weekend update


The week started at SPX 1951. After a gap up opening on Monday morning to start the week, the market made higher highs and lows every day ending the week at SPX 2015. For the week the SPX/DOW gained 3.5%, the NDX/NAZ gained 2.5%, and the DJ World index gained 4.4%. Economic reports for the week continued their neutral to negative bias. On the uptick: wholesale inventories, the WLEI, GDPn and weekly jobless claims improved. On the downtick: ISM services, consumer credit, export/import prices, the MMIS and the trade deficit expanded. Next week, a busy week, we get Industrial production, the FED’s Beige book, and Retail sales.

LONG TERM: bull market

We continue to count this six year bull market as Cycle wave [1] from the SPX 667 Super cycle low. Cycle wave bull markets unfold in five primary waves. Primary waves I and II completed in 2011, with Primary II taking the form of an elongated flat. Primary III completed in May 2015, and Primary IV probably completed at the August lows. If not, it will likely extend for a few more months, due to alternation, before it does complete. Primary V is now the main focus, because when it ends so does the bull market.


The day after the SPX 1872 retest of the August SPX 1867 low we posted two possible counts. Primary IV ended in August and Primary V is underway, (hourly/weekly charts), and Primary IV may still extend for a few months longer to satisfy P4 v P2 alternation, (daily chart). The deciding factor, as noted, would be determined by the current uptrend. Should the uptrend impulse higher Primary V is underway. If not, Primary IV continues. The current uptrend clearly appears to be impulsing. With the SPX 1867 low in mind we posted some potential targets for Primary V. They are noted on the weekly chart above.

MEDIUM TERM: uptrend

The main advantage of OEW over EW is that it quantifies all medium and long term waves. We can’t just place a label on the weekly chart because it looks right. We can only place labels where there are actual, quantified, turning points. This does not mean we always know where the market is heading in advance. No one does. What it does provide is a view of the most obvious future path of the market medium and long term.

Just after the late-September SPX 1872 retest of the low OEW confirmed an uptrend. As noted in the previous section, this suggested two possible paths. We somewhat favored the Primary IV low in late-August, because this would satisfy the P4 v P2 alternation now. This is why we posted that count on the hourly/weekly chart. Despite the mixed signals from other indices and indicators, the DOW/NDX/NAZ clearly displayed the potential for the low in August.


Since this uptrend had quite an odd, and somewhat confusing, beginning we will explain the count. From the SPX 1867 low the market rallied quickly in five waves: 1915-1880-1990-1948-1993. We had labeled this Major wave 1. Then Major 2 went into a long extended corrective pattern: 1903-2021-1872. We labeled this as an irregular zigzag. Does it look right? No. But that is the pattern the market presented.

When the market started to rally off the SPX 1872 low it started off with a similar irregular pattern, but on a much smaller scale. The market rallied to SPX 1917, then did an irregular flat for the pullback: 1897-1927-1894. After that it advanced to SPX 1992-1972-1999 by Wednesday this week, completing another five waves up. Clearly this uptrend is looking impulsive. More on this below. Medium term support is at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots.


With Major wave 1 @ SPX 1993 and Major 2 @ SPX 1872, Major wave 3 has been underway. Thus far we can count five waves up from SPX 1872: 1917-1894-1992-1974-1999. We have labeled this Int. i of Major 3. Then we labeled the pullback to SPX 1976 as Int. ii. Intermediate wave iii should now be underway from that low. When it completes, there will be an Int. iv pullback, then an Int. v rally to complete Major wave 3. We will count the waves, and note them on the daily updates as the uptrend unfolds. Thus far Int. iii has rallied to SPX 2020 in just one wave from the SPX 1976 Int. ii low. There should be five waves up before it concludes.


Short term support is at SPX 2000 and the 1973 pivot, with resistance at the 2019 pivot and SPX 2040. Short term momentum ended the week just above neutral. Best to your trading!


The Asian markets were all higher and gained 5.3%.

European markets were all higher and gained 5.0%.

The Commodity equity group were all higher too and gained 8.4%.

The DJ World index is uptrending and gained 4.4%.


Bonds remain in an uptrend but lost 0.7% on the week.

Crude is uptrending and gained 8.7% on the week.

Gold is uptrending and gained 1.6% on the week.

The USD is also in an uptrend but lost 1.1% on the week.


Monday: a speech from FED governor Brainard after the close. Tuesday: Budget surplus. Wednesday: the PPI, Retail sales, Business inventories and the FED’s Beige book. Thursday: weekly Jobless claims, the CPI, and the NY/Philly FED. Friday: Industrial production and Consumer sentiment. Best to your weekend and week!

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

About tony caldaro

This entry was posted in weekend update and tagged , , , . Bookmark the permalink.

202 Responses to weekend update

  1. fotis2 says:

    Ok what a tiring day looks like its trying to double top will know tmrw.

  2. rc1269 says:

    and the hedge fund unwinds begin – Fortress Macro Fund closing down

  3. Jim Guthery says:

    I wish I had the balls to buy uvxy but wow getting hit hard when market is barely up?

  4. GDX may drop to 14.50 to fill gap that was just initiated a week ago.Some are saying we blast through that for a final selloff.I m leaning that way.Have thought big gold run starts Jan 1st.Good luck all.

  5. H D says:

    potential symmetry 2006 SPX, slow day though. Must be news on deck.

  6. Dex T says:

    Interestingly enough a majority of economists still see the Fed raising rates- in December.
    I don’t believe it anymore but it would coincide with Tony’s P5 top.

    Economists still expect rate hike before end of 2015

    “Meanwhile, 14 percent of the panelists said they think the Federal Reserve will begin a cycle of short-term interest rate increases starting at its October policy meeting. Another 65 percent expect a hike at the December meeting. Sixteen percent expect a hike in the first half of next year, and 2 percent predict a hike in 2017 or later.”


  7. The Dow Jones Industrial Average has just upwardly overlapped as below. We can take option six (the simple i, ii, iii, iv, …) count, which we said had a ‘high risk’ of invalidation off the table…leaving us with a Fibonacci five options from the weekend post in the blog.

    DOWI - Intraday - Oct-12 1134 AM (4 hour)

    Cheers and enjoy the chart.

    • H D says:

      6 counts? did we talk about the impulse down a few weeks ago? There was no way to make that first wave a 5. JMHO.

      • So, maybe you prefer the real-time version of what I am doing, shown below, using Bill Williams methodology. Just one count .. 120 – 160 candles.

        ESZ15 - Primary Analysis - Oct-12 1410 PM (30 min)

        While this may be easier to see, understand, and understand the rationale, for it; in my mind it does not detract from the pictures which show the ‘possible’ universe of counts so people might see some they did not think of. Chart is current as of 5-minutes ago.

        • H D says:

          Thx ET, really appreciate the discipline and professionalism you trade with. You’re well read too. My point was there are better methods to eliminate a count than just price overlap weeks later.

          Someone will have to work pretty hard to break the new 6 count record now. Is 7 even possible?:mrgreen: all in good humor, slow day.

  8. Seems like it would be easier for the market to take if S&P filled the 1950 now, rather than from 2100 or higher.As I put on here before, not a mattet of if, but when 1950 gets filled.Since 1990 all weekly gaps were filled the next week except two, which went 6 and 7 weeks respectively.Just waiting to see what will be the catalyst…I say Chinas GDP.Oct 19th.

    • EL MATADOR says:

      Well if the 1953 Pivot don’t hold up there is a whole lot of air below that pivot

      • H D says:

        r u still tracking the ’11 fractal?

        • EL MATADOR says:

          I’m tracking it only in terms of time not price. There is still some validity in terms of time but price we should expect a big surprise. In terms of price, IMO the W5 wave structure did alternated as was expected. No doubt Mr M is in huge inflection point with lot of forces at work from both bears and bulls. I’m still trying to get my hands around where the vacuum price points are cuz once we enter the vacuum zone it’s just going to keep going. And it’s going to be up or down. The market appears to be expecting a lot more “meaningful” QE from the CB’s. Not sure who the QE Cupid will be but my bet would be the Japs will cave first. China don’t count they been QE-ing since their market crash and has not let up. We know the Japs govt has huge stake in stock holdings so they have the most to lose if they don’t act.

      • It will be interesting, but many times the market goes a little past a trendline–getting everyone to think some big break is happening, but then reverses.I m agnostic right now about what happens at 1950…total coin toss.

Comments are closed.