weekend update


The market started the week at SPX 2107. A gap up opening on Monday took the SPX to 2119. Then a gap down opening Tuesday took the SPX down to last week’s low at 2099. But the market gapped up on Wednesday carrying the SPX to 2122. Then a gap down Thursday open eventually led to breaking last week’s low and hitting SPX 2086. For the week the SPX/DOW were -0.80%, the NDX/NAZ were -0.35%, and the DJ World index was -1.10%. On the economic front reports came in quite positive. On the uptick: personal income, PCE, construction spending, ISM manufacturing, ADP, payrolls, consumer credit, plus the trade deficit and weekly jobless claims improved. On the downtick: factory orders, ISM services, WLEI, and the unemployment rate rose. Next week’s reports are highlighted by Retail sales, the PPI and Export/Import prices.

LONG TERM: bull market

While many market pundits remain focused on the current worries of the day: Greece, the FED’s first rate rise in nine years, a lofty SPX PE of 20, and the rising USD. They seem to forget the ECB, and several other countries, are, and have been, in QE mode for some time. Yes, all of the European indices are currently in confirmed downtrends. Yet, they have had big rallies over the past several months. Over the past few weeks the Greek debt drama, and rising long term rates, have given European bullish investors a reason to pause. In the US, during this entire period, the SPX has remained range bound (2055 +/- 80 points) for more than seven months. With three uptrends, two intervening downtrends, and probably another downtrend underway.


In the meantime the Cycle wave [1] bull market continues to unfold. Primary waves I and II, of this five primary wave bull market, completed in 2011. Primary wave III has been under since then, and is expected to last into 2016. Then after the largest correction since 2011 for Primary IV, Primary V should kick in and carry the market to all time new highs by 2017. So while many are focused on the here and now. This market continues to look bullish for at least another two years.

MEDIUM TERM: downtrend probably underway

After a very choppy uptrend, from early-February to mid-May, a downtrend/correction appears to underway. We have been labeling this uptrend as a leading diagonal triangle for Intermediate wave i of Major wave 5. The correction that should follow would be Intermediate wave ii. When concluded a fairly strong Intermediate wave iii is then expected.


Last week we noted several medium term negatives that should start to pressure the US market. Negative divergences on monthly, weekly, and even some daily charts. Seven of eight, now all eight, European indices are in confirmed downtrends, and six of eight Asian indices. This week we can add the NYSE and the NYAD in confirmed downtrends, as well as, four of the nine SPX sectors. Market internals continue to weaken as we await a downtrend confirmation. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 and 2198 pivots.


In late-February the market made an all time high of SPX 2120. Two and a half months later, while still in an uptrend, the market made a new all time high at SPX 2135. Not even a 1% gain in 2.5 months. Since that high the market has been doing similar choppy activity on the way down. Assuming this potential correction is Intermediate wave ii we have labeled it as follows. Minute a SPX 2099, Minute b SPX 2126, and Minute c SPX 2099 to complete a complex flat for Minor wave a. Then a three wave Minor b rally to SPX 2122. This has been followed, thus far, by four waves: 2102-2113-2086-2101 for part of Minor c. Since there are no overlaps, we currently consider this last decline as part of Minute a of Minor c.


Fibonacci retracements, for this potential downtrend, are: 50% @ SPX 2058, and 61.8% @ SPX 2040. The internal count of the potential downtrend offers some additional levels for Minor wave c: 1.618 a @ SPX 2064, 2.0 a @ SPX 2050 and 2.618 a @ SPX 2028. As you know we have been expecting a decline into the low SPX 2040’s, or worse case the 2019 pivot range. That view has not changed for quite a while. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2099/2101 and SPX 2118/2122. Short term momentum ended the week oversold.


The Asian indices had some big moves this week, mostly down, and ended -0.9%.

The Europe indices were all lower, ending -2.3%.

The Commodity equity group was mixed but lost 1.8%.

The DJ World index confirmed a downtrend, for the first time since December, and lost 1.1%.


Bonds were under pressure this week, remain in a downtrend, and lost 1.9%.

Crude was also under pressure and lost 1.8%.

Gold confirmed a downtrend and lost 1.9%.

The USD had some volatile days, is still trying to confirm and uptrend, but lost 0.6%.


Tuesday: Wholesale inventories. Wednesday: Budget deficit. Thursday: weekly Jobless claims, Retail sales, Export/Import prices and Business inventories. Friday: the PPI and Consumer sentiment. Best to your weekend and week!

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

About tony caldaro

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108 Responses to weekend update

  1. nardobeme says:

    IMO, tomorrow will not just easily reverse course… 🙂

  2. Page says:

    Tomorrow is reversal day so here’s what will happen tomorrow:

  3. stephenk1980 says:

    2080 nearly right on the money, Let’s see how long it holds and how hard the bounce is.

  4. fishonhook says:

    Prechter’s track record is worse than Amstrong
    this is what he said in 2010 -since then the S and P has doubled


    Look where he ranks in the Guru rankings for accuracy. Dead last

    We may have a crash but it will be despite what Prechter says.

  5. Do not think me crazy but Dow can make a 5% correction should you lose the 17.928k the weekly target 17.156k


    • zepfan123 says:

      A 5% correction is nothing. It’s hardly worth calling it it a correction.More like a mild pullback. Now it you’d of said you thought the market would make 50% correction here…i might call you a little crazy.

  6. torehund says:

    Iceland to implement a 39 percent tax on big foreign holdings if they are externalized…in order to support the currency…well thats like saying the currency is toast so what would you do with your savings if they were residing in an icelandic bank ?

    • mjtplayer says:

      Capital controls never work, they only exacerbate the problem. Signs of a desperate government, the stupid politicians in charge have no idea what they’re doing or the effects of these insane policies.

      Capital controls = please don’t ever invest or bring money here from outside the country. Stupid….

    • Buy (liquid) physical assets; ASAP. 😉

      • torehund says:

        Governments hunting whats someone else’s. You choose between negative interest rates/plastic money, or easier like Iceland just a horrific tax on withdrawals. If you withdraw and deposits a couple of times maybe wiper fluid is the only stuff you may afford 🙂 🙂

        • I suppose it depends on what withdrawal means? If I can still make purchases through my account (by whatever mechanism they have there; credit card, check, etc…) and that is NOT considered a withdrawal, then I am not limited to wiper fluid (unless of course the liquid asset I desire doesn’t allow purchases through those means). 😉

          • torehund says:

            we will see how governments solve their debt crisis, and simultaneously prevents a bank run…exciting times, thats for sure 🙂

  7. $$$NEWBIE$$$ says:

    $$$NEWBIE$$$ says:
    June 5, 2015 at 5:12 pm

    Almost every blogger looking for upside Monday- Bulls and Bears, therefore I declare the masses will not get their wish and Monday will be big down day 2070-2060 on spx.

    • tradeanimal says:

      Newbie…Your recent gifs have been really funny! Keep them coming.

    • zepfan123 says:

      Maybe we can get to those numbers tomorrow if they finally get serious and drop this thing 200 points tomorrow. The technicals today look to me like they would support that possibility,but it’s still a ‘maybe’ until we do it. SPX 2040 this week would be sweet.

  8. 56rambler says:

    Touch of the lower blue trendline. Does that lead to a bounce? or a failure and a break below?

  9. mjtplayer says:

    I think we’re in for a slow grind lower, with a slow grind higher in volatility, into the end of June over the next 3 weeks. Obviously the 2 events that will determine direction from there are Greece & the Supreme Court ruling on Obamacare subsidies. Until then, managers will be nervous and buying protection and reducing leverage in their portfolios, just in case.

    I don’t think anyone has a crystal ball into the outcomes of these 2 events, so managers can’t just assume things are going to be fine.

    IMO – I think the EU folds and Greece gets their last tranche of bailout money, kicking the can down the road a few months. I think the real issue comes the next time around, when Greece needs more but the bailout fund is empty and the emergency line at the IMF has already been tapped – then what?

    It’s anyone guess as the the Supreme Court’s decision, I still can’t believe they held-up Obamacare the last time around. If the subsidies get ruled against, then health insurance company stocks are going to get creamed.

    • zepfan123 says:

      Isn’t Prechter ALWAYS warning of a coming market crash ? From what I see on a lot of blogs..he has a lot of angry subscribers of his out there that have lost a lot money due to him being very bearish the last 5 or 6 years. I don’t follow the man…but I see him talked about a lot in a less than favorable light quite often. Although right now..I wouldn’t mind seeing a really scary pullback here for a month or so,as I have a short trade on in the SPX and SPY..and don’t see myself buying anymore stock for quite a while.- Hope we see at least SPX 2040 this week…but getting below even SPX 2070 may be a tall order the way this thing acting so far this morning.

      • budfox9450 says:

        You raise a valid point. Prechter has not done, well for many
        years. With that said. My own weakness is that, I remember
        his great market calls, in the 1980’s….With that said. Yes,
        one should apply a degree of care, when Prechter makes
        public market calls.

        • zepfan123 says:

          Well the market ALWAYS gets a good crash every so often no matter what..so if you just keep calling for a crash everyday for several years while the market keeps going up..eventually your crash call will come.. But all that is…is bad TA and very bad guessing.-One can’t take any credit for that. And lets not forget that the 1987 crash was actually a springboard for the biggest and fastest bull market run the U.S. market has ever seen and shocked 99.9% of tee so-called expert market analysts of that time. In only about 10 years the market was 5 times higher than it had ever been in history…at Dow 12,000. Unbelievable by historical standards up to that point.
          But that was then,,I’ll just focus on the “Now”. To me..it would appear we might have the conditions for at least an interim top in place..and might get some more pullback here. but I’m not going to get even a little excited about that prospect unless we start closing below SPX 2070 this week. Since I’ve got a couple of short trades on at the moment…I’ll hope Prechter gets at least a little of that collapse during June he keeps looking for.

    • budfox9450 says:

      Thank you for the link…

  10. filipozze says:

    ending diagonal pattern in play…in the second part of this year deep correction since 2011 will come. As published months ago, this is the pattern:


    • reddragonleo says:

      I like your thoughts drawn on that chart but when I connect the October low of 1820 to the February low of 1920 to make a rising trendline we broke it back in March of this year and are currently way away from it now.

      • filipozze says:

        price making a marginal new highs after that..but a marginal highs coud be in my opinion the last push up before ponting down to 1.820. so far we didn’t broke wedge to the upside so pattern is still valid, a drop in five waves below 2050 will confirm the ending diagonal

    • stephenk1980 says:

      Back when it was first proposed it looked plausible, but I’ve seen so many different rising triangles by different people now that I just can’t see it playing out that way any more. Too easy + too popular = too unlikely to succeed. IMO of course.

      • filipozze says:

        thank you for your opinion stephenk, a rising triangle is a very different pattern. my proposed is an ending diagonal pattern! anyway too risky to buy S&P500 this year, better wait a major correction

        • stephenk1980 says:

          I meant a rising triangle in a more general form and didn’t meant an ascending triangle as such i.e. I was talking about all the different variations of rising wedges that people (not necessarily on this blog) are proposing.

          But anyway, I do agree with you about buying at this point, as I can’t see a good way in at the moment. If we had a 10% correction then I’d be a buyer, but not necessarily long term. Until then, or until a bullish setup comes along after some real volatility, then it’s a waiting game.

          • stephenk1980 says:

            Although having said that, I did say on May 12th that that doji formed that day was very unusual in its extremity and it would need to be retraced significantly and wouldn’t you know it, but now we’re nearly there and magically the trend line of the recent lows since April 1st and fib points are all aligned, so maybe a buy around 2080 could be a good short term bet higher.

          • filipozze says:

            totally agreed with you! if we make a deeper correction then we can have a good buy opportunities

  11. I went backed a bit further and checked for down NFP weeks to see what happened post. What I found is that there was a series of four in a row in mid-2012, but none of them were preceded by a down pre-NFP week. 1 of those (June 2012) saw a drop of only 11 and a nice! ramp of 51 points post-NFP, the other three were all down a minimum of 26 points.

    There were also two down NFP weeks in 2013, but neither of these was preceded by a down pre-NFP week. December saw a max down of 33 in the post-NFP week, whereas April saw a ramp of 44 points in the post-NFP week.

    So all three previous down pre-NFP weeks, down NFP weeks in the past 3 1/2 years have been in the previous 8 months. All three saw down post-NFP weeks, and as I noted on the Friday thread (I think it was there), each saw 10 or 12 up on Monday or Tuesday before seeing a drop of a minimum of 43 points (March 2015) from the post-NFP week’s high, and as much as 72 points (October 2014) from the post-NFP week’s high.

    There are no guarantees, but this looks like a pretty good case for some kind of weakness this week, with a top to bottom selloff of between 40 and 70 points.

  12. Everyone I check out has 2070 as a rock solid support level.Breaking it would be shocking and cause a rethink on many counts (from bullish to bearish).Will the 125d hold again? Can the algos handle such an event in a smooth way? What will gold and the bond market do? These and other questions will be answered in our next episode of “As the Stock Market Churns”.

  13. soulsurfer says:

    thanks tony!

    Further downside is suggested by the charts, and DOW ~$17,750 and ~$17,600 (SPX 2075, SPX 2045) are important levels for S/R going forward:
    But, if that means we should become outright bearish is a whole other question and the longer term charts continue to suggest not:

  14. esvxm says:

    Thanks Tony for the analysis!

    German DAX, SPX, NYA, DJIA, DOWT, DOWU, NASDAQ, R2K update… http://marketchartpattern.com/indices/markets-german-dax-spx-ndx-r2k-djia-dowt-dowu-nya-weekend-premiere-6-7-june-2015/

    • Page says:

      Thanks Bouraq.
      Now I am starting to wonder if NatGas will even test 2.50? I went long Oil Thursday, I think Oil will have nice rally from here. I also went long Gold miners on Friday 🙂

  15. blackjak100 says:

    Found this interesting because I believe GOOG is about to do the same thing since its IPO. It did not even break its trendling in 2009!


  16. scottycj1 says:

    What will cause the next bear market ?

  17. fishonhook says:

    I know you think the $ssec is just a casino with unsophisticated investors throwing their new found wealth at it and I agree
    However you have put a count up and I think you should review it to see if there is any validity

    Firstly it went last the blue line which was the new target. What next?
    Secondly is it still and a b c
    Starting to look like a 5 wave Structure

  18. bhupal777 says:

    Thanks Tony.

    Though the broader indices had no major move, if you are holding right stocks in right sectors then Friday was gangbuster day. For that matter the whole week was a great week. Example: Regional financials ($KRE), Biotech ($IBB), Security software ($HACK), Energy sector ($XLE) and lot of China internet stocks. Also take a look at the weekly charts you won’t miss the strong price action going on under the covers. As I mentioned before on this blog my buy signals from March have been performing good. I am seeing the similar strong price action on my recent buy signals as well. Good Luck All.

  19. blackjak100 says:

    Thx TC. The counts are a mess and technically speaking there are arguments for more upside or downside. I do not have a great count at the moment. One thing I can say is we have declined 50 puts without much increase in downside MACD. Either a third wave/C wave is still coming or we are heading higher from here. Very short term I still expect 10-12 pt rally from Friday’s close. Gl and cheers!

    • blackjak100 says:

      Nate Kautz now believes there is one more high coming. Big problem I see with this is ED has violated 2-4 trend line and diagonals always adhere to them. On the flip side, we have not seen a violent reversal associated with ED’s. Nonetheless, a rally on Monday of 10-12pts at the min should be expected on Monday. What happens from there is anybody’s guess.

      • budfox9450 says:

        Depends on how you label the Oct.15, 2014 low.
        IMO, it was a P4 low, thus suggesting that 5/20/15
        at 2134. Was a market top. The top decision,
        predicated on market sentiment, viewing the Oct,15 low
        at 1820, was a P4 low, and that the wave structure
        now is called “choppy”…indicators not supportive
        of a Bull market advance…IMO

        • ariez5 says:

          Bud, I have to say I agree with you in principle. Don’t think this is a leading diagonal.

    • alexhartley1 says:

      The main count carried on this site isn’t a mess though BJ. Why not just stick with the one suggested here? It seems to be working quite well in my opinion. There’s the chance of a potential bottom Monday next week (12/6 – a cycle date) in line with someone else who suggested the timing date but I can’t remember who (apologies).

      • blackjak100 says:

        No, it’s more the technicals supporting the counts which make the counts a mess. For example with TC’s count, I do not like the NYAD divergence seen at 2135 especially since a LD is not an impulse. While I don’t have facts or backtesting to support my claim, this is not a divergence I would want to see at the top of a wave 1 of a Major advance. Maybe TC can prove me wrong where this happened before.

  20. mike7x says:

    Thanks Tony. Yes, still “expecting a decline into the low SPX 2040’s, or worse case the 2019 pivot range.” A triple crown today and 2040’s next week.

  21. fotis2 says:

    Thanks Mr.T GL to all for next week should be interesting.

  22. arthurk says:

    Torn between long term and int term outlook.

    In my post last weekend, I indicated that my int term outlook was for the bottom of this b-wave around June 9 at SPX 2070-80 then rally toward 2200.
    However, when I considered my long term outlook, a more likely top might be 2140-50. The reason as I mentioned in my 2nd post, I have a suspicion that we are in P4 as a flat. I’m no expert on EW, but I found an excellent primer at stockcharts:

    Towards the bottom there is a picture of exactly what I see happening under “3 Rules”, and is explained under “3 Guidelines” as follows
    “Guideline 2: The forms for Wave 2 and Wave 4 will alternate. If Wave 2 is a sharp correction, Wave 4 will be a flat correction. If Wave 2 is flat, Wave 4 will be sharp.”
    The reason this is important is that a breakout of the current wedge pattern back to Dec could be a terminating pattern:
    1 – a breakout to the upside (over 2150), indicates a more serious decline to follow,
    2 – a reversal at 2140-50 and a break to the downside, possibly to 1950 (to complete flat at Dec lows), represents the termination of P4 with P5 to follow. SPX 1950 is about 100 pts below 200dma as was Oct lows.

    A high volume rally into June opt exp could setup a repeat of the Sept triple witch topping pattern, possibly on “Greece is fixed” again, then a “surprise” July Fed rate hike..

  23. mh says:

    Thank you, Tony. My weekly contribute is ready as well, with a special feature today, with new software development under way: where will S&P 500 close next Friday? and what about Monday, Tuesday, Wednesday and Thursday? https://marketmindview.wordpress.com/2015/06/06/spx-weekly-forecast-4/

  24. zepfan123 says:

    Thanks Mr.Caldaro for all your very valuable market data and views everyday,and of course thanks for this forum to post our own market thoughts,responses,prognostications and trade ideas.

  25. JD C. says:

    Thank you Tony for all the updates and hard work. Without your OEW analysis I’d be lost in ew counts. I’m about 90% with ya, still think there’s a possibility of PIV here. My daily chart will probably provide a buy signal in the 2040-2060 range, we’ll see. Everyone have a great weekend.

  26. Page says:

    Awesome update. Thanks Tony.

  27. Tony,
    Excellent clarity as usual.
    I did want to point out 2 typos in the short term analysis.

    Assuming this potential correction is Intermediate wave ii we have labeled it as follows. Minute a SPX 2099, Minute b SPX 2026, and Minute c SPX 2099 to complete a complex flat for Minor wave a. SPX 2026 should read 2126

    Then a three wave Minor b rally to SPX 2126. Should read SPX 2122

    Feel free to pull this post so as not to confuse readers

  28. torehund says:

    Thanks Tony.
    What I see is a discrepancy between tech parameters on the Rut vs the Spx (Rut far more healthy). That makes sense if the market (in anticipation) is pricing in a rate hike.
    Maybe it is an impending dollar appreciation that will hit the SPX components that are heavily dependent on exports for revenue growth.

    • torehund says:

      …just compare the 60 min chart on rut vs the spx, former is above zero on macd and also in the process of hocking up, Monthly looks like impending hocking and weekly is looking better probably ending a correction, conclusion; RUT= looks yummy…

  29. hkloon says:

    Thanks for the update. Have a good weekend…

  30. ABchart says:

    Hello everyone!
    Thank you, Tony, for this excellent update!
    Probably a small typo in the “Short term” paragraph: (Then a three wave Minor b rally to SPX 2126) = only 2122.

    My undestanding: if the minute (a) is in place at 2086, the spx should retrace 2122/2086 for the minute (b) of minor (c)
    50% = 2104
    62% = 2108

    Then minute (c) of minor (c) target between 2064 and 2019, with preference (yours) for 2040.

    Otherwise: I noticed that your weekly graph of the CAC is blocked since May 15 🙂

    Thank you once again!

  31. GYN LAB says:

    Thanks Mr T for yet another outstanding weekend entertainment!
    Following your count as well as my alternative: LOD at 2086 as Minor a and a Minor b bounce to 2110-2116 (.500-.618 of 2135-2086) before all hell breaks loose with Minor c down to 2040 or more.
    I think the Monday bounce should offer a clearer picture as to which scenario pans out.. Enjoy your weekend sir!

    • GYN LAB, I am looking at the same counts however I think your alternate is my preferred count. 2086 going below and then closing above trend line support finishing the abc. Minor b as you said looking higher next before big drop in minor c. Monday should dictate the course.

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