weekend update


Volatile week. The market started the week at SPX 2077. On Monday it traded down to SPX 2057 before rallying to 2079, only to drop to 2044 on Tuesday before rallying to 2084. On Wednesday the market headed down to SPX 2045, before rallying to 2074 and then dropping to 2051 on Thursday. Friday the market rallied to SPX 2081, then closed the week unchanged at 2077. One to two percent swings nearly every day, after weeks and weeks of less than one half percent daily swings. For the week the SPX/DOW were mixed, the NDX/NAZ were -0.25%, and the DJ World was -0.8%. On the economic front negative reports outnumbered positive ones for the first time many weeks. On the uptick: ISM services and wholesale inventories. On the downtick: consumer credit, the WLEI, the MMIS, plus the trade deficit and weekly jobless claims both increased. Next week’s reports will be highlighted by Industrial production, the CPI/PPI, Retail sales and the Beige book.

LONG TERM: bull market

As the correction in the SPX/DOW hit new lows this week, and the NDX/NAZ confirmed downtrends, the bearish market pundits were out in force. On Wednesday the CBOE put/call ratio hit its highest level since the 9.8% October correction. While this correction is down only 4.3%. Plus the VIX, more a measure of volatility, hit its highest level since the more moderate 5+% January correction. Usually, the more the daily MACD drops the more bearish traders become. The daily MACD hit its lowest level since October on Thursday. A multi-month trading range market has a tendency to reset momentum indicators closer to neutral. Then any correction easily forces them into negative territory.


Longer term we do not see any reason to change the current count nor the long term projections. We continue to label this market as a five Primary wave, Cycle [1] bull market. Primary waves I and II completed in 2011, and Primary III has been underway since then. Primary I divided into five Major waves with a subdividing Major wave 1. Primary III is also dividing into five Major waves, but with a subdividing Major wave 3 and an expected subdividing Major wave 5. Major wave 5 has been underway since the double bottom Major wave 4 low in late-2014 to early-2015.

When Primary III does conclude we would expect the largest correction since 2011 for Primary IV. Then a Primary wave V to new highs. With the ECBs EQE program underway until at least late-2016, Primary III is not likely to top until Q1/Q2 2016. Our target for Primary III is SPX 2500+ during that timeframe.

MEDIUM TERM: uptrend trying to get going

This volatile week displayed a couple of events we had been expecting for this downtrend. First the SPX did decline into the 2040’s on Tuesday and Wednesday. Second the NDX/NAZ finally confirmed a downtrend this week as well. Typically, during this bull market, downtrend confirmations are often within days of the downtrend low. This is the reason we thought it was important that the NDX/NAZ confirm a downtrend. Even though the SPX/DOW confirmed their downtrends a month ago. The NDX/NAZ had their lows for the downtrend on Tuesday/Wednesday. Let’s see if they hold.


We counted the downtrend in the SPX as an a-b-c Intermediate wave ii. The uptrend from early-February to mid-May appears to be a leading diagonal triangle Intermediate wave i. The low hit this week at SPX 2044 was within four points of a 0.618 retracement of that entire uptrend, and within four points of the B wave of that triangle. With an oversold condition on the MACD, and a positive divergence on the RSI, it looks like a good setup to start the next uptrend. Notice the last two downtrends, December and February, spent a few days bouncing off the lows before kicking off to the upside. This downtrend appears to be doing the same. Medium term support is at the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots.


After months and months of choppy sideways to upward market activity it might be time for an impulsive uptrend again. Especially since we are expecting this potential uptrend to be a third wave: Intermediate iii. During the correction we counted a complex zigzag Minor wave a to SPX 2072, a sharp simple Minor b zigzag to SPX 2130, then another complex zigzag for Minor c at the recent low of SPX 2044/45.


After that low the market remained volatile, which is often the case. Rallying to SPX 2074 on Thursday, after a gap up opening, then dropping to 2051. Friday offered another gap up opening, which took the market to SPX 2081. Thus far we count three waves off the low: 2074-2051-2081. Should an uptrend indeed be underway we would expect the market to clear the OEW 2085 pivot next (2078-2092). If the downtrend needs more time to complete, a retest of the SPX 2040’s would be next or worse case the 2019 pivot. Thus far we favor an upside breakout. But with all the economic events next week one can never be completely certain. Best to your trading!


Asian markets were all lower for a net loss 0f 2.6%.

European markets were all higher for a net gain of 1.6%.

The Commodity equity group were all lower losing 2.0%.

The DJ World index continues to downtrend and lost 0.8%.


Bonds remain in a downtrend but finished the week flat.

Crude is also in a downtrend and lost 6.7% on the week.

Gold continues to downtrend and lost 0.6%.

The USD is in an uptrend but lost 0.2%.


Monday: the Treasury Budget at 2pm. Tuesday: Retail sales, Export/Import prices and Business inventories. Wednesday: the PPI, NY FED, Industrial production, the FED’s Beige book and Congressional testimony from FED chair Yellen. Thursday: the ECB, weekly Jobless claims, the Philly FED, NAHB housing, and Senate testimony from FED chair Yellen. Friday: the CPI, Building permits, Housing starts and Consumer sentiment. Best to your weekend and week!

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


About tony caldaro

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187 Responses to weekend update

  1. gtoptions says:

    Thanks Tony
    Bears be cautious of Wide Ranging Bars.


    • tony caldaro says:

      hop, skip, and a jump

    • GTO, nice call on SPX attempt to close 2101.22 gap. While we did get that drop on ES unfortunately for the cash market player it did not occur in the cash due to a-Greekment-Opa! This is a prefect example of why I trade futures vs cash.

      • gtoptions says:

        Thx EL Matador ~ While the SPX was at resistance on Friday the daily chart remained in a strong momentum swing signal. I may be a bit more bullish, but I also see your analogy with the P2, and remain cautious until there is a break of 2130 and the technicals confirm. Opa!

  2. pooch77 says:

    Newbie,short the market when the daily charts top out,we are due for a bounce.Maybe Tonys PIV starts after the end of July

  3. NEWBIE says:

    Guys I’m scared for all of us, this propped market is absurd and their is a reason why their holding it up and the reason isn’t a good long term solution to anything. I think are worst days are right in front of us.

  4. The unwieldy nature of the Eurozone is really coming to the fore. Finn Fin Min Stubb is again reiterating his government cannot support more money for Greece. Meanwhile the German High Command will debate the Greek question. They will either mobilize for Operation Grexit or Operation Fixit. Greece has to look forward to the rape and pillage of what little assets it has left or getting booted out the Reich, oops I meant the Eurozone. Putin stated publicly last week that Greece has not asked his country for financial aid. Although Russian reserves were a bit lower than what they had been, thanks to crashing oil and economic sanctions, Putin stressed that Russia still had the capacity to assist other countries and where already doing so. Maybe that Trojan Horse is still in the wings. Markets sank for the 4th Sunday in a row and then rebounded. What’s the count? Perhaps one more slightly higher high then observe the nature of the decline. INDU has closed its gap from 3 Friday’s ago, the SPX has not.

    • mjtplayer says:

      Finland will probably vote against the bailout package, 2 more countries that may vote it down are Austria & The Netherlands. It will not be an easy vote in Germany either, German Parliament politicians will have to go against their constituencies, which is political suicide.

  5. stmro says:

    So this is what puzzles me:

    – Tsipras and his left-wing party get elected on the promise of securing debt relief and reducing the burden of austerity
    – The EU block plays hardballs, rejects debt relief and wants more austerity for cash
    – Tsipras calls a referendum and recommends his people reject the deal
    – The referendum passes in his favour
    – He fires his anti-EU finance minister and accepts an EVEN WORSE deal due to the deteriorating conditions caused by his referendum call, and contrary to the democratic vote of the Greek people (twice)

    What actually happened here? Did he bluff big and get called, because from the outside, it looks like the EU won on every single agenda item.

    • H D says:

      It just depends on the VIX

    • senrex says:

      He never thought the Greeks would vote NO. He counted on a YES and then he could say the Greek populace had decided to stay in the EURO.

    • fotis2 says:

      Definetely a bluff gone wrong Greek goverment assumed the EU when faced with Grexit would fall all over themselves to pump more money in the country this strategy backfired big time.As an old Chinese wise man said ”Don’t base your assumptions on ZH articles”

    • Dex T says:

      The EU has known all along that they were in the stronger position.

      It’s clear that Tsipras favors being in the EU over his Marxist “principles”

      The question is if this deal will accepted by the Greeks? Or will they vote him out and start the process all over?

      • stmro says:

        Accepting the deal would crush the Greek economy from which there is no return. The few remaining viable Greek assets will be owned by an ‘independent’ fund under EU ‘supervision’.

        This is financial annexation of a sovereign nation. I don’t understand how anyone could accept these terms.

      • frommi2 says:

        Greek politicians like to earn € instead of drachme, so don`t you think they do everything to stay in the eurozone? Varoufakis is already rich, so he didn`t care.

    • bhuggs52 says:

      stmro, you make good points here. Looks to me like smoke and mirrors with Tsipras. Either he’s playing games with his own people, with their hopes for relief without further pain, and he really intends to institute more austerities–or he’s trying to pull a bait and switch with the moneylenders and he won’t ultimately adhere to any stipulations. However he plays it–definitely hardball. Come Wednesday, Tsipras and his fellow pols either apply the electrodes or say hello to fizzle-ville. The one thing I wouldn’t want to be today, a Greek politician or banker or citizen. Scratch that. I’ll be the guy who broomsweeps the Parthenon and then lunches on a humble gyro.

  6. kvilia says:

    Does anyone have a projection for the minor 1 of the intermediate iii of this uptrend? I was cautious to get neutral at the end of last week and now a little lost in terms of when to enter the long side. All input is appreciated!

  7. student8888 says:

    Mr. C, did u get an uptrend confirmation today? If so, are we in minute 3 of minor 1 of int. iii? Thx.

  8. NEWBIE says:

    Did the two gap ups change the masses back to Bulls looking for new highs? If so I like wave 1 at 2044 wave 2 today and wave 3 down to 1980.

  9. H D says:

    Like nothing even happened, honestly I thought they’d sell the BS story, whatever it was, either way. 2019P was so user friendly… Maybe next time.
    SPX, .618 back, scene of crime, +55 from the low at TD34. Using 2083.74, don’t want to see that overlapped if/when sellers test. 2104SPX above.

  10. lunker1 says:

    The number of times you posts does not increase the chance that your forecast is correct.


  11. NEWBIE says:

    Europe Closes in 10 min, lets see what USA does then.

  12. frommi2 says:

    Thx Tony for your view, i have changed mine. I looked at a lot of stock charts today and there are a lot of stocks that look like a big wave up is coming like GOOG or PCLN. Even AAPL doesn`t look that bad. So maybe the market turns now. 😀

  13. If you give a deadline of Monday as the EU did…then SOMETHING must be agreed to in order to give the right appearances.So this all about making Germany look like they re in control.I doubt that anything will fundamentally change even if the Greeks pass all this by Wednesday.Only the banks get a boost–nothing in it for the Greek people–just like the last 5 years.I suppose the Greek parliament could vote this down, but only if they had the qualities of ancient Greek gods…plus a few lightning bolts and hammers etc.
    Gold got a buy signal via its COT which is the most bullish since November.I ll add a little bit(dollar cost average) as there could be some shortcovering up to 1220.Goldfingers crossed.
    Shanghai up to 4200…then to 2500 my view.Good luck all.

  14. Monday numbers…
    Trend change with sustained move above 2087.34 (EOD) with Stop 2065.89 Target 2170.34

    For you fans of Rory Handyside; he posted this: “Island gap ups are not high quality trades… the gaps get filled often: http://thepatternsite.com/islandrev.html

    “The Greeks are witnessing a continuation of the (Ancient Greek) tradition that he who defaults on his debt automatically becomes a slave.” Taleb

    Yes, the real issue at hand (globally) is DEBT.

  15. berniebaruch says:

    Fundamentals. Fundamentals OR the market goes up 50 handles in a 2 days because the Germans somewhat agree to a plan to give a bankrupt country billions of euros for the third time and China willing to imprison and shoot anyone selling or shorting large blocks of stock.

    Hell, lets just go ahead and bring back Joe Granville!

    • NEWBIE says:

      Bernie, writing is on the wall this economic system is on the verge. Before the last crisis kicked off , we encountered the same thing, wild wild swings

      • Yep, been hearing that a lot lately butt up,up,up she go’s.
        Greek tragedies come and go a plenty, but are very soon forgotten (except by the bears), next up mkts will focus on earnings season.

        • mjtplayer says:

          Up, up , up? Not sure if you’ve noticed, but the DOW has been trading around 18k since Thanksgiving. So, I would call it going “nowhere, nowhere, nowhere”

  16. gary61b says:

    Good time for reversal and continuation down of “C” for new LL

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