weekend update


The week started at SPX 2071. On Monday the market rallied to the previous all time high at SPX 2079. Then on Tuesday, Wednesday and Friday it made higher highs, reaching SPX 2093. For the week the SPX/DOW gained 1.15%, the NDX/NAZ gained 0.85%, and the DJ World index gained 0.80%. Economic reports for the week were mixed. On the uptick: Q3 GDP, personal income/spending, the FHFA index and weekly jobless claims improved. On the downtick: existing/new home sales, consumer sentiment, durable goods, and the WLEI. Next week, another holiday shortened week, there are only two reports scheduled: ISM manufacturing and Construction spending, both on Friday.

LONG TERM: bull market

With three trading days left in 2014, it appears this bull market will soon enter its sixth year. The long term trend is up, the medium term trend is up, and the short term trend is impulsing higher. The market is up 13% for the year, and may even hit 14% before close of business on Wednesday. All in all a fairly solid gain considering the alternatives.


We continue to label this market as Cycle wave [1], the first bull market of the multi-generational Super cycle wave 3. Cycle wave [1] should unfold in five primary waves. Primary waves I and II completed in 2011. Primary wave III has been underway since then. Primary wave I divided into five Major waves: with a subdividing Major wave 1 and simple Major waves 3 and 5. Primary wave III appears to be alternating with that pattern: a simple Major wave 1 and thus far a subdividing Major wave 3. Since Major wave 3 has yet to complete, it recently extended again, we still have Major waves 4 and 5 ahead before even Primary III completes. Then after a Primary IV correction, Primary V should then take the market even higher. After 69 months of generally rising prices, the market has more than tripled. It appears this bull market has many months to go, if not, a few years.

MEDIUM TERM: uptrend

Nearing the SPX 2079 early December uptrend high, we expected a correction ranging anywhere from 5% to 15% to unfold. The reason for the range is that we have been monitoring three potential counts for this bull market. The preferred count, which has been posted in these reports, suggested a 5% to 10% correction. Ten percent if Major wave 3 completed at SPX 2079, or 5% if Intermediate wave v of Major 3 was subdividing.


After the uptrend topped and the correction was underway, we tracked the wave pattern to observe how it was unfolding. We counted a simple zigzag down to SPX 2024 for an A wave, then a simple rally to 2056 for wave B. After that the wave C that followed became complex. Nevertheless, we identified a potential low at SPX 1973 a week ago Tuesday. At that low the market had corrected 5.1%, and all of the technical parameters we track suggested a potential downtrend low. The following day the market rallied in five waves to SPX 2012, pulled back to 1992, then rallied to 2017 before ending the day at 2013. A new uptrend appeared underway.

This week OEW confirmed the uptrend. With only a 5% downtrend correction, an Intermediate wave v extension is probably underway. This suggests the uptrend high at SPX 2079 was only Minor 1 of Int. v, and the low at 1973 Minor 2. This uptrend should be Minor 3. Our initial target for this uptrend is the OEW pivot at 2214. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2214 pivots.


As noted above, from the downtrend low at SPX 1973 the market rallied five waves to 2012. We are counting that as wave 1 of Minute i of this Minor 3 uptrend. Then after a pullback to SPX 1992, wave 2, the market rallied in wave 3 of Minute i. Thus far, we can count seven waves up from that low into Friday’s high at SPX 2093. This suggests a pullback, and then one more rally to end this third wave.


The internal structure of this rally suggests a maximum high, for this third wave, at SPX 2100. Should that level be exceeded before we observe about a 20 point pullback, then the count would have to be updated. The updated count would suggest Minute i and ii ended at SPX 2012 and 1992, with Minute iii underway. And not, as previously noted. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2100 and the 2131 pivot. Short term momentum is displaying a negative divergence.


The Asian markets were mostly higher on the week for a net gain of 1.0%.

The European markets were mostly higher on the week for a net gain of 0.9%.

The Commodity equity group were all higher for a net gain of 3.4%.

The DJ World index gained 0.8%.


Bonds continue to downtrend and lost 0.5% on the week.

Crude also continues to downtrend and lost 4.6% on the week.

Gold is still in an uptrend, had a choppy week, and gained 0.1%.

The seven month uptrend continues as the USD gained 0.5% on the week.


Thursday: holiday. Friday: ISM manufacturing and Construction spending at 10am. Nothing noted on the FED’s agenda. Best to your weekend and New Year week!

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


About tony caldaro

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128 Responses to weekend update

  1. CB says:

    thanks Tony.
    Case-Shiller and consumer confidence data coming out tomorrow, btw.. Gl all.

  2. gasman88 says:

    I looked at few utility stocks: DTE, ED, EIX, NU, SCG
    Boy, these charts look like 1999 tech stocks, is the market trying to tell us something?

  3. Hi Tony,

    With oil down as far and as fast as it is, is there any possible turn in sight? Where do you see oil at from an OEW perspective?

  4. NG (Natgas futures) confirming a very bullish trend reversal Morning Star candle while UNG is confirming a very bullish trend reversal Morning Doji Star…at minimum we should close the gap.

  5. Soodi says:

    Markets will continue to move higher till 2nd/3rd of Jan 2015 (SPX 2150) then look for nice healthy correction (5-10%).

  6. Wow. So everyone – and I mean EVERYONE – now knows that next year, the year ending in ‘5’, is typically a biggie to the upside. All the wave guys are now pounding the table about SPX 2400+ and how it’s sunny days are here again. Bla bla bla.

    What if, just what if.?

    The market has a funny way of punishing those who sit on the same side of the boat all at the same time. One thing I’ve learned over the years is how many ‘truisms’ in the market are actually very dead wrong when you look at the facts and numbers. Hulbert is great at pointing that stuff out. But I think everyone should read this article from Marketwatch over the weekend. It’s pure quantitative analysis about the possibility of next year.


    • shark says:

      On a secular basis, the only sentiment that matters is amongst the governors of the Federal Reserve. In recent years, successful traders have adapted traditional technical/Elliott/sentiment measures to accommodate the new reality of active governmental stock market intervention. Until proven otherwise, the name of the game remains buying the hard pullbacks to intermediate support and limiting yourself to going short on those occasions when you are overwhelmed by the compulsion to lose money..

    • gasman88 says:

      In this ‘post 2008 market’, contrarian analysis only work if they predict that the market will grind higher. So if you’re trying to be contrarian because everybody thinks 2015 will be a bang bang year, most likely you will be wrong and 2015 will be up big.
      Just like betting against the belief that we will have a year-end-rally. We are grinding higher every day despite collapsing energy stocks, Greece and overbought conditions.
      CBs have re-written most of the trading rules

  7. mjtplayer says:

    I’ve been talking about Greece for weeks, warning what could happen. Today, Greece failed for a third time to elect a president and now voting goes to the people in a general “snap” election sometime very early next year – this is what the market didn’t want. This isn’t panic, but could really cause a mess in global markets if the general elections go against the EU.

    Currently, the far-left “Syriza” party leads in the polls. This is the party supported by the unions and gov’t workers in Greece to end the austerity and bailout packages – basically giving the EU & IMF the middle finger. That would trigger 2010 all over again.

    Keep an eye on this, I’m telling you. No date has been set for general elections yet, but they are proposing Jan 25th.

    • llerias7 says:

      meanwhile minute i yet to finish. ..

    • Mjt couldnt agree more..was saying last night if the vote goes poor we spike down but in this schizoid market we likely come right back..its all business as usual till news is in ur face..so lets forget till we must ….

    • fotis2 says:

      Could be but the probability its already priced in is higher I really doubt the big players are still watching the Greek comedy err… tragedy??

      • priced in? only the greek market priced it in..this market ignores everything till it cant…party on till the midnite hour,…..if the new govt comes in they will likely cause havok with greece… perhaps greece is not as relevant as iin 2010 but certainly no markets here or euro priced it in

    • torehund says:

      Not only Greece, in Sweden the reelection was cancelled, fits With further currency depreciation vs USD.

  8. M1 says:

    “I have directed secretary calmly to suspend temporarely the convertibility the dollar in the gold or other reserve assets”…
    R Nixon 1971

  9. Tony I jumped on here just to ask one question that I can t believe no one else has asked yet:
    You are bullish (for possibly years) but the SPX monthly chart MACD is sitting at +150–the complete opposite reading of 2009 lows (-150).The 2009 low was a washout event at -150…why isn t this current area of MACD a blowoff area (and fairly a quick one in fact….2009 reversed at lightning speed for a monthly chart at that point.Thanks

  10. X-mas Sales: WS and media pundits throw everything but the kitchen sink
    1. Prior to Black Friday WS proclaim that X-mas sales were going to be a blow-out year;
    2. Consumers failed to deliver on Black Friday, so WS assures us that Cyber Monday will definitely deliver as the consumer shopping habits have shifted to online shopping;
    3. while online sales did manage to preformed as expected; nonetheless, it has failed to make up for the boots on the ground sales – translation X-mas sales continue to disappt overall;
    4. WS grows nervous of a disappting X-mas season; but no worries says the WS mad hatter for I hereby proclaim that a new shopper has emerged to save the X-mas shopping season and they are know as “The Procrastinators;” …….Go Figure! that is the last crowd to rest any hopes on as a savor.
    5. Now X-mas has come and pass, and the savor “The Procrastinators” came and left emptied handed. So what now? “Hakuna Matata,” says the WS mad hatter, I hereby introduce you the true X-mas savor, “X-mas with the Kranks.” …… and there you have it according to MasterCard this year’s consumers decided to skip X-mas and in favor of a more preference for “experience” (dining and lodging) over the goodies. …..Go Figure, X-mas has been saved by The Kranks!!!!!!


  11. Hi,thanks Tony

    with the Dow apparently confirming the brake of 2000-2007 trendline tops,the next intuitive target could be a pullback to 2003 trendline (in blue),thanks


  12. crazyworld2013 says:

    i read this blog everyday.. and find it most interesting.. sorry i am not an EW expert but have learnt a lot from reading this blog.

    It seems to me that counts are just changed to match what has happened and hope that new counts will provide appropriate future guidance. I’ll say this for the most part it has helped me..

    But after this week’s reading i’m getting a bit skeptical. after such incredible gains since 2011 lows, as i got burnt badly in 2007 & 2011. and it seems like we’re at a similar point just before the big crash. Except now almost everyone thinks CB have our backs and nothing can go wrong.

    IMO everyone is very very bullish forecasting incredible gains for the year ahead just like in 2007 before the stock market turning point. This blog isn’t alone, it seems like almost every blog out there is bullish. Perhaps the boat is getting to lopsided?? Others say market is just getting exciting as about to enter the IRRATIONAL EXUBERANCE phase. Even David Tepper says it looks like we’re in 1998 and we all know what happened in 1999

    Perhaps RUT making a new ATH is a bull trap, since almost everyone is convinced we have a breakout and now off to the races to much higher levels.

    But there are negative divergences forming in several tech indicators, and yes i understand that negative divergences don’t work in bull markets, but nonetheless there have been 2 pullbacks since september so those neg divergences did play out. .

    Does anyone follow SOS (selling on strength) since oct lows SPY has printed huge SOS numbers. Total accumulated Selling on Strength (S.O.S.) numbers has now risen to 8720 billion since oct lows. Historically this is a huge number – similar to what occurred before 2009 crisis.

    we never know when the big boys will want to sell..

    • crazyworld2013 says:

      another interesting tidbit –> each time SPX gets over-extended above it’s 24 moving avg a pullback happens. currently SPX 202 points over extended the avg is 219 pts. the largest is 227 pts, i realize that 202 pts is not as large of a percentage, so maybe SPX will continue higher but IMO not much higher. 2100-2110???

      • blackjak100 says:

        You may be onto something as 2108-2109 is the 1.272 fib ext of most recent decline. This is the first place I will nibble short to try and catch some type of top. Stop at 2119 so very low risk. Just an FYI, the tops at 2019 and 2079 were at 1.272 ext. if this is third wave, it should blow right through 2109.

      • I see the same on my excel spreadsheet and am looking for about a 10% correction-No one is talking about a correction but it’s coming and will begin in a few days, if technically not already. Most everyone is looking for the next upwave. Will require a little patience-maybe we get a double technical top.
        After correction, a good buying opportunity.

    • CW, you make some valid points but a word of caution: the “boat was lopsided” for several years from 2002 to 2007, and you may recall that Greenspan used the descriptive term “irrational exuberance” in 1996 and the markets kept going virtually straight up until 2000 with only a couple significant but short-lived pullbacks (Asian currency crisis and Long Term Capital debacle), and the bulls LOVE it when people are skeptical of future increases, wall of worry, etc. Many people remain unconvinced and that likely means another year or two of gains. Tony’s count rings true to me, am bullish.

      • FRB, we did have a 23% correction in 1998. It was short and ant nasty (LTCM as well as asian contagion back then) and took place sometime between August and October of 1998.

    • lbribiescas says:

      Great points. I watch SOS and it has been large on these last three runs and early. BOW has been large too on the corrections, but overall more selling than buying. But the postponement of the Volker Rule is big IMO. It unleashed liquidity and let the boys play a little longer

    • You’ll have plenty of warnings before the crash starts. Watch Chris ciovaccos videos on YouTube, specifically the ones on 1987, 2007 & 2011.. There would need to be a period of volatility that flattens the moving averages, we are not there yet. Can’t see how everyone keeps putting out bearish calls/counts with technicals this nice? Price is blasting higher too.. 2015 will be a 20%+ year 🙂

  13. xela0 says:

    Is the 91 level on the USD signaling Major a of C or the expected top of C.
    Is the expectation that the top (Primary C of Cycle A?) aligns with a broad market top?

    Happy Holidays to all

    • 16golfer says:

      Thanks for the road map Fiona! Makes sense….1.1618 is Golden.

    • simpleiam says:

      Good Morning and Thank You my Furry Friend!

    • bhupal777 says:

      So Fiona, If I understand it correctly, few weeks back you were looking for broadening top
      (megaphone) and that didn’t play out. Now you are looking for Elliot Wave ending diagonal. Let’s see how it plays out. Top calling consumes lot of positive energy and destroys trading career.
      Thanks Tony, actually I like your 2214 initial target not because I am a bull or bear. Other sectors ETFs like XHB, XLF, KRB etc….does support your analysis and targets.

    • lbribiescas says:

      So helpful. Thank you.

  14. fishonhook says:

    Excellent holidays, thanks for asking Lunker.
    Truth. i was just posting when the first mention of the end of P3 came up. A year and a month ago. Is that so provocative? Though i won’t disagree that the CB have basically made what little science there was behind TA rather suspect.

    Ariez- a little reality between many thanks you posts, adds balance .. no? We are all complex animals and do not read too much from a few posts as to a person’s character. For all we know Lunker is a well-balanced analytical thinker rather than an ankle biter.

    • fotis2 says:

      The market will most probably be even trickier to trade next year the only solution I can see is reducing the amount and size of trades and just making the best of what is in front of us a day at a time.As a day trader Im only making decent hits when I sit on the sidelines for a day or two and only taking a position once im more comfortable with the direction,I also abstain from trading on major news days thats basically spin a coin trade.I know everyone has his or her opinion and systems about how to survive and thrive or go bankrupt in this venture but hey if we were all on the same page none of us would be here.So GL to all and dont forget the stops.

      • alindro75 says:

        Ho fotis
        Mostly agree with you just with the last no . Because I dont use stops ,they are just a 100 % for looser trades . Almost every time the stops will be taken out .
        In case if you can hedge and play both direction of the market you dont have to get out from a bad position ! If your position/direction is wrong you have to play more in the other direction with more contracts ( 40 -60 % ) until you will get out with a smaller profit on all contract when you will close all your positions. …….
        Hope you understand the system and most important I Hope you can hedge your positions and play both side of the market on the samd product indice, forex or what it is ….. but is working better on forex mostly !
        GL and Happy New Year to you all from this amazing site !
        P. S. Tony many thanks for your kindness to share with us you views

    • Fish I did not say you were provocative. i read this board because I enjoy the members and like to see CALDAROS point of view. But I view following OEW like reading your horoscope everyday in the NY Daily News. Can it apply ? Of course it can. It’s it really accurate? Well if it was it would not be in the comic section, Every view is different. Everytime there has been an end for the P3 and a P4 call it has not worked. When you think about its actually funny. It reminds me of Fred Sanford from Sanford and son. “I am coming Elizabeth “

  15. manunidhi21 says:

    Tony !
    just checked WLSH 25 %

  16. JW says:

    IWC, Russell micro cap, continues to lead the charge, which is very good news for the bull


  17. fishonhook says:

    Ever extending P3. Hmmm. For those who have forgotten, this is when the end of P3 was first called


    • torehund says:

      FOH….at that time it was an abc up and With a possible +de it could have been the end of the bull..well it marched on to an undefined larger structure..that tells how important it is to discard a broken pattern quickly and then reorient and look for a new one. Currently, as RUT broke out and Shanghai is going parabolic it is warranted to be generous towards new and more exuberant counts. If Shanghai breaks 3412 a retest of previous top is in the Cards, thats by itself a double from here.

      Tonys count and a larger scale abcde that might be in play now:


    • FISH thats unfair, the fed and central banks have been goosing the market. caldaro knows he is in unchartered waters

    • ariez5 says:

      Fish, the problem is that you are seeking a fortune teller. You keep relying on Tony when you need to be doing your own research to find the signs in the market that lead to a probabilistic trading edge. Tony provides a perspective and is a model of objectivity. He is not, and does not advertise himself to be, all-knowing. Your occasionally humorous, always nervous, and rarely analytical posts lead me to think that you do not accept that fact.

    • lunker1 says:

      fish looking for attention again. bad Holidays for you?

  18. opader says:

    Hello Tony, Thanks for your update. My count is: SC 3, C 1, P 3, Major 5, I 3, Minor 1, Minute 5, Micro 5. I expect Micro 5 / Minute 5 / Minor 1 to peak around SPX 2100 this coming week, then Minor 2 to take SPX back down to 50% level around 2030 where it would find its 50 D-SMA as support. Seasons Greetings and Happy New Year Tony. Again thank you very much for the best and totally objective EW analysis on the web.

    VSG Opader … http://balancetrading.blogspot.com/

  19. JeffMilano says:

    Thanks Tony,
    the high of this cycle that started in 13 oct should be comin on 31 dec. A gradual descent to a low on 15 jan.

    • JeffMilano says:

      The cycle high and low was stated as a comment on 6 november, 2014

      • Thanks Jeff. You said Jan 19 in your Nov 6 post, any reason for the four-day change? Is it exact or +/-? Thx. Would be a great call on your part if it pans out.

      • we’ll never fall down ….years by years…and then centuries…it’s a nightmare

      • JeffMilano says:

        Actually there is a weekend in btwn, but it should be around that time for a cycle low. Then a new cycle will start and we shall see how the new one behaves. After that a 10 days consalidation.

      • JeffMilano says:

        Hello Fin.Rep.Blog,
        I process more than 500 symbols in stocks etf national and international issues. I use programs to load and analyze the data. I had to load up the last two weeks and analyze the data. In this round the cycle ended on dec 15. In which case the market is in a new cycle. I will give out the new project high and the new projected low. Currently the market is in a upward consolidation.
        So again, the cycle from oct. ended on december 15 and the mkt is in new cycle.
        These cycles are intermediate term and they might stretch or contract. I have a formula that monitors the end of a cycle and this one ended on December 15.
        Thank you.

      • Thank you Jeff, very interesting, please keep us updated on your findings and targets.

        It looks like your Oct and Dec cycles were both lows, do you know in advance the direction of the new cycle? Otherwise seems like the value is limited.

      • JeffMilano says:

        No, I do not know in advance, however, since the mkts tend to trend you can identify the trend and you can see where the turn arounds are.

  20. sjc1159 says:

    Hi everyone,
    I’ve done some investigation of the 28-year cycle theory discovered by George Lindsay. I first learned about this on Carl Futia’s blog (http://carlfutia.blogspot.com/2005/05/2003-stock-market-forecast.html).

    The idea is that a 28-year interval exists between one important low to another, and one important high to another. This is significant because 2015 is 28 years from 1987. Give or take a year, I have identified the following previous instances.

    Lows of 1982 & 2010 (or 2011)
    Highs of 1980 & 2007
    Lows of 1974 & 2002
    Highs of 1973 & 2000
    Lows of 1970 & 1998
    Lows of 1962 & 1990
    Highs of 1959-60 & 1987
    Corrections of 1956-57 & 1983-84
    Lows of 1946 & 1974
    Lows of 1942 & 1970
    Lows of 1938 & 1966
    Lows of 1932 & 1960
    Lows of 1921 & 1949

    Most of lows came after drops of at least 20%.

  21. bouraq says:

    Weekend charts:
    $SPX $DJIA $RUT $GBPUSD $AUDUSD $OIL $GOLD $WHEAT $CORN http://www.tradingchannels.co.uk/2014/12/weekend-charts_27.html

    • blackjak100 says:

      Thx Bouraq! Expecting gold to test $1260’s and maybe slightly higher in the coming weeks before a serious breakdown which should take us to $1000. I think people struggling to trade the S&P successfully and consistently using EW ought to look at gold. As the most liquid market in the world, the waves are as clean I’ve seen.

  22. Thanks, Tony! It’s only been a year, but Russell finally pushed out of resistance. Have a nice weekend.
    -OEW Coffee Club Member

  23. gtoptions says:

    Thanks Tony ~ Enjoy the New Year

  24. fionamargaret says:

    Thank you Tony.

    …..eager beaver candid pic of Simple, 16, and me trying to figure out micro moves…

  25. torehund says:

    In regards to the size of wave 1 and 2, one would expect wave 3 to Reach to around 2400 to 2600, if natural wave relationship Dimensions are any reliable guide. I just cant decipher how wave 3 can only fetch up to 2200…

  26. manunidhi21 says:

    Namaste Tony..
    Going back if you recall 1345 was the expected p3 high when you declared march 2009 as a low and it kept on extending..are we in normal times ?

    • tony caldaro says:

      this bull is anything but normal

      • Thanks Tony. I wish you and the followers/ contributors of this blog all the best in 2015.

        My 2 cents is that if this bull is going to extend to 7+ years then we are due for some larger pull backs in the 20 to 25% ranges at some point.

      • tommyboys says:

        Guesstimating where a market “should or shouldn’t” be or head at any given time is not much more than a stimulating hobby. Markets are not predictable. That said calling the current market a 6 or 7 year bull is completely subjective. We had a mini bear in 2011 – maybe a “new bull” began then which would mean we’re only three years in. Further we had a 2 decade bull in the 80s-90s so corrections notwithstanding who is to say we don’t have a bull market right through the mid 2020s or longer? Happy 2015 all 🙂

      • fotis2 says:

        Ditto that Tony its fast turning into a day traders delight .

      • tony caldaro says:

        agree, at some point

      • torehund says:

        Tommy the mini bear that we had in 2011 is the downsloping part of a large X-wave, and can comfortably timewise be deducted from current bull. In that sense this bull isnt that old.

  27. Tony, I beleive the stock market stays open on New Year’s Eve until 4pm.

  28. simpleiam says:

    Thanks Tony! Always informative. I do find that I have to have at least a bit of coffee in me before tackling the numbers… There are Saturdays when it can be overwhelming, but on the whole, EXCELLENT!


  29. Tony what level would we have to drop below to consider any bearish counts? 2010?

  30. Thanks as always Tony. To confirm that I understand correctly, you are expecting a minor pullback but do not expect a Downtrend until SPX 2200 at least, correct?

    Also, any time estimate of when you think we’ll see that SPX 2200 reached? TIA.

  31. fotis2 says:

    Thanks Tony much appreciated .

  32. liborval says:

    HI Tony, if we are in minute 1 of minor 3. How big wave ii would be – 50 point or less? Happy holidays

  33. llerias7 says:

    Thank you, Tony, again for your work on tracking this complex bull. I am following your EWcount closely again.
    Just a doubt: “initial target for this uptrend is the OEW pivot at 2214.” By “this uptrend” you mean minor 3?

Comments are closed.