weekend update


The first full week of 2015 starts off like a roller coaster. The market started the week at SPX 2058. After a gap down opening on Monday the market dropped to SPX 1992 by midday Tuesday. Then it rallied to SPX 2064, helped by two gap up openings, by late Thursday afternoon. Then on Friday it sold off again, hitting SPX 2038 by late morning, then ending the week at 2045. For the week the SPX/DOW were -0.60%, the NDX/NAZ were -0.45%, and the DJ World was -0.80%. Economic reports for the week were generally positive. On the uptick: auto sales, the ADP, consumer credit, wholesale inventories, the MMIS, plus the unemployment rate, weekly jobless claims and the trade deficit all improved. On the downtick: factory orders, ISM services, monthly payrolls and the WLEI. Next week will be highlighted by the FED’s Beige book, the CPI/PPI and Industrial production.

LONG TERM: bull market

Our long term count for this market remains bullish, but the market has yet to extend its long term uptrend into the sixth calendar year. Currently, after December’s all time high, it is already in its sixth year having lasted 68 months. Calendar years, however, have more of a significance in OEW terms. Historically, there have been numerous bull markets lasting 1 to 4 calendar years, three including this one lasting 5 years, one lasting 8 years, and one lasting 13 years. None lasting 6 or 7 years.


We continue to count this long term uptrend as a five primary wave Cycle [1] bull market. Primary waves I and II completed in 2011, and Primary III has been underway since then. Primary I unfolded in five Major waves, with a subdividing Major wave 1 and simple Major waves 3 and 5. Primary III is also unfolding in five Major waves, but Major wave 1 was simple and Major wave 3 has subdivided quite a bit. We have counted four of the Intermediate waves of Major wave 3, with Intermediate wave v is still underway from the SPX 1821 October low. Thus far, Intermediate wave v appears to be subdividing as well. When it does conclude Major 4 should decline about 10%. But Major wave 5 should take the market to new highs again.

MEDIUM TERM: uptrend

After the Intermediate wave iv low at SPX 1821, the market uptrended for about 1.5 months to the all time high of 2079. We labeled that Minor wave 1. A quick 5% downtrend followed into mid-December to SPX 1973: Minor wave 2. Then the market entered another uptrend: Minor wave 3. Thus far this uptrend made a new high at SPX 2094 in late-December, then pulled back nearly 5% into this Tuesday’s low. This is quite unusual for an uptrend, as we have not observed this type of action since the August 2013 to January 2014 uptrend.


Since we have seen this type of activity before in this bull market, we favor a continuation of the uptrend. However, if the SPX drops below 1992 before making new highs then it is possible the recent SPX 1973 low was an A wave, the 2094 high a B wave, and the market is currently in a C wave of a much larger correction. We will deal with that, when and if the situation arises. For now we continue to count this uptrend as Minor wave 3. Medium term support is at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots.


This uptrend got off to a good start as it rallied from SPX 1973 to 2094 in only two weeks. Then we observed a nearly 5% decline to SPX 1992 by Tuesday this week. We have labeled these two waves as Minute i and ii of a five Minute wave Minor 3. The mid-week rally to SPX 2064 looks like a Micro wave 1 of Minute iii, and Friday’s pullback could be all of Micro wave 2 at SPX 2038. Should this be the situation we would expect Micro wave 3 to kick in to the upside once Micro 2 concludes.


Should the market drop below SPX 2030 it is possible a retest of 1992 or lower would follow. Once the market clears SPX 2064 Micro 3 should be well underway. Short term support is at SPX 2030 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum declined after getting extremely overbought on Thursday.


Asian markets were quite mixed on the week for a net loss of 0.3%.

European market were mostly lower for a net loss of 2.9%.

The Commodity equity group were mixed and lost 0.8%.

The DJ World index lost 0.8%.


Bonds continue to uptrend gaining 1.1% on the week.

Crude remains in a prolonged downtrend losing 8.4% on the week.

Gold is also uptrending gaining 2.2% on the week.

The USD remains in a prolonged uptrend gaining 0.8% on the week.


Tuesday: Treasury budget. Wednesday: Retail sales, Export/Import prices, Business inventories and the FED’s beige book. Thursday: weekly Jobless claims, the PPI, and the NY/Philly FED. Friday: Industrial production, the CPI, Consumer sentiment and it is Options expiration.

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


About tony caldaro

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253 Responses to weekend update

  1. torehund says:

    ..biotech may be the place to be in right now.

  2. lunker1 says:

    SPX 60 minute candle bodies holding 2026 today…the upper range of 2019 pivot

  3. alexh110 says:

    Tony, just wondering if you’ve done analysis of the secular cycle prior to 1929?
    It looks to me like the Dow was in a secular bear from 1885-1921 (36 years): it bounces around sideways with lots of overlapping waves and basically goes nowhere.
    Then we get a secular bull from 1921-1929 (8 years).

    Since 1929 the cycles have all been around 18 years: so should we perhaps consider the possibility that the secular cycle changes and mutates with each Supercycle?
    If so the secular bear could have ended in 2009 after only 9 years.

    • tony caldaro says:

      Actually have a secular deflationary bear 1929-1949.
      Would consider the previous secular bull from 1915-1929

      • alexh110 says:

        1915-21 doesn’t look very bullish to me, just lots of sideways chop; but even if we take 1915-29 as a 14 year secular bull, it still leaves the secular cycles from 1885-1929 appearing quite different from those between 1929 and 2000 don’t you think?

      • tony caldaro says:

        True, but markets were in their infantile state then and were quite local.
        Plus every recession was deflationary, and expansion inflationary.
        Things were more commodity driven then.

      • alexh110 says:

        Thanks as always for your insights.
        The reason I asked was that all the “experts” on CNBC keep telling us we’re in a secular bull market from 2009; but none of them explain how the secular cycle could’ve suddenly halved in length from 18 years to 9.
        So I was interested to explore whether the cycle was always the same length in the past; or if it really could’ve changed.

      • tony caldaro says:

        the terms secular and cyclical are often used inter-changeably
        they are not the same
        Cyclical bull/bear markets reflect economic cycles
        Secular bull/bear markets can cover many cyclical cycles.

  4. zvyezda says:

    The apex of this triangle would seem to be around 2031 near the close, unless it then shifts the delaying tactic to working out towards the the apex of the larger triangle near SPX 2044, hopefully after the open tomorrow.

  5. FTSE still on BUY as per my model, SPX and INDU are still BUY at present level. I think Short term bearishness is almost done at SPX 2027. Watch out Apple, likely pull all indices up

  6. H D says:

    The previous W1’s did not retrace before new highs.

    • H D says:

      in fact SPX has alot of similarity to July 2011 HNS when an extention was expected. That W1 failed to make a HH and led to PII after a quick 4-5. I’m no historian but think the alt counts were ignored then too. JMHO 2019 is a big deal.

  7. stephenk1980 says:

    Both the Yen and Netflix close to important points. Will they bounce or go lower? I’m waiting for more clues from these before committing to an SPX trade at the moment.

  8. lunker1 says:

    watching INDU Weekly 13EMA

  9. simpleiam says:

    Tony, thanks for updating the 60-min.

  10. H D says:

    what’s the stat for week following FOMC?

  11. From 2064 I see nested 1, 2’s down. This downtrend is not over

    • chrisk44342 says:

      Could be right matador. The other bearish count would be that it is an impulsive from 2064, and that this is a small A. This would only be possible with another low below 2022

  12. I think I got this wave count figured out. We gonna drop to 2010 than bounce to 2025 than 1970

  13. bhuggs52 says:

    This market right now still hasn’t made up its mind. The waters look too chilly and murky for this wave rider to stick his toe in and take a position either way; still time to wait for a clarification, and that’s from a real North Coast California surfer who regularly goes out into somewhat cold water to ride somewhat large waves. Right now I’ll head for a session in the double-overhead bombs and try my luck on those vertical water walls rather than risk a biscuit on these murk-oid market waters.

  14. elmer510 says:

    Do we have a possible HS-formation at the SPX ?
    In case, target should be just below 1900 somewhere

  15. spindoc73 says:

    In the realm of anecdote, not too many seem to have conviction here based on conditional buy/sells and several appear to have went long based on a recommendation from blogs. There are other reasons, but as a psychological confirmation, I believe we are in the midst of a correction that will last a couple weeks. Lots of up and down to ring out the leveraged shorts, and many opportunities for weak hands (buyers on recommendation) to enter for cyclically dashed hopes of instant wealth. glta

  16. gtoptions says:

    Thanks Tony
    SPX ~ Battle Zone WPP @ 2034

  17. HWB Hi to Lo that would be the Bull/Bear Mason-Dixon line of the day but for Friday’s 31.25. Back above 31.25, and this tunrs into a possible 3/C up.

  18. mjtplayer says:

    Open gap filled from 01/07 at SPX 2,025.90

    Still have an open gap from 01/06 at SPX 2,002.61 though….

    • mjtplayer says:

      Agree, I think we can rally from here, probably into the holiday weekend. Next week the ECB meeting & Greece elections; the Fed meeting the following week. Lots of volatility coming the second half of Jan.

  19. GYN LAB says:

    micro 2 potentially over with A=C… retaking over today’s open should set us in micro 3 of iii!!

  20. Tony,
    I have posted couple of times on the relative comparison of $SPX:$USB. weekly MACD is below the zero line. This itself says a lot about the money movement.I have given 1870 for this month. 1870 is the monthly middle bb.
    Also look at the Weekly $USB chart, 50week is crossing the 200 week ma.
    Also look at the USD JPY The weekly MACD is about giving a sell signal.
    market should sell hard the next two weeks to reach 1870.

  21. llerias7 says:

    Technically in micro 2 but…too much red ink out there for a micro…will it hold 2019 oew pivot?

  22. simpleiam says:

    Holding unless it breaks 1992 low of last week.
    Oh, did I say I might buy something more if I find bargains? I don’t want to be repetitive.

  23. sweinv says:

    Pluto 2/Micro 3/Minute 3/Minor 3

    Looks weak but if looking at DAX (Europe) the pullback can be over.

  24. Go to your $SPX weekly chart and start at the week ending 9/19. Now look forward four weeks INCLUDING that week. Now go to the wek ending 12/26. Look forward 4 weeks INCLUDING that week.

    Now get ready to kiss the 2019 pivot goodbye as we are now boarding for the 1956 pivot.

    Easy peasy.

  25. Just want to remind people that if this is really wave 3 of C (and i think it is) the hourly RSI5 will remain oversold for and extend period and any bounce will be small and short lived.

    • afarsid says:

      Fotis is holding the 2030 line… Just give it up brother 😉

      • fotis2 says:

        Did say i will short if it breaks the low and closed at 2030 thinking about a long but dont want to push my luck.. 🙂

      • afarsid says:

        you’re a good man fotis 🙂
        To Tony and the guys with more tread on their tires than me:
        Is it just me or does this insane volatility not fit with the expectation of a minor 3 of Int v? This looks like a repeat of Oct and Dec with regard to the volatility.. I “feel” like the bigger picture is screaming “I’m running out of juice” (ie something more like a minor 5 of Int V – not that I’ve worked out a count for that but just saying)…

    • don’t you think endind diagonal pattern could be in progress? this could be a “B” on an A-B-C of the ending diagonal,,,so highs cab be retest..

  26. lunker1 says:



    38% 2037
    50% 2029
    62% 2020

    top pivot 2026
    pivot 2019

  27. US stocks most overvalued relative to the rest of the world … ever.
    This is a ramification of capital flows from elsewhere (read: Europe in particular). If you’re not sure look at the USD. As the rest of the world folds money will seek the most liquid (read: largest) market. Escape from the most desperate & predatory governments matters. As I’ve written before PEs in the U.S. won’t matter. This is far from the bottom of the ninth. When the debt hits the fan in Euroville and yields stop declining and bonds prices reverse, and many instances collapse, yet another wave of capital migration will head across the Atlantic as there is nowhere else to go. That should take us to the top of seventh. The last part of the game will the end of the bull market in the US long bond which started in 1981. The critical thing is the monstrous size of these debt markets. A good deal will be lost or even defaulted on but a good deal will still remain.

    • tommyboys says:

      Zero hedge semantics. US markets and economy are “relatively” stronger – by a country mile – than “the rest of the world”. Also safest place to stash value. US dollar just beginning a LT secular bull. This ratio will only get more lopsided in favor of the US over the coming several years.

  28. Hi Tony

    Are there any stocks or sectors you like for 2015 which you think will outperform general markets?

    Thank you

  29. fotis2 says:

    Any more bulls out there? feeling pretty lonesome here.

    • rc1269 says:

      from the look of futures it’s just you and most of the people left in the market.

    • Reading the comments at Tony’s this weekend, I do not at all get the sense that bullishness is hard to find. In fact, what I find notable, though not surprising, is that bullish opinions right now are nearly as common as were bearish opinions during the rally to new ATH’s off the October low.

  30. Thanks Tony. In the end it usually goes as planned with or without the noise.

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