weekend update


New all time highs. The week started at SPX 2055, gapped down to open the week, then hit 2042 late Monday afternoon. That was the low for the week. Tuesday the market gapped up, and then made higher highs for the rest of the week culminating with an all time high at SPX 2097. For the week the SPX/DOW gained 1.55%, the NDX/NAZ gained 3.00%, and the DJ World index gained 1.75%. On the economic front reports were not quite as rosy. On the uptick: wholesale/business inventories. On the downtick: retail sales, export/import prices, the WLEI, plus weekly jobless claims and the budget deficit increased. Next week, after the Monday holiday, we get reports on the NY/Philly FED, Housing and Industrial production.

LONG TERM: bull market

The 2009 Cycle wave [1] bull market continues to unfold as labeled. This five Primary wave bull market has only completed Primary waves I and II. When this occurred in 2011 Primary wave III began, and it has been underway ever since. Primary I divided into five Major waves, with a subdividing Major wave 1 and simple Major waves 3 and 5. Primary III appears to be alternating. It has had a simple Major wave 1, a quite extended and subdividing Major 3, and possibly a subdividing Major wave 5 is now underway.


During Primary I the market displayed somewhat of an oddity in its five Major wave pattern. Major wave 1 was longer than both Major waves 3 through 5 combined. Normally, the first wave of any five wave sequence just does enough to kickoff the sequence. Then after a second wave decline, the third wave is the longest and thrust of the advance. Once this occurs, and after a fourth wave decline, the fifth wave can be any length. Primary wave III is displaying exaggerated but more normal characteristics. Major wave 1 did just enough to kick off Primary III. Then after a Major wave 2 correction, Major wave 3 advanced a near perfect Fibonacci 4.236 relationship to Major 1: SPX 2082 v SPX 2079. Also during the five Intermediate waves, that created Major wave 3, Int. wave v was a near perfect match to Int. wave i: SPX 2084 v SPX 2079. And, to our surprise, we have alternation now between the zigzag of Major 2 and the irregular flat of Major 4. Despite these lofty levels, wave patterns are actually starting to normalize.

MEDIUM TERM: uptrend

After making a new high in early-December the market entered a two month trading range which ended on the first trading day of February. We labeled the early-December SPX 2079 high as Major wave 3. Then the correction to SPX 1973 by mid-December Int. A, the uptrend to SPX 2094 in late-December Int. B, and the downtrend to SPX 1981 in early-February Int. C. This completed an irregular failed flat for Major wave 4. From that low the market has rallied 5.9% in less than two weeks to kick off Major wave 5.


As noted in the previous section: once the third wave is longer than the first, the fifth wave can then be any length. Normally, after an extended third wave, like we observed during Major wave 3. The fifth wave might be equal to the first wave. Should this be the case, the minimum we should expect for Major wave 5 is SPX 2199 (i.e. 1981 + 218). The market closed at its high on Friday: SPX 2097. However, this has not been just any normal market. It has been a market driven by central bank liquidity in an attempt to avoid the deflationary effects of a Saeculum crisis cycle. Or, as most like to call it a deflationary Secular cycle. As a result we are expecting Major wave 5 to advance well beyond the one to one relationship to Major wave 1. However, we are not quite ready to post a potential price/time target until the DOW makes all time new highs. Maybe next weekend. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots.


After the downtrend low at SPX 1981 two weeks ago, we started seeing five wave patterns for the first time since December. We noted the first five wave advance: 2010-1991-2040-2028-2050, and called it a potential uptrend. The market rallied to SPX 2072 that same week, then pulled back to 2055 on Friday. During that advance the market generated a WROC buy signal, also suggesting an uptrend was underway. Then after Monday’s SPX 2041 low the market took off to the upside again in a five wave pattern: 2058-2049-2071-2058-2097. The uptrend was confirmed and new highs were hit on Friday.


Taking a conservative approach this uptrend may be all of Major wave 5, ending Primary III when it ends. Major wave 1 was only one uptrend too. Therefore, one could count the SPX 2072 high as the first wave, the SPX 2042 low as the second wave, and the current advance as part of wave 3. At SPX 2133 this third wave will equal the first wave, and this is close to our next OEW pivot at 2131. At SPX 2189 this third wave would have a 1.618 relationship to the first wave, which is close to our OEW 2198 pivot. Either way, the two pivots look like a good match for the internal structure of this uptrend.

A more aggressive approach would be to suggest this uptrend is only Intermediate wave i of Major 5. We actually tend to favor this approach for reasons we will explain when we present the price/time targets. Short term support is at SPX 2058 and SPX 2049, with resistance at the 2131 and 2198 pivots. Short term momentum ended the week with a potential negative divergence.


The Asian markets were mostly higher on the week for a net gain of 1.2%.

The European markets were all higher gaining 2.3% on the week.

The Commodity equity group soared to gain 5.5% on the week.

The DJ World index gained 1.75% on the week.


Bonds have yet to confirm a downtrend but lost 0.3% on the week.

Crude is trying to confirm an uptrend and gained 0.6% on the week.

Gold remains in a weakening uptrend and lost 0.4% on the week.

The USD maybe rolling over after an eight month uptrend losing 0.6% on the week.


Monday: holiday. Tuesday: the NY FED at 8:30, and the NAHB at 10am. Wednesday: Housing starts, Building permits, the PPI, Industrial production, the FOMC minutes, and a speech from FED governor Powell. Thursday: weekly Jobless claims, the Philly FED, and Leading indicators. Friday: Options expiration. Best to your extended weekend and week!

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


About tony caldaro

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202 Responses to weekend update

  1. hkloon says:

    Goodday everyone… i dont know where all of you are from but my best wishes here happy lunar new year… and a very prosperous year ahead for all…. 🙂

  2. rc1269 says:

    shaping up to be the biggest one month (monthly open to close) point gain since Oct 2011. And that one followed 5 negative months and a 230 point decline (monthly open to close). very impressive

  3. fotis2 says:

    Blast it! stop too tight…

  4. sibyn says:

    RCH DAX Top 10921 Bottom 10826 Handle 10873(done), goal now 10750.
    Fails at 10900.

  5. fishonhook says:

    If you are wondering why there is no corrections at all, are things really that good?

    This guy sums it up well


    • bhuggs52 says:

      Good article, Fish, not only in the technicals, but also in the comparisons to BB. The
      CBs (and the rest of us) are certainly on a major drug run here. Historic what will happen when times comes to dry out.

    • There’s no bubble yet we hear from the fed.
      Deflations been slowed although its not dead.
      All Caldaro’s women and all Caldaro’s men
      are trying to figure out when this bull market will end
      Remember this and remember it well.
      The bears can all scream and the bears can all yell.
      But as long as there is paper and ink at the Fed.
      Janet Yellen will print money until the economy is dead.

    • simpleiam says:

      I don’t know why some think that because many of us are bullish on stocks right now, we don’t know an end to the rise is coming. Of course we know, and as far as picking tops, etc. that’s why you jump in and out with your trading money; keeps a trader from getting caught. In fact, bullish as I am, I think this Bull will end sooner than many others do, and the secular Bear lows and consolidation phases could last longer than most people think. JMO-WWYPFI

      • spindoc73 says:

        Your opinion simpleiam seems to be shared by many. I went to cash in 07′ and have been long from with a few days off the bottom in 09. As of January, now 80% in cash and 10% short. When we have a market that no one believes in, but all are invested, and all believe that they will be nimble enough to escape, it just makes me wonder if those conditions would not increase the likelihood of a historically improbable discontinuity. Add in to the mix that a 3 fold market rise has seen about the same increase in margin debt, and I wonder of those conditions make the improbable slightly more probable. Markets usually turn much slower than we can imagine, but if one was ever primed to come unglued on a dime, this one looks like a worthy candidate.

        • simpleiam says:

          Agree 73. I’ve still got some LT longs from the start of this Bull, but all else is cash or other assets. A trader/investor truly has to continually take profits, buy/sell at this point to keep from getting nabbed.

          Have a great evening All!

  6. live elliott wave radio trading show is back! http://wavegenius.com

  7. chrisk44342 says:

    Uggh. Too many ads on your blog Tony. I felt posting the video every day would help people out but I wonder if it’s encouraging people to spam your blog.

  8. otcbully1 says:

    Staying ahead of your competition gives you the edge in the real world as well as in the world of stock trading. For achieving unheralded success in the stock market, take a look at these amazing strategies and tips at otcbully.com

  9. simpleiam says:

    For those wanting to learn about credit spreads, here’s some of the best free tutorials I’ve found.

    Too late for me to go to sleep now, so might as well go to work early. Ciao!

  10. I think 3 things are the case here.

    1) Crude / energy is nearing a bottom here => http://bit.ly/1fMcakI

    2) There is much BS, and manipulation about teh GREECE Crisis,

    3) They will make the GREECE crisis seem bad, and send the market down a BIT so that Smart money who missed this nice rally in FEBRUARY can get back in and Make Big money in the coming months.

    Time will tell.

  11. buddyglove says:

    Lol…Draghi is like the Godfather, he probably put a horses head in Greek fin mins bed, and made an offer he couldn’t refuse.

  12. Kudos to Germany for standing firm.

    If Greece is claiming “give us a chance”, then instead of pleading, it can very well get out EURO and go on Drachma. Idiots in Greece were holding rallies saying “give us a chance..”. No one is stopping anyone. Tsiparas can pack bags and go home. EURO does not need them.

    Once Greece gets out, Germany can sell Greek debt (held by Germany) to ECB under new QE program (as such based on size of economy/contribution, Germany can claim about 30% of QE monies). Let Greece then work hard with its Drachma and prove itself.

  13. stephenk1980 says:

    Fwiw I’m pretty bearish right now unless we start adding a decent number of handles fairly shortly. I’m not going to quantify the exact number or time, just in case skynet is listening, but CN could still be right. Well… I’m expecting P4 rather than a bear market, but you never know!

    I’m not shorting just yet, but may decide to shortly unless we start shooting up.

  14. “Oil will 100% guaranteed drop in a full C wave to $15-$20 a barrell.” http://wavegenius.com

    • rc1269 says:

      100% guaranteed or my money back?

      • drwarmington says:

        Rabbit gave anyone who followed him a horrendous 100% loss Oct/Nov. But he made 72% last year. Where are the posts for those beautiful gains? So goes the world of bloggers, who never lose. BE CAREFUL WHO YOU LISTEN TO…..

        • Page says:

          Agree. Gartman and Rabbit both flip-floppers. Today, Gartman is gone bullish again so you know the drill.

        • simpleiam says:

          dr. much depends upon how much you lose on a trade. close it quick and you do much better, but keep buying down (or up), bad strategy.

          Gartman indicator bullish? Uh oh, time for a small short here.

      • buddyglove says:

        RC..yes it’s true… the “Wave genius” is back, and now with Tyler Durden gravitar…hmm wasn’t Tyler Durden a fictitious figment of a mad-mans insane imagination… ?

    • fotis2 says:

      Am long to 60 techs look good

      • fotis2 says:

        Also a bit vague so here goes:Crude: D.MVT crossed over positive on 3rd of Feb 1st time since the big drop. ADX dipped bellow 30 on the 13th signalling a possible trend reversal on the daily has been trading above monthly pivot 12 days formed an ascending triangle with target 6485 first break 58.88.In all bullish outlook of course it can hit top part of triangle and say guess what?Actually I am a triple top so now am going back to test the lows. GL and eyes wide open. 🙂

  15. robnaardin says:

    Having fun with psar… …THANKS Jedi

    NYAD cumulative: http://scharts.co/1AHc4tD

    NAAD cumulative: http://scharts.co/1AHcno8

    Nymo: http://scharts.co/1AHcC2A

    Namo: http://scharts.co/1AHcOyN

    Nysi: http://scharts.co/1zGJeE3

    Nasi: http://scharts.co/1AHddRO

  16. blackjak100 says:

    TC, you need to develop a WROC sell signal. I’m thinking this uptrend could end sooner than most think. I will be watching gold for clues as I stated yesterday.

  17. sloop says:

    Purplember I hope you are rather contacting a psychiatrist than a Rabbit for investment advice …

    • purplember says:

      lol I don’t send money to anyone. either use sp500 index or my own trades. I’m open to listening to everyone’s thoughts / advice but take it with grain of salt until one develops credibility.

  18. tommyboys says:

    RUT was stymied right at that tops line resistance near 1223. If we can bust it higher for breakout it could move initially rapidly then pullback to retest the line. If any test is successful we’d then likely begin a sustainable new rally leg. Interesting the bullish P&F target now moved to 1480… Jmho 🙂


    • esvxm says:

      There is a likely hood for all the indices at this moment in time to pull back to that triangle trend line. Might be a good point to enter with low risk or add to the existing longs (given one has been long 🙂 )

      • nardobeme says:

        I agree with you esvxm. Can I ask your spx pullback triangle trend line target? I’m sugesting the 1950 area. Thanks.

  19. J.Wenger says:

    I have to admit, I was skeptical of seeing new highs, but there they are. Keep that objectiveness coming!

Comments are closed.