weekend update


The market started the week at SPX 2075. After drifting lower on Monday the market declined, aided by a gap down opening, to SPX 2059 on Tuesday. Then the market rallied to SPX 2085 on Wednesday ahead of the FOMC statement. After the statement the market declined to SPX 2063, then rallied to a new uptrend high at SPX 2090 by the close. On Thursday and Friday the rally continued as the SPX hit 2094. Then a late afternoon pullback ended the week at SPX 2079. For the week the SPX/DOW gained 0.15%, the NDX/NAZ gained 0.45%, and the DJ World index lost 0.2%. On the economic front reports continue to be lackluster. On the uptick: Case-Shiller, personal income/spending, the PCE, the Chicago PMI, and GDPn. On the downtick: new/pending home sales, durable goods, consumer confidence/sentiment, Q3 GDP, the WLEI, plus weekly jobless claims rose. Next week’s reports will be highlighted by the monthly Payrolls report, the ISM’s and Auto sales.

LONG TERM: bull market

We have been expecting this Cycle [1] bull market to unfold in five Primary waves. A nine wave Primary I completed in May 2011, then an elongated flat Primary wave II ended in October 2011. Primary III extended for 21 waves and topped in May 2015. Then Primary IV was a three wave zigzag, alternating with Primary II, bottoming in August 2015. Since that low Primary V has been underway.


During the past three decades, a significant fifth wave has ended its longer term five wave pattern if the first uptrend makes new highs. If it does not make new highs, then the fifth wave itself divides into a five wave pattern of its own until the bull market concludes. The current uptrend, off the Primary IV low, is about 2% from the SPX 2135 high. Should that high be exceeded during this first uptrend, the bull market will likely conclude when the uptrend ends. The weekly chart above displays the potential price targets for the high of Primary V.

MEDIUM TERM: uptrend

While there has been some debate about where the recent Primary wave IV ended, and for that matter if it has ended at all. OEW is quite clear, and quantitative, in determining exactly where trends begin and end. This is one of the features that sets it apart from conventional EW analysis. There are many others. While the recent Primary IV August low may look a bit strange on the SPX chart. A quick glance at the DOW/NDX/NAZ displays a much cleaner pattern.


After the SPX 1867 Primary IV low the market continued to be quite volatile for the next month. The first rally off that low took only three days and hit SPX 1993. The activity that followed took three weeks and bottomed at SPX 1872. Primary V should unfold in five Major waves. We labeled the SPX 1993 high as Major wave 1, and the SPX 1872 low as Major wave 2. After that Major wave 3 kicked off to the upside, and is already approaching all time highs. When Major 3 completes, Major 4 should have a steep pullback and then Major 5 should complete the uptrend. Medium term support is at the 2070 and 2019 pivots, with resistance at the 2085 and 2131 pivots.


After the SPX 1872 Major wave 2 low we started labeling Major wave 3 with five Intermediate waves. Intermediate wave i unfolded in five Minor waves and completed at SPX 2022: 1917-1894-1992-1972-2022. After Intermediate wave ii declined to SPX 1991, Int. wave iii began. Thus far we have labeled four Minor waves complete, with the fifth underway: 2039-2017-2080-2059-2094?


When Minor wave 5 concludes it will end Intermediate wave iii. Then an Intermediate iv pullback should follow, similar to the Int. ii pullback. After it concludes, Int. wave v should challenge, or exceed, the all time high at SPX 2135 to complete Major wave 3. Then a sharp Major 4 pullback, largest since Major 2, should follow. After that a Major wave 5 rally should take the market higher, and probably end the bull market when it ends. Short term support is at the 2070 pivot and SPX 2059, with resistance at the 2085 pivot and SPX 2100. Short term momentum ended the week oversold.


The Asian markets were mostly lower on the week for a net loss of 1.8%.

The European markets were mostly lower as well and lost 0.6%.

The Commodity equity group were all lower on the week losing 3.3%.

The DJ World index is still in an uptrend but lost 0.2%.


Bonds may confirm a downtrend soon and lost 0.7% on the week.

Crude is trying to confirm an uptrend and gained 4.2% on the week.

Gold may confirm a downtrend soon and lost 1.9% on the week.

The USD is uptrending but lost 0.2% on the week.


Monday: ISM manufacturing and Construction spending at 10am. Tuesday: Factory orders and Auto sales. Wednesday: ADP, the Trade deficit, ISM services, Congressional testimony from FED chair Yellen, and a speech from FED vice chair Fischer. Thursday: weekly Jobless claims, and a speech from FED governor Tarullo. Friday: monthly Payrolls and Consumer credit.

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

About tony caldaro

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213 Responses to weekend update

  1. Dex T says:

    Bad news and bad financials don’t matter. This time it’s supposed to be different. As stated at the end of the article all that matters is to “Remain calm and carry on.” I wonder if the “strategist” who write these reports would “remain calm” if we didn’t pay them?

    Data be damned, Wall Street says all is well

    “Wall Street strategists who normally live and breathe data are now pushing a curious new narrative: Don’t believe the data. ”

    “More specifically, it’s become routine practice lately to disparage economic numbers as being not representative of underlying strength that the headlines just don’t seem to verify. ”

    “The dramatic drop in growth does not actually represent weakness in the real economy, but it is a result of a short-term and healthy adjustment by businesses in the inventories they hold,” McMillan said in a note. “Consumers continue to grow their spending, as does the government, and business is growing spending outside of inventories.”

    “The selectivity of that analysis is classic Wall Street, ignoring how the inventory overbuild helped inflate the second quarter’s growth of 3.9 percent and focusing instead on how it deflated the third quarter’s numbers. ”


    • Dex T says:

      and of course NONE of the Wall Streeters can actually identify the “underlying strength”.

      But they are 100% certain “it” is there

  2. mjtplayer says:

    The short-term count is a complete mess from the minor 4 low, but this is possible. Any thoughts?


  3. stephenk1980 says:

    If we close at these levels my bearishness evaporates. I’ve been waiting for today’s action to confirm a short, but it’s doing the opposite. Going to just remain in Forex for now I think…

  4. Page says:

    Markets will continue to go up until Friday then all hell breaks lose to the downside.

  5. mjtplayer says:

    Well, there it is, SPX 2,103. We’ve now officially retraced the entire plunge from Aug – back to the scene of the crime 🙂

  6. skmcobra says:

    Why does Tony only show to date on his charts. Projected potential wave patterns would be helpful.

    • tony caldaro says:

      this market has been too wild to estimate time

      • H D says:

        skm? What more “projected potential” do you need?

        ^ from them those words up yonder above…….

        “Int. wave v should challenge, or exceed, the all time high at SPX 2135 to complete Major wave 3. Then a sharp Major 4 pullback, largest since Major 2, should follow. After that a Major wave 5 rally should take the market higher, and probably end the bull market when it ends.”

  7. uncle10 says:

    Thanks Tony.
    Tboys is bullish and newbie is bearish the world is right😉

  8. mjtplayer says:

    Getting ever closer to SPX 2,100. -div on SPX hourly & daily RSI, volume sucks today – both hallmarks of a wave 5. All we need to do is tag 2,100 or a bit higher, 2,104 – 2,107 then have “turnaround Tuesday” kick-in to begin int iv

  9. phil1247 says:


    target 2101 spx

  10. johnnymagicmoney says:

    My two cents is since I started following this blog – that since the 1867 level this is one of Tony’s most accurate wave counting periods. I am being patient for 2120 or close to that before I start shorting again. based on what Tony says I guess we revisit one of the lows from last week (1960/1966) for major 4. Then Ill wait for Tony to give us a Major 5 prediction and set postions accordingly. They say don’t fight the FED. I say don’t fight the TONE! Thanks TC

  11. For nsteve24
    Thinking about $211 area for a Short-term SPY short, your thoughts?

  12. gtoptions says:

    Thanks Tony
    SPY ~ Breaking WR1 @ 209.47 ~ next WR2/R3 @ 210.45/212.04
    Looking at the weekly technicals, we may get that Single Wave P5 with minimal pullbacks along the way. GL All

  13. Gary Lewis says:

    Is this the 5 of 5 of P3? Or is there more boredom to come?

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