Friday update

SHORT TERM: another choppy day, DOW -92

Overnight the Asian markets lost 0.2%. Europe opened higher and gained 0.1%. US index futures were higher overnight. At 8:30 Personal income (+0.1% v +0.3%) / spending (+0.1% v +0.4%) were reported higher, and the PCE was reported higher: +0.1% v +0.1%. The market opened three points above yesterday’s SPX 2089 close and immediately started to pullback. At 9:45 the Chicago PMI was reported higher: 56.2 v 48.7, and at 10am Consumer sentiment was reported lower: 90.0 v 92.1. At 10:30 the SPX hit 2084 and then tried to rally. The rally continued into the afternoon when the SPX hit 2094. Then around 2pm the market started to pullback again. Heading into the close the SPX hit 2079 and closed there.

For the day the SPX/DOW were -0.50%, and the NDX/NAZ were -0.45%. Bonds gained 4 ticks, Crude rose 35 cents, Gold slid $5, and the USD was lower. Medium term support drops to the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots. Today the WLEI was reported lower: 47.2% v 47.3%, and the GDPn was reported higher: 1.1% v 0.9%.

The market opened at SPX 2092 today, pulled back to 2084, then hit a new uptrend high at 2094. The market then declined to SPX 2079, after it was reported the FED was looking to add additional reserve requirements on the major banks. With the late afternoon pullback Minor wave 5 is starting to look a bit sloppy. We now have four overlapping waves: 2085-2063-2094-2079. Several possibilities at this point for Minor 5. Short term support is at the 2070 pivot and SPX 2059, with resistance at the 2085 pivot and SPX 2100. Short term momentum dropped to oversold after the negative divergence and ended there. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bull market


About tony caldaro

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27 Responses to Friday update

  1. torehund says:

    thAs much as I agree with Tonys analysis of commodities being in a decade long ++ bear market, don’t be too nearsighted. Imagine a currency plunging and the pricing of commodities in USD flatlining or just dipping slightly.
    Well thats the future of Europe, stagflation (worst seen ever), hunger and riots.
    The next wave of migration will be from Europe towards the US, and if Trump doesn’t need a wall, then Clinton already has a moat 🙂
    Many countries will blame the Dollar, blame America, and scream for Communism.
    Well thats not reasonable, its much more simple, its the ratio of productivity vs non producing consumers that determines the value of a currency. GDP may look nice, but if you have to see 10 different doctors to get a firm diagnosis, (and the 11th ends you :)), then your purchasing power has already been deflated..Thats hyperinflation or deflation, if you like…the former only happens when the country goes down the drain…
    Good weekend to Tony and the gang.

  2. Hello all,
    I’ve been away from the board for a few weeks.
    I am wondering if there are any here who are in the camp that the latest rally is minor c of int B of major 4?

    • aahmichael says:

      I’ve been in that camp ever since the 8/24 lows, and nothing that’s happened since has changed my mind. However, I’m not calling the decline off the May highs a wave 4, because I believe that the entire 6 year rally was a corrective B wave. Either way, we did a three wave move down to 8/24, and we’ve done a three wave move back up.

      • fishonhook says:

        That’s a brave call. A B wave that goes so high. Even Trader Joe has moved on and is now a P5 believer.

        • aahmichael says:

          A P5 requires an impulse wave. The October rally has not been an impulse wave.

          • blackjak100 says:

            How’s it not impulsive? Where’s the overlap?

          • aahmichael says:

            I have a couple of simple requirements that all impulse waves must adhere to.
            1.) SPX, DOW, and NYA must all be in impulse waves simultaneously.
            2.) No part of wave 3 can ever break the 1-2 trendline.
            In regards to item 1, NYA has a massive 4th wave overlap, thereby invalidating the impulse count. ( as a side note, I have seen Tony mention on here that he believes that the DOW is a broken index, and therefore he ignores 4th wave overlaps in the DOW, and calls the overlapped action an impulse wave anyway. However, I disagree with Tony on that point. IMO, the minute you say, “my count is correct, it’s the index that’s wrong,” you have entered into no-man’s land. You have tossed out all the rules of EW, thereby enabling you to count any wave anyway you want. In effect, it’s the opposite of being objective.
            In regards to item 2, the supposed wave 3 in all three indexes violated their 1-2 trendlines, and have spent the majority of their time underneath the 1-2 trendline, thereby invalidating the impulse count. In order to give the market all the benefit of the doubt, though, you could say that Wave 2 did not end at 1991, but actually ended later at 2017, as part of a running correction, however, even if you do that, that 1-2 trendline was broken on Friday’s close in the SPX and DOW, and was broken in the NYA on Tuesday of last week.
            So, the way I see it, counting from the 9/29 bottom, the market has put in 11 waves which can not be counted as a 1-2-3. Therefore, those 11 waves become a-b-c-x-a-b-c-x-a-b-c.
            The only alternative is to say that we did an impulse wave up to 2020 and everything after that has been a massive running wave 2. Time will tell.

    • lbhkinqa says:

      Yes still a possibility especially as P4 was very short. Presumably 2020 is the line in the sand. Below that int. iv will cross int. i and Tony will need an alternative count. (I assume if we do break 2020 the decline would be rapid and extreme. A market crash from slightly below 2020 to sub-1850 within days as everyone quickly adjusts back to the “P4 isn’t finished” count.) Hmmm a lot of “ifs”. Just a black swan tail event not a base case.

  3. gtoptions says:

    Thanks Tony
    5 weekly HH/HL’s time for a break. 😉

  4. fotis2 says:

    Thanks Tony bit of a messy one but it is what it is.GL ladies and gents and have a nice weekend all.

  5. skmcobra says:

    Tony, Why don’t you ever show a more short term chart with maybe only the last 30 days. Your 60min chart shows four months. I’d be interested in seeing your more short term wave projections.

  6. pooch77 says:

    217 points up and 20 down and we are OS??,,

  7. GYN LAB says:

    Good evening!
    Looking at the ES & SPX charts, Minor 5 is quite messy, hard to identify correct waves. The best that I can fit is this drop is wave iv of ED of Minor 5, with ED topping early next week Mon/Tues.
    Zooming out a bit, I still think the 1929-1893 is int ii, and this is completing int v of a Major wave (bull Major 1 of P5 / Bear Major B of P4) In any case I will look for short opportunities above 2100 early next week.

    • GYN LAB says:

      meant bull Major 3 of P5 !

    • nsteve24 says:

      Gyn, you see a 5-3-5 from 1872 for Bear Major B of P4?
      5 up from 1872: 1927-1894-1991-1972-2022
      then 3 down to 1991
      5 up from 1991: 2039-2017-2080-2058-2094

      • mnfandmno says:


        None of the waves from 1991 are extended. Most likely, only the 3rd wave finished at the extended target of 2094. 4th is going on and 5th up to follow soon.


      • GYN LAB says:

        I see 5 waves up from 1872: 1927-1894-2022-1991-?? with the subdividing 5th wave about to complete. For the Bear option, Major A from 2135-1867, B 1867-2021-1872-?? then C to follow below 1867 (ideally below 1830 looking at the ES) I just don’t see a natural way to count start of P5 from 1867 as the waves look forced for impulsive waves. But as I am a keen follower of Mr Tony C the Bull option I also consider, the only difference being that Major 3 seems to be completing now in int v. See image below for better understanding!
        Bull in blue: P4 complete at 1867 and in P5 Major 1,2 and 3 about to complete
        Bear in white: P4 still ongoing with Major B about to complete

    • skmcobra says:

      I completely agree with you Gyn on this being either 1 of P5 or B or P4. That’s where I’ve been for the past week+.

  8. mjtplayer says:

    Beginning to think perhaps minor 5 completed today at 2,094 and we’re falling in int iv

  9. This is a ‘live’ count. I don’t ‘know’ it is correct, but the evidence is : 1) we have just marginally higher highs, 2) there appears to be a ‘very long wave time-wise’ in the middle between the higher highs, possibly a triangle, and 3) the retrace, so far, is 50% – could go lower. We can re-draw the lower wedge line when we ‘know’ where (2) and (4) are if they form properly.

    The count would invalidate below the Origin marked ‘0’ – meaning we would be looking lower to some degree. On the Thursday update, I showed S&P 500 hourly within a wedge. This count would be a ‘wedge within a wedge’ – a fractal of the larger hourly wave. It is nowhere near proven, as wave (3) would have to make a new high, and failure to do so over the next two-three trading sessions would raise a red flag.

    SPX - Five Minute - Oct-30 1521 PM (5 min)

    Cheers and enjoy the chart.

  10. nsteve24 says:

    Thank you Tony

    bullish: int iii completed this afternoon at 2094, int iv target 2045 (Nov 10), int v or Major 3 back to 2094 (Nov 25), Major 4 target 2000 (Dec 17), Major 5 retest May ’15 high (Jan ’16)

    bearish: B wave completed today, C wave to 1750

  11. llerias7 says:

    Does minor 5 still lives?

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