weekend update


The market did this week what it had done the previous three weeks: open higher, dip mid-week, then close the week over 2100. Last four weekly closes: 2118, 2108, 2116 and 2123. For the week the SPX/DOW were +0.40%, the NDX/NAZ were +0.85%, and the DJ World index was +0.80%. On the economic front the reports came in biased to the downside. On the uptick: business inventories, the NY FED, the WLEI, plus the budget surplus improved and weekly jobless claims were lower. On the downtick: export/import prices, the PPI, industrial production, capacity utilization, consumer sentiment, and the monetary base declined. Next week will be highlighted by the FOMC minutes, the CPI and reports on Housing.

LONG TERM: bull market

Despite the market being in drift mode for the past nearly three months, and a 150 point trading range for the past seven months, the bull market continues. This week one of our long term indicators removed the negative divergence we noted two weeks ago. This suggests when the current uptrend ends it will only be Intermediate wave i of Major wave 5. And not Major wave 5 in its entirety. As a result the Primary wave III target remains on track for SPX 2500+ by the first half of 2016. Even though it may be hard to believe the market can advance 20% in the next year, after having gained only 5% in the past eight months.


The long term pattern remains on track. Cycle wave [1], from the 2009 low, still underway. Primary waves I and II, of the five primary waves, completed in 2011. Primary III has been underway since that October 2011 low. Primary I had five Major waves: with a subdividing Major 1 and simple Majors 3 and 5. Primary III has five Major waves: with a simple Major 1, a complex subdividing Major 3, and probably a subdividing Major 5 as well. The bull market remains on track to conclude in 2017.

MEDIUM TERM: still an uptrend

After completing a downtrend low in early-February, which we labeled Major wave 4, the market impulse higher until late-February when hitting SPX 2120. Since then, unfortunately for those tracking the waves, the market has remained in drift mode, an 85 point range, with a slight bias to the upside. After several attempts to label this activity, as the market has moved in starts and stops. This choppy activity looks like a rising diagonal triangle uptrend.


We have labeled it with five Minor waves: a: 2120, b: 2040, c: 2126, d: 2068, e: underway. The trend lines drawn connecting the tops and lows define the typical wave formation of a rising wedge. The upper trend line, where wave E has been trying to complete is currently right about at the OEW 2131 pivot. Typically a diagonal hits that trend line before it completes. Sometimes it falls a bit short, or even overshoots it by a few points. We believe any overshoot should be limited to the 2131 pivot range (2124-2138). Should the market rally beyond this we would have to think some other pattern is underway. For now the uptrend from the early-February low continues. Medium term support remains at the 2085 and 2070 pivots, with resistance the 2131 and 2198 pivots.


Typically during a diagonal triangle Minor waves a, c, and e have a Fibonacci relationship to each other. During this one, Minor c (86 pts.) equaled a near exact 0.618 relationship to Minor a (139 pts.). This would suggest Minor e should have had the same 0.618 relationship and topped out at SPX 2121, for a failed e wave. On Friday it travelled a bit further hitting SPX 2124 right at the open. The other relationship is wave d (58 pts.) to wave b (80 pts.), which is a non-Fibonacci 0.725 relationship. This would project a high of SPX 2130.


As long as the diagonal triangle uptrend pattern holds the OEW 2131 pivot range, we can expect the next correction to take the SPX back down to the 2040 area, or worse case the 2019 pivot range. This would complete Intermediate wave ii, and an Intermediate wave iii to new highs would follow. Sometimes it just requires patience to allow the market to set itself up for the next important move. Short term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots. Short term momentum ended the week declining from extremely overbought.


The Asian markets were all higher and gained 1.2% on the week.

The European markets were mostly lower losing 1.4% on the week.

The Commodity equity group were mixed gaining 0.4%.

The DJ World index is still uptrending and gained 0.8%.


Bonds are still downtrending but gained 0.1% on the week.

Crude remains in an uptrend and gained 0.4%.

Gold is now uptrending and gained 3.2%.

The USD remains in a downtrend and lost 1.7%.


Monday: the NAHB at 10am. Tuesday: Housing starts and Building permits. Wednesday: the FOMC minutes. Thursday: weekly Jobless claims, Existing home sales, the Philly FED, Leading indicators and a speech from FED vice chair Fischer. Friday: the CPI and a speech from FED chair Yellen. Best to your weekend and week!

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

About tony caldaro

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125 Responses to weekend update

  1. Rodneysussman says:

    Rangers have not won first 2 games at home in playoffs since 1994. I would put ST Louis on the 4th line, just like Richards last year. Unreal how bad Nash is. Who cares if he skates hard and is checking. He needs to score. Also Rangers only gave up 2 goals at even strength so they know that they need to stay out of the penaltyBox. Tampa 32-8-1 at home so I think this series goes 7 all we need to do is win one in Tampa

    Sent from my iPad


  2. mjtplayer says:

    Congrats Tony on calling for this “E” wave up to the SPX 2,131 pivot area.

    Where to now? 4 trading days left till the holiday weekend, will the market really turn around and head lower in the days ahead? Hmmm, possible, but I don’t know.

  3. Page says:

    Markets are extremely Overbought, if not this afternoon then tomorrow reversal is imminent.

    • berniebaruch says:

      until the Russell gets soft, this thing ain’t going down. Newby, you feel great relief by selling your uvxy. Even if it turns, the real bump in it doesn’t happen until the trend changes. Final time I will ever mention it.

      • zepfan123 says:

        The Nasdaq/Comp making new ATH closing high territory at 5080 here isn’t helping the case for getting a good correction going here either. If Transports get back on the horse soon and rally back over 9000,the entire broad market will most likely stay higher here. The short case just can’t get a working catalyst…much to my disappointment 2 weeks ago as I was short the SPX thinking 2100 would hold as hard resistance for 4 to 6 weeks with a run down minimum SPX 2040.

        • zepfan123 says:

          Not to mention of course if both the Dow and S&P close where they are now at 18,320 and 2130.50 respectively..they also close at new all time highs.- If we don’t top out and reverse this today, it could get very rough for shorts here.

      • Page says:

        Pullbacks and minor corrections are part of healthy Bull market. Market is extremely Overbought right now.

  4. the rocket is loaded with jet fuel and about ready for launch. 2140 today 2160 tomorrow. 2170 by friday

  5. $$$NEWBIE$$$ says:

    This is end of bull market, Primary wave 5 right here right now. It can fail at anytime.

    • H D says:

      by “fail” you mean all indexes at ATH’s right?

    • if there going to fail, they better do it soon, otherwise if we close at these levels makes for an easy gap and go Tuesday. just grinds higher, before another famous rip the bears face off bull rally. same movie, same result

    • CB says:

      actually, if you take a look at the $NYAD labeling , one would have to agree with newbie (that we’re in p 5). The $Nyad seems to be in P5, right?
      So, ur right newbie, it’s time to be careful here.
      But, there is always some “sideways” trading if anyone is “overactive,” so why worry about those new highs all the time 😉

    • uncle10 says:

      one of these years u are going to nail the top newbs. 🙂

      • $$$NEWBIE$$$ says:

        unc, im still solvent 🙂

        • uncle10 says:

          u rich newbie. anyone putting any $ in UVXY has money to burn 😉

        • uncle10 says:

          newbs, im with Bernie up there. I am going to try to not comment on your uvxy all in position again. but I have one last question. are you surprised that the vix is up nearly 2% and uvxy is down 8%. I don’t think you know what he have in uvxy. good luck my friend

          • $$$NEWBIE$$$ says:

            Uncle, did I expect vix to be up nearly 2% and uvxy ito be down 8%- Well NO I certainly didn’t expect it, but I am not at all surprised: the manipulation on this is insane. UVXY will be the biggest gainer when this Ponzi unravels, and I think we are close.

          • uncle10 says:

            there is no manipulation on this thing. its the way it was set up. its just doing what it is set up to do.

          • $$$NEWBIE$$$ says:

            Uncle, Lol. its just doing what its setup to do? Oh really, I guess you should short it then because it will always go down forever! Dude this instrument was created during a BULL Market it based of futures contracts. It has never seen the market go down for months and months but guess what that time is coming. I DARE U TO SHORT UVXY!

          • uncle10 says:

            even if the market does go down and down for months and months doesn’t mean your uvxy is going make any net progress. It will depend on how specifically it goes down. I know you prolly think im crazy but its true. Again I don’t think you know how it works. Last comment promise 🙂 hahaha

          • $$$NEWBIE$$$ says:

            Uncle, I know how it works. Do you really think the market is going to correct slowly from up here. If this is Primary 3 or 5 topping now (which I believe) spx will start to drop hard & fast, and UVXY is gonna go to the moon.

          • uncle10 says:

            now dang u made me respond. it doesn’t matter if it is fast like you think in fact it may be worse for uvxy if it is fast and volatile.

    • Hey chicken little give it a rest

  6. robnaardin says:

    SPX weekly upper bb @ 2152.14 Haven’t touched that since November.;)

  7. Well, well, well… Long looking nice. Hmmm…
    Buy above 2132.12 with Stop 2110.26
    Sell below 2097.22 with Stop 2119.03
    Let’s see if we strongly break 2130’ish; decision time? You can’t go broke taking a profit… Or so I’ve heard. 😉

    • llerias7 says:

      Inside already in the OEW2131 area. Can rise further but the risk/reward is lousy. So is a “yellow alert”. I am out os US and European equities in this month.

  8. welcome to summer/ holiday trading. Get ur vacation calendars going.

    • uncle10 says:

      take ur lap top. me thinks Summer is going to be more volatile than usual.

      • H D says:

        I guess so uncle, I thought we had flatlined this morn but everyone just woke up late.
        I’m always early, even for vacations.

    • scottycj1 says:

      15 years is 180 degrees (months) Gann

    • simpleiam says:

      TONY: Notice the bear market being talked about in these articles is a very short one of only about a year in duration, then, a market high in 2017ish. Is it possible to have such a P4? Technically speaking, the last P wave (2) was down into bear market territory. A year-long P4 would shake the hell out of many, many investors.

  9. The dollar has a couple of open gaps to fill (UUP currently 24.69) at 25 and again 26.Short term bounce before heading lower? Same with Dax.Gold doing okay as gold is possibly seeing the dollar bounce as temporary.If it breaks out with the dollar rising…very bullish shortterm.Good luck all.

  10. mjtplayer says:

    With this mornings slightly HH’s above Friday, the SPX & DOW are both sporting hourly -div’s.

    It’s early, but thus far volume sucks. Should be the story of the week heading into a 3-day holiday weekend: a sideways market with an upward bias on absolutely zero volume.

  11. berniebaruch says:

    Have they announced the reverse split for uvxy yet? Usually an annual occurrence when it drops to these levels. The ONLY time you can hold this is very briefly and when the trend is in your favor.
    Newby, check the vix today with when you made your first purchase. I would guess it is not close to down 30 percent. It is a seductive but dangerous security.

    • $$$NEWBIE$$$ says:

      Bernie, May 20 it splits. Uvxy was created during a raging BULL market, it has never seen a BEAR market.

      • berniebaruch says:

        True. Those folks that bought the IPO and went to an island for five years have seen it go from 80000, yes 80,000 to 9, for a return of -99. something in the past four years. These guys should be put in jail with another 50 or so banksters. Good luck to you.

    • uncle10 says:

      when you have unlimited funds like we all do on the net you just keep doubling down until it spikes and then you make a bundle. easy peesy

  12. blackjak100 says:

    Looks like iv of c will continue for a few more hrs. ii of c lasted about 8 hrs and iv of c will enter its 7th hr at the open. Look to go long 2114ish. GL & Cheers!

  13. mjtplayer says:

    ISIS now has complete control of Ramadi, a key city just 50 miles from Baghdad; what a complete mess Iraq and the Middle East is in


    • torehund says:

      Trojan ISIS warriors disguised as boat-refugees, Egypt getting totalitarian and Saudis soon with nukes, Israel on high alert and Iran revenue starved…When you think peak misery has been reached its just the start..

  14. M1 says:

    Good evening !!
    Not much changes this past week

  15. max torbreck says:

    Hi Tony, I think you mentioned the USD might be approaching the end of its correction and should run higher in coming years. I think you also said commodities might run high within the next 2 years. So are you thinking commodities might run higher within the next couple years despite a rising USD? Cheers

    • tony caldaro says:

      it is unusual, but has occurred before

      • fionamargaret says:

        …..perceived safe havens??

      • torehund says:

        Tony its amazing if this pans out, exporting currency induced inflation to the rest of the world that they are currently able to cope with. There isn’t any room for a rate hike elsewhere despite this currency inflation, especially so in the Euro-zone.
        Considering the grim unemployment picture, even a small rate hike would make politicians in Brussel having to flee for their lives. As there isnt any room for a hike, the currency is the only item to smack, and maybe Draghi will start printing the 0,3 Eurodollar T-shirt. Merkel may experience that doing “Noting” is not a passive decision without consequences. Market forces do their job regardless and maybe a rate hike will only be done when the Euro is weak enough to make Europe as a whole competitive.

    • mjtplayer says:

      Commodities have been in a bear market since 2011, the Dollar bottomed in 2011. If the Dollar hasn’t topped, why would commodities have bottomed?

      • torehund says:

        MJT- just reflecting around this theme, maybe commodities have not bottomed in dollar terms, but have bottomed in terms of a mixed basket of currencies, which is already creating inflation in for example Europe( long bond declining). And maybe the different commodities bottom with a lag -phase, oil was the last of the commodity items to crash and will maybe be the last to resume climbing…. But as we see with the US 30 year bond it has now neg divergence on both macd and rsi and may have topped out too 🙂

  16. max torbreck says:

    Any chance we might be approaching a P5 high with an ending diagonal?

    • tony caldaro says:

      None that I can see.
      Markets worldwide, especially Europe, still require a substantial 15%-20% correction for P4 before we can even think about a P5.
      Hard to see that occurring anytime soon with EQE underway.

      • hkloon says:

        Tony, I remembered that in one of the updates you mentioned SWISS stocks will top few months before S&P, with regards to European stocks, particularly DAX, will it top out early compared to S&P? I’m referencing S&P being in P3 top during Q1/Q2 2016.

  17. sibyn says:

    DAX CH Example

    Regards Sibyn

  18. soulsurfer says:

    thanks tony!!

    for now the trends from short- to long term remain up, and trading the trend is where the money is made: https://soulsurferusa.wordpress.com/2015/05/17/nya-update-slow-and-steady-wins-the-race/

  19. blackjak100 says:

    How worrisome is the weak DJT? Enough to suggest another possible P3 high very very soon.


  20. mh says:

    Thank you, Tony. I leave my contribute: where will market move next week and where will S&P 500 close next Friday? and a glimpse in the future of my forecasts https://marketmindview.wordpress.com/2015/05/17/spx-weekly-checkout-and-new-forecast-4/

  21. J.Wenger says:

    Thanks Tony. If nothing else, it has been a good ride for covered calls!

  22. torehund says:

    Good weekend to all on board. Sharky Europe.

    • fionamargaret says:

      …thanks torehund….

      • torehund says:

        You are welcome Fiona.
        ..finally a politician that tells something thats credible, sounds like the truth. The strong countries like Gremany never wanted to fully commit to a union, the relationship is like a pseudo marriage and weak bonds doesn’t stand a rainy day. This has “trapped” countries like Greece. Problems from the financial crisis where just put under the rug, so instead of a fresh start the problems becomes chronic….like if you go to the internist and disguise a problem through the use of pills, in the end you have to visit the surgeon.
        Lesson: if you go into company with a weaker part for the benefit, you have to give something too, or the relationship will ultimately breaks up. After tis interview I have even less confidence in the Euro and the Eurozone.

        • fionamargaret says:

          ..Harald Schumann is a good interviewer…wish he had asked about the agreement signed in Russia….could it have something to do with Greek ports…that would switch things up……

    • Always look forward to your charts…I said this a couple months ago…looks like a market that is trapped on the upside AND the downside.Meager returns at best and at worst….Personally hoping gold and gdx break out this week.Silver has jumped to a higher level (maybe can drag gold up as well).Good luck all.

  23. gtoptions says:

    Thanks Tony
    Appreciate all your hard work on updating the alternative markets this week.
    SPX/NDX Divergence chart seems to agree with continued weakness.
    GL All


  24. JeffMilano says:

    Thanks Tony, BJ had commented that 2218 he believe is 1.618*P1. This can be a top of P3. Now you are saying 2500+ as a possible top. Is there a calculation that you did to come up with 2500. Newbie do not get upset. It is just a question. Thank you Tony in advance.

  25. blackjak100 says:

    Impulses are easy to count and most say one more wave up 15-20pts left before some kind of correction. Everyone is now seeing the same thing called a diagonal triangle whether ending or leading. very interesting times. Thursday brought us the most extreme call/put ratio since the bull market began and Monday is a Phi Mate turn date. Both argue for a correction as well. It’s impossible to be long beyond 2130 for now.

    • arthurk says:

      Just a quick ref to the put/call ratios. This was actually May 11 (Mon) with CPC and CPCI distorted by (improper) reported VIX calls that were 10 x daily averages. I track these daily from CBOE website: (search VIX)
      VIX calls are included in both CPC and CPCI, and are reported as 1,451K where the average is less than 150k. I recalculated for my own records and contacted the CBOE.

      • blackjak100 says:

        Incorrect about Monday. See my post from yesterday (Friday update) that has link for reference.

        • arthurk says:

          No. You are incorrect. My link above is the actual CBOE datasheet Mon that shows a reported CPC of .56, CPCI (index) of .35 and VIX at .07.
          Compare that to Thurs CPC of .75, CPCI (index) of .79 and VIX at .13,.here http://www.cboe.com/data/mktstatall.aspx?Dy=14&Mo=5&Yr=2015, and show me how put/call was lower Thur.

          • blackjak100 says:

            I made a mistake by saying you were incorrect about Monday. We are talking about 2 different things which I didn’t reference in the original post. I was referring to the ISE Index C/P ratio. You are referring to CBOE Index P/C ratio. Sorry for the confusion!

  26. oddly enough, like last year, it’s deja vu all over again for $SPX with a rising triangle pattern in May which had bears frothing at the mouth to short only to provoke a beartrap that squeezed 90pts further to yR1 in late July…yR1 this year comes in @2189.99 very near Tony’s 2198 +/- 7 should history repeat.

  27. nardobeme says:

    Tony, thanks for your superb weekend update. Since I did not see a dip to 2110 Friday, I expect a go to 2130ish Monday-Tuesday and then rollover. I suggest Monday as being a green open, perhaps a nice gap up even. I intend to aquire VXX calls to play this next move down; ought to be quite volatile imo. GW all…

    • pimacanyon says:

      why do you prefer VXX calls instead of using VIX calls?

    • $$$NEWBIE$$$ says:

      nard, everybody looking for what you are, is mr market that simple and predictable?

      • nardobeme says:

        Personal preference on VXX, and new, that’s my gameplan thus far. I never implied it was simple, nor that predictable; can always change… but, look for clues that “Mr Market” gives… 😉

  28. bhupal777 says:

    “Sometimes it just requires patience to allow the market to set itself up for the next important move”.
    Very true for the past few months. Thanks Tony.

  29. Page says:

    Tony, Thanks for another Outstanding Weekend update.

  30. scottycj1 says:

    From this weekends Update….just the 1st 3rd of it to be fair to paid subscribers who pay 12.95 a month.

    Lucky SEVENS and Squares. This weekend I will teach you a few Gann techniques. Gann believed some of the most powerful numbers were the square root and square of numbers. Here is a quote
    Although Gann never revealed exactly how he used the ennegram we can gather from his words that it was probably very important to him: “We use the square of odd and even numbers to get not only the proof of market movements, but the cause.” W. D. Gann, “The Basis of My Forecasting Method” (the Geometrical Angles course), p. 1 Gann also was big on the number 9. He had a square of 9 calculator on paper he carried with him onto the trading floor.

    This past week was 324 weeks from the Mar 6th 2009 low of this bull market. Major highs and lows were also very important in Ganns work. The sq rt of 324 is 18. Or 2 X 9. 9 is 3 squared —– 6 X 6 =36 therefore 9 X 36 =324 2 squared numbers times each other. This should be meaningful and on it’s own should signal a high. Another of Ganns tools was what he called the 45……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………….GLTA have a great weekend.

    • JD C. says:

      My experience with Gann was following Bill McLaren years ago. I picked up a few tidbits, but he was always looking for tops. It was too much negative noise. I think Gann analysis is interesting, but did not fit my strategy. Lately many things have pointed to a possible top forming, a simple strategy of being less long, and/or using stops, and/or hedging can all protect gains. Good luck.

      • pimacanyon says:

        well said. I have realized that over the past few years I’ve looked at analysts calling one top after another after another, and almost all have turned out to be false signals (if you can call them “signals”). I too do better with a simpler approach that avoids all the negative noise.

        One conclusion I’ve come to is that no one can say with certainty that the top is in in real time. It’s only in hindsight that we’ll be able to see a significant top. (But you can be sure that when we do get a significant top, lots of analysts will be saying “I called THE TOP!” Never mind the fact that most of these top callers have already made several–or several dozen–top calls over the past few years.)

        • budfox9450 says:

          $HYHGH….5/14/2015. Indicates that we saw “only” 169 NYSE
          stocks make New Daily Price Highs. If, fewer and fewer
          NYSE stocks are making new price highs, with a near record
          SP500 index. What might the evolving pattern be called?

  31. Thank you Tony for all of your efforts and insight. I read all of the weekend updates, usually several times to gain a better understanding. I am currently positioned with 100% equities in my long term account, 50% in my intermediate account, and all cash short term. Hoping we top at SPX 2131 pivot, and then correct to the 2019-2040 range for a good buying opportunity. Seems like numerous indicators (technical, sentiment, trend lines, etc.) support that possibility. Thanks again. Rick

    • tony caldaro says:

      good luck Rick!

    • JD C. says:

      wisconsindoctor, Most of the time in a bull cycle a long or slightly less long strategy is the best. I likes it!! Trading an oversold short term chart is okay but no way to build wealth unless you can stomach trading one’s entire account, then you still miss upside. Long or a bit less long is a great strategy.

  32. M1 says:

    Thanks Tony
    If primary wave V of the monetary base is still unfolding I wonder if we could apply this rule and expect an extended primary wave v:
    “When Wave 3 is less than 1.62, Wave 5 will often overextend. The ratio of Wave 5 will be based on the entire length from the beginning of Wave 1 to the top of Wave 3”.
    “W5 = .62 X Length of 0 to 3; W5 = 1 X Length of 0 to 3; W5 = 1.62 X Length of 0 to 3”
    It took the first target last year. The second target is at 4467. Third target 5631.
    How could the monetary base expand that much without the federal reserve help ?

  33. llerias7 says:

    Just like you said, Tony, “Even though it may be hard to believe the market can advance 20% in the next year”. A bold bullish cal! One year from now should be fun to remember.

  34. pooch77 says:

    Tony Newbie is not going to like your 2500 call early 2016 as he is looking for 1200. Next week trading into holiday weekend bradley turndate May 23 and May 24,time to take a breather and hope Tonys pullback to 2019 matterializes.Next turndate is June 8th…low?Watch daily charts this week,indu is in high bleed territory,Naz and iwm need to catch up

  35. Tony,
    We believe any overshoot should be limited to the 2131 pivot range (2124-2138). Should the market rally beyond this we would have to think some other pattern is underway.

    Would you care to speculate what that other pattern might Be?

  36. Stephen King?….good grief….nomen omen

  37. HSBC’s Chief Economist, Stephen King says the economy is like the Titanic with no lifeboats, absolutely no wiggle room if low commodity prices bring down emerging markets or if/when China’s economy/currency collapses or if the Fed prematurely raises interest rates.
    SPX ‘iron ceiling’ looks solid IMHO…

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