was the high, from the low at 1878. The advance from SPX 1821-1898 was also seven waves. This suggests, this entire SPX 1821-1965+ rally may be all of Major wave B. More on this in the weekend update. Short term support rises the 1956 and 1929 pivots, with resistance at the 1973 and 2019 pivots. Short term momentum continues to display negative divergences as the market moves higher. Best to your weekend!

MEDIUM TERM: Major B uptrend probably underway

LONG TERM: bull market


About tony caldaro

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95 Responses to friday update

  1. bhupal777 says:

    From yesterday on twitter feed ‏@Cygnet_Noir has been posting the following.

    “First read Then read Note wave counts & changes – NOT criticism: TC’s Project, Monitor, Adjust”

    If I understand it correctly in 2007 when the market was making a top, Tony was expecting 5th wave extension and in fact calling for a 3 of 3 wave in a larger 5th wave. But the market topped and forced Tony to end the SC1 at 1576 in S&P. I am also not trying to criticize Tony here but how he can adjust to the price action and alert his followers in right direction unlike other EW services out there stubbornly wrong for 6 years in a row. Thanks Tony.

    • This is now a discussion being presented out of the context I in which I was using it. Do your own home work and attribute it to yourself. I use twitter to avoid the idiot villagers with pitchforks and torches – why throw me in front of them here? My apologies to Tony.

  2. omahared says:

    Thanks Tony.

    On Tuesday, I wrote:

    “In the great corrections of 2010 and 2011, relief rallies made a habit of fizzling by the FOMC announcment, if not a day or two before. We have an FOMC announcement 10/29. My target for Major B is the 1973 pivot by 10/28.”

    I’m sticking to my guns. This Fed announcement has all the trappings of “buy the rumor, sell the news.” What could they possibly say that would sustain the upside momentum since the Major A low? I view this rally into 1965 at the close today as an absolute gift to start building a very cheap, low risk short for the Major C ride to come.

  3. fotis2 says:

    Thanks Tony wave B certainly living up to its reputation however your pivots proved priceless to my trading!!

  4. I reman in the bear camp and am also feeling the squeeze presently like others. Nevertheless I can’t find enough evidence to switch sides at this juncture. An observation to share … looking at a 24 hour chart made up of 2-hour candles of the DAX covering its Major C of Primary IV, which coincides in timing with all of Primary IV for the SPX, I see one relentless wave down coinciding and ending in time with SPX 1821. Very difficult to find a counter rally (i.e. Int. B of Major C) during this decline phase. The largest upswing of the 1,541 point decline measures only 187 points, which was wave 2 right at the top. The longest period of advance was only 36 hours. This during a decline covering 4 weeks. Although not a guarantee, this type of data suggests the DAX has only been counter rallying in its Int. B since its lows. Since those lows the DAX has now retraced 720 points (i.e. 46.7%) back up, the high of which came on Thursday as the European index futures could not force new highs as the DOW & SPX were closing out the week at their highs. If the DAX is only having its Int. B counter rally now, with Int. C down of Major C to follow, then it is almost certain SPX is also presently counter rallying in Major B (with Major C down to follow).

    • Kisshu2 says:

      Dax may be in intermediate c still or major b if major a is complete according to tonys chart;

      • Hi Kisshu2. The count on Tony’s chart has changed recently which I haven’t noticed. Thanks for pointing that out. I think I still prefer the former count. In any event the issue at hand boils down to whether the DAX performed 5 waves down (using traditional EWT) whilst SPX was declining to 1821. If so, the DAX needs to go once again after an abc retracement rally in another 5 waves and likely soon. If the DAX decline was only 3 waves then possibilities change.

    • jp7972 says:

      Hi, I see the futures hit 1965.6 and have pulled back to 1955. Could this be the last move up on your chart that was needed to complete B? We’ll see. Love your charts – please keep posting. JP

      • joecthetruthteller says:

        jp7972 says:
        October 27, 2014 at 4:14 am
        Didn’t you read his comments mid week? He’s been studying this market for thousands of years!>>>>>

        No need for snide remarks. Rabbit has been correct in his calls lately.

        Currently, futures slightly negative. I think the reversal should come in on Tuesday, IMO.

  5. “vivelaamo says:
    October 24, 2014 at 2:12 pm

    We all know there is going to be a massive gap up sunday and new highs in the next few weeks. Just look at the whole of the past 7 years of how this guys. Once we get new all times highs then considering another pull back. There will be no crash. The markets will just continue to rise. THERE IS NO P4 or P5. Elliot wave theory does not apply anymore.”

    This was from this afternoon but I wanted to respond. So the market will go up forever and the rules don’t apply anymore because this time it’s different? Do you really think that’s true?

    • CB says:

      twosided, it’s like going into a Safeway store and getting someone’s view on, say, GOOG. Just because someone throws you a few crumbs it doesn’t mean you have the take the bait.
      No reasoning, no chart…just someone’s opinion… .#CWOT (complete waste of time). Next! :LOL:

      • lunker1 says:

        way too much baloney on here lately.

      • vivelaamo says:

        Do you really need me to post you a chart of the whole of ‘Primary 3’. Also there is no reasoning because that’s my point, the market is totally out of tune with reality so I can’t point to reasons and rational for my opinions. I can see it keeps going up while everybody seems to think it should turn.

        Out of interest is there any move that could occur from here that can’t have an OEW label added to it?

      • CB says:

        Not sure “posting a chart of the whole of ‘Primary 3′ has any bearing on Monday’s opening as you seem to suggest. SPX can gap up 20 points, then quickly retrace those 20 pts.. Or it can gap down 20 pts, and retrace that. Also, not sure who you mean by “everybody.” In addition, if you ” can’t point to reasons and rationale for your opinions,” then it’s somewwhat difficult to have a reasonable discussion, isn’t it. Sweeping generalizations are always an issue, and if you argue like that in grad school you’d be flunked pretty fast. So zero content is still zero content. And, obviously, you have the right to express your opinions just like anyone else. How useful that is, tradingwise, is another matter. There are plenty of money managers with advanced degrees competing for business these days, so why should we lower our standards using anything less than academically-accepted standards to manage our own hard-earned money? No reason to waste our money using “magical” thinking, imo.

    • Gary Lewis says:

      “We all know” that people who make comments like this are “drinking the kool aid.” Eventually, they disappear. Anyone seen Scotty? Could have been him that I passed on the street yesterday, sitting on the side of the road with a sign, “Homeless, Bet Wrong on the Bull Market, Hungry” I gave him $5 😉

      • vivelaamo says:

        Why do you have to resort to posts like that? I hope you are all right and that it does turn and drop hard. I’ll love to short it. But the fact is we have been in this scenario so many times over the past few years and it just keeps on climbing further than anyone expected. Call it a squeeze or a trap or whatever else you want to call it. But whoever is long is making a killing while the bear camp are left with insults and straw clutching.

      • vivelaamo says:

        Also Mr Lewis could you please answer this question for me:

        Out of interest is there any move that could occur from here that can’t have an OEW label added to it?

  6. opader says:

    It seems to me we are in Primary 5. The move up from 1820 is looking more and more like an impulse move and not a corrective one. As of close of Friday, it seems that we are in Minor 5 of Intermediate 1 of Major 1 of Primary 5. Here is the count for Minors 1 – 4 of Intermediate 1:


  7. soulsurfer says:

    Thanks Tony! WLEI (weekly leading economic indicator) peaked last in late May of this year and has been sliding down since… growth now negative for the first time since august 2012… seems LIKE the market doesn’t care…

  8. Awwww what’s happening are there cracks starting to appear in the current forecast. Surprise surprise let’s see when the analysis will change to fit the narrative. Careful this is one big B wave that will soon complete and make everyone very rich (at the expense of the richer) …..LOL not

  9. fionamargaret says:

    The worries in Europe are that without QE of some kind continuing, the markets will tank to such an extent, the banks will be unable to cope – basically forming a case for interference ad infinitum.
    This has been the number one discussion all week.
    Now how that affects OEW (or even if it still works under these conditions), I defer to Tony.

    Thanks Tony.

  10. wavecounter says:

    Thanks for the updates as always Tony. The Dow has now rallied almost 1,000 points from the lows just 8 or 9 days ago with any bad news just causing 100 pip dips along the way. A major change of sentiment needs to occur soon to cause another big sell off to happen – not sure what the catalyst for that is yet but we’ll wait and see.

  11. cmucha68 says:

    So rabbittrader, your high of Thursday has been challenged and slightly exceeded (even you doubted it a little bit). Now let’ s see if prices will drop as you mentioned. Best to you.

  12. M1 says:

    Thx Tony.
    R2K looks like is missing the rally suggesting small caps are in trouble (bear market), however, XLI is suggesting this is an impulsive wave.
    Question: should we see more upside without the expected pullback, how would you label the1821 low ?

  13. playitkool says:

    Thanks Tony, can hardly wait for your thoughts tomorrow. Opinions getting strong again last time that happened we had a huge move in the market. May peace be with you.

  14. CB says:

    Thanks Tony! Have a great weekend everyone!

  15. dwr51 says:

    Just curious on what your thoughts are regarding the lack of volume today.On most of the ETF’s that I track and trade the volume was at least half of the 10 day average and on some the volume was 300% lower.
    Wishing you well

  16. Gary Lewis says:

    SPY closed exactly at the declining 20-week moving average. Can’t recall ever seeing an exact 0.00 Standard Deviation. Looks like you’ve got to sell it here but I expect an attack of the low in 2 weeks (three week test of the low). Don’t markets usually go down when the Republicans are running the show? I suppose that it will coincide with post-election.

  17. cmucha68 says:

    2 points close above 1956 pivot range (1963) so what ? Still everything fine so far. Enough room to the downside. Can’t imagine that the market will not test at least the 200 once more and even breaking it. Like said earlier, if Tony had it wrong on a Primary wave in all those years he might not be around anymore. Ok, it is not easy with smaller counts like minors and micros. And yes, the market is also not far away from the lower range of the 1973 pivot. It may kiss it and good bye. Bears should not get nervous and the Bulls should keep tight stops if open over the weekend or reduce positions. A weekend can be full of surprises.

  18. Thanks Tony! Your pivots rock, and you are one Awesome Dude, dude🙂 I look forward, as always, to your weekend report. 🙂

  19. FWIW, McHugh has Monday, October 27th+/-, as a major phi-mate turn date and has been calling for it to be a top.

    • blackjak100 says:

      But chris says he’s worthless so I wouldn’t pay attn to him

      • He is next to worthless, but he has some accuracy with these phi-mate turn dates. He called the top in September 2008 and collapse to the day months in advance.

      • blackjak100 says:

        Ok we shall see

      • randomacts4 says:

        Blackjak – I’ve read a lot of negative reviews of McHugh over the last several years as well, but his study and use of these phi-mate turn dates is one very small aspect of his work that I do pay some attention to. I tend to regard more heavily the Bradley turn dates, the next Major one being November 20.

    • cmucha68 says:

      7,17, and 27 are often turning points as I have observed many times.

      • joecthetruthteller says:

        Random, Nov 20 according to Bradley is to the UPside, not down.

      • randomacts4 says:

        Joe – Do you have a link you can provide for me? I’m guessing you most likely know this already, but keep in mind if the Bradley Siderograph itself shows a low, it may very well be a high and vice versa. The dates, again as I’m sure you are aware, are merely changes in trend. They’re not predictive of highs and lows. Please advise if you have anything. Thanks!

      • joecthetruthteller says:


        I got my dates a little mixed up too. Sorry I don’t have the link – but this is what I noted in my notes:

        See below for a graph of the Bradley Siderograph indicator for 2014. Turn dates for 2014 include the following:

        February 5 – DOWN
        April 1 – UP
        July 17_ DOWN
        October 7 – UP
        October 16 – DOWN
        November 22 – UP
        December 7- DOWN
        December 26 _ UP

      • randomacts4 says:

        Joe – Not to worry. It’s interesting because I’ve seen sites with the dates you provided and I’ve seen others with the graph below. If you scroll down a bit, you’ll see on the right hand side the dates that are considered major and minor.

  20. Tony, time for you to talk about the alternate count. If you bring that up after new highs then it would be too later.

    • blackjak100 says:

      If you read his updates, you should know alternate count

      • Enlighten me since all I see here is talk of Pri IV in progress.

      • fishonhook says:

        Yes Blackjak – what is the alternate count. Please tell us?

      • blackjak100 says:

        If the market goes above 2019, P5 underway which means a quick end to bull market. I’m not being smug but he’s mentioned it several times.

      • fishonhook says:

        I think you are imagining that Blackjak. I have never seen that in any up-date. Please find it for us and you have an instant apology from me.

        Maybe you mixed up the stop that Rabit said put on the shorts, or even me and others saying that new highs would suggest that P5 is under way and that is Ok because a quicker end to the bull will bring nice shorting opportunities.

        But I have not read such a thing from Tony. I wait with my apology in my hand for you to find the statement.

      • I think I remember seeing something to that effect but don’t remember the context. Better if Tony chips in.

        Though waiting for 2019 to decide one way or the other is pretty late.

      • blackjak100 says:

        It may not have been in an update but in a comment(s) he wrote. However, I do recall seeing in an update that if P4 was brief and shallow like 2007, P5 would be a quick affair like 2007. If you don’t believe me simply ask TC himself.

      • tradeanimal says:

        Have to back up BJ on this point…Tony has mentioned a short PIV as being negative several times in earlier weekend updates. Would have to go back and look through them.

      • fishonhook says:

        Yes short PIV has been mentioned as bad, but I haven’t seen any lines in the sand for switching from PIV to PV and an alternate count. Maybe I missed it. Hopefully Tony will mention it in his Week-end up-date.

      • cmucha68 says:

        I have read it too. It was a response to someone’s question what would happen if P4 is short and price exceeds ATH. He said it will put a quick end to the bull market. But I would rather like to see a continuation of P4 with sharp declines ahead and then P5.

      • randomacts4 says:

        To help answer this, I will copy and paste this excerpt from Tony’s Weekend Update of October 11:

        “When Primary IV does conclude we should get a rising Primary wave V to all time new highs. The size of the Primary IV correction should help determine to length and duration of the Primary wave V to follow. A shallow Primary IV should lead to a short and quick Primary V. A steep and lengthy Primary IV should lead to a long and strong Primary V.”

        At this point, unless I, too, am mistaken, ‘shallow’ and ‘steep’ have not been as yet quantified, though as we progress, I am certain he will zero in on the numbers.

      • tony caldaro says:

        That is correct.
        The steeper P4 the longer P5

  21. pooch77 says:

    Bullish fridays are usually followed by bullish monday losing faith in PVI

  22. blackjak100 says:

    wLEI now below 50%???? Hmm…is this market front running more QE?

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