weekend update


The market started the week at SPX 2108. After an opening rally on Monday, the market hit SPX 2115 before 10am. Then after the first half hour of trading the market was essentially down for the rest of the week. For the week the SPX/DOW lost 2.25%, the NDX/NAZ lost 2.75%, and the DJ World index lost 1.8%. On the economic front reports came in nearly all to the upside, for the first time in weeks/months. On the uptick: existing/new home sales, the CPI, FHFA housing prices, consumer sentiment, the WLEI and weekly jobless claims improved. On the downtick: durable goods orders. Q4 GDP came in unchanged at +2.2%, and registered 2.4% growth for 2014, compared to growth of 2.2% in 2013 and 2.3% in 2012. Next week’s busy economic calendar will be highlighted by Personal income/spending, the PCE and non-farm Payrolls.

LONG TERM: bull market

We continue to label this six year bull market as Cycle wave [1] of Super cycle wave 3 from the GSC low in 1932. As a refresher. A GSC bull market lasts over 200 years, consisting of five Super cycle waves: three rising for about 75 years each, with two intervening declining waves that correct the market over 50%. Super cycle 1 of this GSC ended in 2007, and Super cycle 2 ended with the DOW 54% decline in 2009. Rising Super cycle waves consist of five Cycle waves. In example, Super cycle wave 1 consisted of Cycle wave 1: 1932-1937, Cycle wave 2: 1937-1942, Cycle wave 3: 1942-1973, Cycle wave 4: 1973-1974, and Cycle wave 5: 1974-2007.


Rising Cycle waves unfold in five Primary waves. Our current Cycle wave [1] completed Primary waves I and II in 2011, and Primary wave III has been underway since that low. The rising Primary waves unfold in five Major waves. During Primary III: Major waves 1 and 2 completed in late 2011, Major waves 3 and 4 completed in late 2014 to early 2015, and Major wave 5 is currently underway. When Major wave 5 concludes it will end Primary III, and then the market should experience its largest correction since 2011 for Primary IV. After that concludes Primary V should then take the market to all time new highs to complete Cycle wave [1]. Thus far, we are expecting Primary waves III and IV to occur next year, in 2016, and Primary V to top in 2017. Our target range for Primary III is posted on the SPX weekly chart above.

MEDIUM TERM: downtrend probability increasing

There is a saying in technical circles that goes something like this; “Put 10 EW technicians in a room and they will arrive at 10 different counts.” For the most part this is likely true, since most EW technicians do not know OEW: how to quantify waves. What is also true is that at certain junctures, during bull/bear markets, even the OEW group can arrive at several different counts. Especially when markets goes sideways for an extended period of time. This market has been in a four month trading range, SPX 1970 – 2120, since November.

Since our goal is to remain objective in any market environment, we offer several counts, with our comments, so that you may pick and choose which one(s) best fit what you are seeing the market. We offer five counts in total, since these are the ones floating around the blogosphere. But will use just two charts to illustrate and discuss them, since many of the previous waves are as already labeled.


At the recent SPX 2120 there are three possible wave labels: Minor 1, Intermediate I and Primary III. The reason for this is that from the early February Major 4 low the uptrend to new highs could be/have been either part of a subdividing Intermediate wave i, all of Intermediate wave i, or all of Major wave 5. While we have calculated that Major wave 5 will likely subdivide and extend into the 2016 targets posted on the weekly chart. There are no guarantees, after this bull market has already tripled in value since 2009. For now, we continue to give the count posted on the SPX daily/hourly charts the highest probability: Minor wave 1, of Intermediate wave 1, of Major wave 5 completed at SPX 2120. Unless one, or both, of the following parameters are triggered by the market. First, if the current decline confirms a downtrend we will update the SPX 2120 high to an Intermediate wave i label. Second, if the then downtrend continues and breaks through the OEW 1973 pivot range we will update the SPX 2120 high to a Primary III label.


The DOW daily chart displays a slightly different count with a Major wave 4 low in October, rather than February. Some seem to prefer this scenario due to the depth of the October decline. For now, we continue to give this count an overall lesser probability than the SPX count. But are tracking it with Intermediate waves i and ii already completed, and Minor wave 1 of Intermediate wave iii completed at the recent 18,289 high. An alternate to this count would suggest an ongoing diagonal triangle Major wave 5 underway, as noted by the blue lines. This alternate would suggest an Int. A high at 18,103, an Int. B low at 17,038, and an Int. wave C high at 18,289. Int. wave D would be underway now, to be followed by an Int. wave E, at/near new highs, to complete the Major wave 5 diagonal. The two parameters here are: (1) the DOW needs to confirm a downtrend to increase the probability of the diagonal pattern, and (2) the then downtrend needs to remain above 17,200 to avoid turning the rising wedge of a diagonal into a more bullish rising channel.

Since we are dealing with probabilities for future market activity, based upon past quantified wave patterns, technical indicators, and fundamental economic indicators. We give these five patterns these probabilities: SPX Minor 2 underway 40%, SPX Intermediate ii underway 30%, the three other patterns 10% each. Medium term support is at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots.


We had been tracking the rally from the mid-March SPX 2040 low as the beginning of Minor wave 3. We had a i-ii, 1-2-3 labeled on the hourly chart: 2066-2041-2081-2061-2115. After Monday’s early high at SPX 2115 it started to pullback. By early Wednesday the market had already had its largest pullback since the rally began. Then when the SPX dropped below 2081 we knew the entire rally was corrective. As a result we updated the hourly chart with a Minute A at SPX 2040, a Minute B at SPX 2115, and a Minute C underway.


The market continued to decline on Thursday hitting SPX 2046. There were five small degree waves during the decline: 2099-2108-2049-2059-2046. Then the market rallied to SPX 2067, in what looks like a potential ‘b’ wave. The market then declined to SPX 2053, and rallied to 2063 on Friday. Thus far these last waves look like the beginning of a ‘c’ wave down. Should the market continue lower a complex Minor 2 flat could form at SPX 2040, or ‘c’ will = ‘a’ at SPX 2035. Anything lower, i.e. the 2019 pivot, and it will look like a complex zigzag. Until the market starts to impulse higher we have to think the short term trend is down. Short term support is at SPX 2035/2040 and the 2019 pivot, with resistance at the 2070 and 2085 pivots. Short term momentum ended the week around neutral.


Asian markets were mixed on the week for a net loss of 0.5%.

European markets were mostly lower on the week for a net loss of 0.8%.

The Commodity equity group were all lower for a loss of 1.7%.

The DJ World index is still in an uptrend but lost 1.7% on the week.


Bonds appear to be uptrending and gained 0.2% on the week.

Crude appears to be uptrending and gained 5.2% on the week.

Gold also appears to be uptrending and gained 1.5% on the week.

The USD appears to be downtrending and lost 0.7% on the week.


Monday: Personal income/spending and PCE prices at 8:30, then Pending home sales at 10am, and a speech from FED vice chair Fischer at 7:15 pm. Tuesday: Case-Shiller, the Chicago PMI and Consumer confidence. Wednesday: the ADP index, ISM manufacturing, Construction spending, and Auto sales. Thursday: a speech from FED chair Yellen at 8:40, weekly Jobless claims, the Trade deficit, Factory orders, then a speech from FED governor Brainard at 3:45pm. Friday: Payrolls (est. +254k), and the Unemployment rate (est. 5.5%). Best to your weekend and week!

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


About tony caldaro

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191 Responses to weekend update

  1. mjtplayer says:

    SPX 2,088 – we’re here

    c=1.618 of a off the 2,045 low = 2,088
    .618 retrace of the move down from 2,114 = 2,088

    A move above here will shift the odds towards the bulls, especially if 2,091/2 is broken to the upside (2/3 retrace of the entire move down from 2,114).

  2. llerias7 says:

    Tony, shanghai index broke upwards the rectangle in your chart since 2009! Closed at 3700…
    What next? Probably a rise to 4000´s?

  3. fotis2 says:

    From 2044.90 so far count 3 waves up with w3 very close to 161.8% of w1 at this level.

  4. johnnymagicmoney says:

    Tony………….based upon today’s move is the downturn over or what level do we need to rise over on the SP500 to confirm that? thanks homey

  5. Rodneysussman says:


    Sent from my iPad


  6. torehund says:

    …gap and Go on the Rut.

  7. ashram says:

    The SPX 57.4 week cycle continues to hold, the Daily MACD Histogram has turned higher, Daily RSI (14) is back above 50, and there are widespread predictions of an earnings-related downturn in April.


  8. fishonhook says:

    Even though this is my forth post , it maybe my close to my last so give me some rope

    “Fish, what methodology works for you, is the answer to your questions. GL”

    The truth is. No system really works. Lets face it there is literally trillions of big money looking for an edge. HFT is one such edge and is basically a legal way of front-running. Goldman and all the other Wall street crooks also have complex mathematical models that try and squeeze a tiny bit every day that adds up.

    The rest of us are just punters. Maybe we have a good month, then we give it back.

    Counting constantly changing squiggles. Following simple patterns. Nothing really works, at least not for long.

    I doubt there are many traders that make money her. Consistently and worth the many hours of effort. Am I wrong?

    • Fish do not stop posting. you sound like you have had a couple of trades work against you. It happens to the best of us. there is no holy grail in the market. no system that works. Market is going to do what the market is going to do with a little or should I say a lot from the fed. This happens to be a good blog with very good communications of people trying to earn money. Opinions will differ. Caldaro provides his insight based on what he sees. Has he been great? No . but has he been terrible No as well. Just like the rest of us Caldaro has been a victim at times with the fed working against him. What Caldaro does very good is admit early when he sees things changing or when things are not going his way.

    • ashram says:

      fishonhook says:
      March 30, 2015 at 11:35 am
      No system really works…Am I wrong?

      Entirely, but in an entertaining way so please keep it up.
      There are more than enough people on this site who are usually right…although not always right – but that is good because if everyone were always right, the monotony would be unbearable.
      Parenthetically, if you have been trading since 2009 using Caldaro’s intermediate term calls, how exactly have you managed to lose money?
      You have left me

      • fishonhook says:

        Well congrats Ashram. I know you have posted here under a couple of other names too. In any case I am glad you are making money trading.

        care to call your trades from now into the future or should we just accept your success on faith.

        • ashram says:

          Your acceptance of my success would mean nothing, which is just as well because that acceptance will not be forthcoming. After all, Tony has been enormously successful for years, which it is objectively documented in the archives on the right column of this blog – yet still you don’t accept his success.

      • budfox9450 says:

        Yes, I think you are wrong. Systems that are designed
        well, do work. Let give you an example. Using the
        SSO, apply the Bollinger Bands 20.2 setting. Then
        Buy at the Lower band lows. But, that is one system.
        I do not use Elliott wave, or by any other name….Bud

    • Yep, you’re wrong. IMHO

      If you trade without discipline, without a system, then you will likely experience the roller coaster results you alluded to in your post. That doesn’t mean you win all the time, it just means you win more than you lose. Of course, the journey to the realization of a ‘system’ is a personal adventure requiring long hours of study and the ability to stick with it, once found. Very few have that desire, or fortitude, and probably shouldn’t be speculating in the first place.

      That being said, I appreciate a healthy dose of skepticism and am with the rest of the group in hoping you won’t stop posting (just don’t put it all on Tony). 😉 Hope you find what works for you.

    • Normally, when this happen is not the responsibility of anyone but a good wave 4. Psychologically, the wave 4 is a take profit wave. Everyone is trying to make the most out of it. We will go much more down than suspected. Remember GC ??? Seams higher unresting, and any low bought but without new high…. And than…..!!

      • CB says:

        Hey Igor, good advice from you as always. TY.

        • Igor says:

          Hey CB, it’s not the advice 🙂 Just 5 levels of trader development. Everyone has to decide at which he/she is right now.

          • Igor says:

            at which level

          • CB says:

            Understood & well said, Igor. Yes, we go through a (long) learning process. Some people, however, just want to get short-cuts & magic formulas..in which case I’d quote what Lee has said earlier : That’s not how it works.” or to quote Jim Rohn “nobody can do your push-ups for you.” 🙂

    • simpleiam says:

      fish, do yourself a huge favor by ignoring about 90% of what’s on this site and finding a system that works for you. You can get a very good start by reading & incorporating many of the suggestions contained in this gem of a book by the Founder of Investor’s Business Daily:

      How to Make Money in Stocks – A Winning System in Good Times or Bad,
      by William J. O’Neil, 4th edition (2009)


  9. mjtplayer says:

    The short VIX ETF: XIV

    Failed at the upper TL of the downtrend channel last Tuesday at $36. Today that TL is roughly $35.70. A failure around this $35.70 – $36 area would help confirm my work of a higher VIX in April, up into the 20’s by mid-late April.


    The spot VIX itself looks like a 1-month IH&S pattern, with 17.19 as the neckline and 12.54 being the head. Support for the VIX lies in the mid 13’s – 14 and would form a RS of this pattern. Minimum 1x upside target for this pattern in the spot VIX, if confirmed, would be around 22

  10. gtoptions says:

    Known Technical Patterns that usually work pretty well for those that don’t believe. The Flag has yet to complete and should take the SPY to the .618 @ 208.46.


  11. johnnymagicmoney says:

    I have to admit I read everyone’s comments over the weekend and it was gloomy (which is why i thought it might impulse up). This market is so retarded. I am glad I am on the right side of the trade today but its so retarded

  12. Page says:

    Shorts covering will only fuel this rally until Thursday. SPX will break above 2100.
    Gold and Oil will be down this week.

  13. gtoptions says:

    Thanks Tony for the WE update and the refresher on Cycles.

Comments are closed.