weekend update


The week started off at SPX 2110. Then after dipping to SPX 2103 Monday morning the market rallied to new highs at 2120 by Wednesday. After that it spent the next two days within that range. For the week the SPX/DOW were -0.1%, the NDX/NAZ were mixed, and the DJ World index was +0.3%. On the economic front negative reports continued to outpace positive ones. On the uptick: Case-Shiller, durable goods, the FHFA, consumer sentiment, and pending homes sales. On the downtick: existing home sales, consumer confidence, the CPI, the Chicago PMI, Q2 GDP, the WLEI and weekly jobless claims rose. Next week’s reports are highlighted by monthly Payrolls, the FED’s beige book and the PCE.

LONG TERM: bull market

The five primary wave Cycle [1] bull market from March 2009 continues. Primary waves I and II completed in 2011, and Primary wave III has been underway since then. During the entire 130 year recorded history of the US stock market there has only been five bull markets that have lasted five calendar years or more: 1921-1929, 1932-1937, 1987-2000, 2002-2007 and 2009-2015 so far. Of these five, three have been the last three bull markets and the current one is the third longest in history. During each of these five bull markets each of the three rising waves unfolded in 1, 2, 3, 5 or 8 years. These are all Fibonacci numbers. The longest one for example had rising waves of 3, 8 and 2 years. As a result of this analysis, and the new highs posted this year, we are expecting Primary III to top around Q1/Q2 of 2016. When applying several mathematical relations we arrived, as posted last week, with a target of SPX 2530-2630 for Primary III. Then after a steep Primary IV correction we are expecting the bull market to top in 2017, completing an eight year long term uptrend. Fundamentally, the ECBs EQE, scheduled to start in March, supports this scenario.


We have labeled Primary III with Major waves 1 and 2 in late 2011, then Major waves 3 and 4 in late-2014 and early-2015. The current uptrend, which started in early -February, should be the beginning of Major wave 5. Since we are not expecting Major wave 5 to complete until next year, we are labeling this uptrend as Intermediate wave i. After it concludes we still should have at least four more trends, Intermediate waves ii thru v, before Major wave 5 completes. Since this uptrend is only one month old, and has not reached an overbought condition on the weekly RSI, we are expecting it continue higher.

MEDIUM TERM: uptrend

After a somewhat complex Major wave 4, Major wave 5 began on the first trading day of February. From the downtrend low of SPX 1981 the market has risen about 7% during this month. Currently we see five waves up from that low, with each rising wave shorter than the previous wave: 2072-2042-2102-2085-2120. This is a bit unusual for a potential completed wave pattern, since the third wave is usually the longest. However, it is acceptable since the fifth wave is the shortest wave.


The easiest way to count this pattern is either: 1. a completed uptrend, or 2. a completed wave 1 of the uptrend. In both of these cases the SPX would have to drop below 2085 to consider either of these two counts valid. Since we are expecting the uptrend to continue higher, #2 would then be the best option. Another way to count this pattern would be a series of subdividing waves. More on this below. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots.


If we were to consider this uptrend currently in a series of subdividing waves, then the easiest count would be a 1-2, i-ii, 1-2. But this seems a bit stretched since this uptrend has already risen about 140 points from its low. The count we do prefer is the one posted on the chart below. This suggests Minor waves 1 and 2 completed at SPX 2072 and 2042. Then Minor wave 3 has subdivided into four Minute waves thus far: 2102-2085-2120-2104. With this count, and the somewhat lethargic market action lately, we would expect Minor 3 to top around the OEW 2131 pivot. This count also offers several interesting wave/price relationships.


With Minute i 60 points, (2042-2102), and Minute iii only 35 points, (2085-2120), the maximum Minute v could reach is also 35 points, (2104-2139). Wave five can not be longer than wave three, when wave three is shorter than wave one. Should it exceed SPX 2139 then the triple subdivision noted above would be in play. Should it end around the 2131 pivot then another wave/price relationship comes into play. Minor wave 1 rose 91 points (1981-2072). In order for Minor 3 to equal, or better, Minor 1 it has to reach at least SPX 2133, (2042-2033 or 91 points). Should it reach SPX 2133 or better, then Minor 5 can be any length. If not, Minor 5 will be limited to the length of Minor 3 or less. Should it be less this uptrend will not make it to the OEW 2198 pivot. If more, then the 2198 pivot an even higher is obtainable before any sizeable correction.

While this all may seem quite complicated we will try to summarize with some defined levels. If the SPX drops below 2085 we will have five waves up from the 1981 low, suggesting either the uptrend completed, or more likely, only the first wave up of the uptrend completed. If/when the SPX rises above 2120 then Minor wave 3 continues. The rest we will deal with on a day to day basis as this market unfolds. Short term support is at SPX 2104 and the 2085 pivot, with resistance at SPX 2120 and the 2131 pivot. Short term momentum ended the week oversold.


The Asian markets were mostly higher on the week for a net gain of 0.8%.

The European markets were all higher for a net gain of 2.3%.

The Commodity equity group were mixed for a net gain of 0.1%.

The DJ World index continues to uptrend and gained 0.3%.


Bonds are downtrending but gained 0.8% on the week.

Crude is uptrending but lost 2.0% on the week.

Gold is downtrending and lost 0.8% on the week.

USD continues to uptrend and gained 1.0% on the week.


Monday: Personal income/spending and PCE prices at 8:30, then ISM manufacturing and Construction spending at 10am. Tuesday: Auto sales. Wednesday: the ADP, ISM services and the FED’s Beige book. Thursday: weekly Jobless claims and Factory orders. Friday: nonfarm Payrolls, the Trade deficit and Consumer credit.

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


About tony caldaro

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120 Responses to weekend update

  1. bhuggs52 says:

    SPX looked impulsive on its open, then the zig-zag correction, and with the near-term uptrend resuming and going beyond the morning top, I’m in long UPRO, 2% stop, somewhat confident we’re on our way to a new ATH and the 2131 pivot area. I’m still only 10% in from my funds, while I learn more about these short-term plays with stops. Best of luck to all.

  2. tommyboys says:

    …afternoon bears

    • Most bears have capitulated and jumped off of bridges by now. When all the bears are gone, then I think we all know what happens.

      • 7dayyss says:

        Bears aren’t idiots. Why do you think they buy and just hold? They scalp and swing trade just like bulls! At least the ones that know what there doing, not always trying to pick the top!

  3. torehund says:

    X-wave day so far, but the real fun could begin soon 🙂

  4. gtoptions says:

    Thanks Tony
    Don’t cross Putin, Don’t fight the FED and Don’t go against Tony’s count. 😉
    SPY ~ WPP @ 211.13 ~ Testing WR1 @ 211.80 ~ WR2 @ 212.21
    GL All

  5. COMPQ touched 5000 … been a while.

  6. fishonhook says:

    Well I guess Shirhas’s ‘chatter’ to get out of the market Friday as something would happen over the week-end, didn’t add up to anything. And I thought everything posted on the internet was 100% reliable.

    Looks like breakpointtrade and Daneric have now adopted Tony’s count.

    • fotis2 says:

      Fish more like 0.001% as far as internet reliability goes your take is as good as anyone’s out there…

    • chrisk44342 says:

      As if predicting something was likely to produce a reliable result? There is a difference between projection and prediction.

      • Lee X says:

        Execution is where the $ is made at the end of the day + I hear posting ideas/ predictions and trades on the internet is very hard work so screw that .

  7. If Primary III in the DAX were to equal Primary I x 1.618 the target would be 11456. Interestingly the DAX made a new ATH early in the European session today at 11455. Is this significant? Don’t really know. Just keeping my eye on it at the moment.

  8. jeffbalin says:

    Unless we take off pretty good in the next 2-3 days, I believe there is a good chance that we are now correcting the move from 1980 to 2120. Among other things the pathetic daily macd is a warning that the current weakness is not just a little blip. We’ll see what happens.

  9. soulsurfer says:

    Thanks Tony!

    In trying to keep things simple, a look at the monthly candle charts on all indices shows a bullish engulfing candle. And, after months of having found support at the 2007-high level, the NYA is getting ready to break out, that’s bullish IMHO:


  10. fotis2 says:

    $/yen am still waiting for a 3rd test around 118.00 support for a long and Light crude am still long support 48.00 holding.Overall view for the day I’ll let the chart choose a trade.Whole of last week SP pretty much rangebound not giving anything either way, still consolidating?GL to everyone and lets make some money..

  11. jeffbalin says:

    Thank you very much Tony for the weekend update, very very helpful. And, thank you for bringing the word ‘namaste’ to our consciousness here.

  12. sibyn says:

    My roadmap for Monday is gap down 2095 then 2104,1 then 2080,6, we’ll see.

    • sibyn says:

      According to my calculations DAX has hit the ceiling.
      Big CH goal from bottom 2014-10-16 >11446.

  13. Mr.C do you have an opinion on when the majority of the S&P gains will take place?(this year or next).A steady gain or more of a whipsaw?Thank you.

  14. fotis2 says:

    Any takes on the latest from Austria? Sudden like like a plugin of 7.6 bil euro required to fix a hole in Hypo Alpe Adria.Bears must be licking their chops..

  15. Tony, you are correct that the transportation industry impact to GDP had lost some luster in decades past; nevertheless, there is no way that the Transports have lost it’s overall economic barometer role domestically nor globally. As a matter of fact the transport industry impact on GDP has been back on the rise for nearly the past decade, particularly the air freight industry which has shown the strongest growth in the transports group.

    According to BTS, looking ahead from 2002, “the nation’s freight tonnage is projected to increase nearly 70 percent by 2020 (USDOT FHWA 2003). General cargo tonnage is projected to more than double, and some gateways may see a tripling in freight volumes between 1998 and 2020. As the demand for freight transportation grows, so will its overall contribution to the nation’s economy.” The transports rising GDP contribution to the nation’s economy explains why the TRANS have outperformed all the indices.

    Based on my research thus far, IMO, the BTS estimates appear to have been conservative. As the US continues it’s revitalization of it’s manufacturing industry and pushes forward to become a net exporter in the oil and gas industry and as the consumer continues to favor “internet order shipments,” This industry has found it’s “New Age” in the global economy. Mr. Buffett saw all this and made this big bet on the US economy by buying out BNI, brilliant man Mr. Buffett is.

    Some people might be wondering why the TRANS added Avis (ticker CAR) to it’s indice, IMO, it was a bold move but the right move.

  16. mh says:

    Don’t look at the past, get a look into the future! Where will S&P 500 close next friday? Wonderful weekly forecast is ready at https://marketmindview.wordpress.com/2015/03/01/spx-weekly-forecast-is-out-4/

  17. bhuggs52 says:

    Guidance #3 from Master Caldaro on how to use the OEW Blog:
    “All personal insults to anyone, or anyone’s approach to the markets, will not be tolerated.”
    It looked to me like they were out gigging the rabbit again last night, a fond habit for some. Thanks much Tony for the guidance attached to the WU. Meanwhile, I’m with those anticipating a bit more weakness to open the week, then a nice setup for another long entry. Best to all–NAMASTE as they say.

  18. simpleiam says:

    Much thanks Tony! Just now getting to sit down and read your WU. Not spending time in front of the screen when work day is done. GL to All. That being said…


  19. buddyglove says:

    Thanks Tony and team for update, and for useful coverage of other global mkts/asset classes.
    Think we will see some early weakness next week of the sideways/down variety(not shorting), which should give us another nice long set-up.
    Meanwhile Golds bullish structure has improved even more since the trading set-up @Spot/1193, and I am still expecting a multi-month rally. (Invested in Physical and positioned long here).
    Aimho and Good health, wealth and happiness to all.

    • mike7x says:

      It looks like gold could rally to ~$1280 and pause or pull back. A break above $1300 could take it much higher. The miners should also participate in any rally.

    • torehund says:

      Buddy looks like the metals Will be ran independently and maybe sequentially, the most noticeable is Palladium, and the small caps in that sector are about to go ballistically Wild, as did the small goldminers to a somewhat lesser degree just a while ago. Cobalt, rare earth in general and also the trusted cupper may do well. I have a small position in Atna resources and if it goes big thats a win, or if it goes lower Intermediate term testing the lows, I Will just buy more shuffeling funds into it. Metals in general are doing their first spirited moves…

  20. simpleiam says:


  21. ko68 says:

    Thanks again Tony!
    What downside would an “uptrend completed sceanario” suggest?
    38,2 – 50% fib retracement of 1981 – 2119…or ?

  22. purplember says:

    tony, if we get to 2500+, i’m guessing the fall will be a blood bath? 50 – 62% retrace ?

  23. rabbittrader1 says:

    I have only two comments tonight, NUMBER ONE, I would suggest people STOP using the word ” NAMASTE” We are NOT from INDIA . This is putting (TOO MANY TIMES) a Foreign INDIAN word into this site. WHY?? We are in AMERICA let us speak in American English. NUMBER TWO. I am optimistic about this country ,having served as a Navy Carrier Pilot in the Korean and Vietnam time period GAP UP OPENING MONDAY, on SPX. R.

    • tony caldaro says:

      Do you have an english word to define this? Now you know why it is used.

    • robnaardin says:

      NUMBER ONE, I’m Canadian so I take a dump on the 1840 year old ego with an inaccurate conceptual map of reality within you. NUMBER TWO, anyone with 2 brain cells who served as a Navy Carrier Pilot in the Korean and Vietnam time period should be able to figure out that that the pentagon has the perfect strategy to expend an infinite amount of resources to achieve nothing.

      Someone get this idiot off the stage…

      • rabbittrader1 says:


      • simpleiam says:

        rob, he reminds me of the guy who walks across the stage carrying a tree at the exact time an accomplished opera singer is in the middle of delivering a beautiful aria. He has the need to be noticed, no matter the circumstances or situation.

      • uncle10 says:

        Rob, the infinite amount of resources that is spent by the defense dept. does achieve something. More wars, death, and a less safe world…. and a few very rich people.

    • simpleiam says:

      rabbit, your fantasy life rules (your life).

      There’s one for everybody above…

    • joecthetruthteller says:

      Agree Rabbit – we are not from India!!

    • Hey Rabbit,
      With that “let’s stay with American logic” you really should have kept all the bombing to within the US from all the fancy bombers. We were looking to spread the good “American English” ? 🙂

      Now this is part humorous and part serious and I won’t say which is which. It is too late to go back and unfly. 🙂 Let’s not debate this. I won’t.

      Namaste is possibly one of the few words that has the potential to bring more peace than any firebomb. Find me a word in “American English” which has a similar depth.


  24. stormchaser80 says:


    You may not believe in Hindenburg Omens, but how about Dow Theory? Industrials have made 2 new highs since the Transports made their last high in late Nov 2014. Ironically, this is when I started getting the Hindenburg Omen signals. I wouldn’t rule out one more high in 2015, but we are making a major market top.


    • tony caldaro says:

      Not sure the Transports play as big a role as they did in decades past

      • I still think the Transports are important, but they have long since become much more volatile than the Industrials, and they are probably needing to consolidate longer than the Industrials because they have had such a strong rally. When the Transports do resume their uptrend, they will rise much faster than the Industrials and thereby quickly catch up and post new joint highs. If this fails to happen, I think it would be a cause for concern.

      • stormchaser80 says:

        So DOW theory is no longer valid? Interesting position.

    • Hindenburg Omens, Dow Theory, January effects don t matter anymore because the Fed and the QE crazed countries are buying equities nonstop.This may be the latest way to make a bubble and it may well be the last great bull market of our lifetimes…totally manipulated by central banks.When and if this crashes will be a time of panic, so enjoy it while it lasts.

  25. GYN LAB says:

    Good evening all!
    Mr T Thanks again for the insightful analysis as always. Given the strength of a number of indices especially the NDX, even if the Minute iv violates Minute i by a few points (around 2100) we could keep this count valid as an LD?

    • bhuggs52 says:

      Thanks, JT. A very reasoned rant, backed by solid stats and analysis. I wish instead of the Fed printing and pouring money into the financial markets, there were an honest push for investment in Main Street, in fundamental job training, or egads, more monies put into higher education. Meanwhile, Scott Walker up in Wisconsin appears inclined to defund his state university system. So who is on first?

    • ashram says:

      “This is mis-governance on a colossal scale.”

      As an alumnus of the Reagan administration, Stockman fails to understand that the federal government now exists exclusively to benefit the oligarchs who own America’s politicians and journalists. Wages have fallen for decades as the ruling bipartisan elite have redistributed wealth from the middle class to the rich. Bush I and Clinton and Bush II and Obama have served the same masters, which explains their identical policies on Fed appointments/trade agreements/illegal immigration. On the multi-trillion dollar issues, the American people have zero influence over their ostensible elected representatives. Rhetoric notwithstanding, notice any difference whatsoever on the budget/Obamacare/amnesty between the Reid Senate and the McConnell Senate? America is afflicted by one party rule, and it is the multinational corporate party.

      Mis-governance? Hardly. Given that the singular goal of the American government is to transfer wealth upwards, it is doing a most effective job. And when the inevitable Day Of Reckoning arrives and the house of cards comes tumbling down, rest assured that it will be the average American citizen who is coerced to foot the bill.

      • Ashram: Excellent post. My sentiments exactly. However, your attacks on CN were too brutal. Your criticism could have been strictly factual-based and not personal. You used no self-restraint.

      • joecthetruthteller says:

        “” Day Of Reckoning arrives and the house of cards comes tumbling down, rest assured that it will be the average American citizen who is coerced to foot the bill.””

        As IF he/she is not doing so already!!

  26. bhupal777 says:

    Thanks Tony.
    After giving rosy outlook if a stock doesn’t go up and in fact it gives up all the day’s gains then it will be axed from my portfolio. I am out of SPLK even before my stop got hit.

    • bhupal777 says:

      Also sold my EDC before stop got hit. Because of the rate cut by China CB, I have a feeling that EDC might get a good lift on Monday. Friday I broke my trading rules and sold SPLK and EDC. Time to slowdown or not to trade at all for next couple of weeks to reduce drawdowns. Good Luck all.

  27. mike7x says:

    Thanks Tony. Good not to hold this bull by the horns. Just let it go… 😉

  28. hooloo1957 says:

    Hey tony, how is it that the intermediate 4 major 3 correction in oct was 10% and the recent major 4 correction was about 5%?? it doesn’t make any sense. Somebody must have asked you this already. Thank you

  29. blackjak100 says:

    Thx TC! I’d be shocked if major 5 lasts all year simply because I think the market will start pricing in a rate hike as soon as March. Still think a P4 correction is on the horizon

  30. lunker1 says:

    Applying the 60 minute count to the Dow there is a iv into i violation so perhaps the first wave of the uptrend is complete.

  31. fotis2 says:

    Listen to this one:Last night on Greek news broadcast ‘We know you have undeclared cash hidden and I quote ‘In your fridges,mattresses and safety deposit boxes’ dont worry bring it to your closest Bank and for a small fee we’ll legalise for you.’ Time to hit the road methinks.

  32. bob623 says:

    Thanks, Tony, for another excellent update on the indices! We really appreciate your dedicated efforts to keep up informed of the current market direction!

  33. pooch77 says:

    SHANGHAI — With its growth engine slowing, China said on Saturday that it was reducing the nation’s benchmark interest rates for the second time in three months.

    In an announcement on its website, China’s central bank said that, effective Sunday, the one-year bank lending rate would drop 0.25 percentage point to 5.35 percent and that deposit rates would also be reduced by a quarter percentage point.

  34. torehund says:


    Thanks Tony.
    I still have a feel that ” just maybe” primary 3 has not started yet, here illustrated by the Dax, inverted gap fill and just 2 Waves up mostly completed. If this holds true, money in the bank is up for a RUN of a Lifetime.

    • torehund says:

      The more mony that shifts from banks to the matress or into Stocks and Stuff, the less money the banks Will have to lend out. That process eventually leads to money being more expensive to lend and therefore eventually higher interest rates, but we Arent there yet.

  35. Morning Tony. If I understand correctly, your preferred count for the SPX has minor wave 3 of Intermediate wave i topping between 2133 and 2139.

  36. TommyB says:

    Good weekend read Tony!
    If things go according to your foresight, how low do you think Primary IV will go?

  37. manunidhi21 says:

    Like sipping a honey lemon ginseng green tea in d morning 🙂

  38. bouraq says:

    Weekend charts:

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