weekend update


The market started the week at SPX 2099. After a gap down opening on Monday the market quickly dropped to SPX 2068. After that it rallied into Wednesday and hit SPX 2087. On Thursday/Friday the market had two successive gap down openings and hit SPX 2022, before ending the week at 2023. For the week the SPX/DOW lost 3.65%, the NDX/NAZ lost 4.35%, and the DJ World lost 2.9%. Economic reports for the week were biased to the positive side. On the uptick: retail sales, business/wholesale inventories, consumer sentiment and the WLEI. On the downtick: export/import prices and the PPI. Next week’s reports will be highlighted by Industrial production, the NY/Philly FED, and Housing.

LONG TERM: bull market

The six year Cycle wave [1] bull market continues to unfold. Primary waves I and II, of this five primary wave bull market, completed in 2011. Primary waves III and IV completed this year in 2015. Primary wave V has been underway since the late August SPX 1867 low.


For the past 30 years, whenever a significant fifth wave up in a bull market has made new highs during its first uptrend, 83% of the time, that was the high of the bull market. What this means is that there is an 83% probability that the bull market high will be reached soon, if the current uptrend makes all time new highs.

We have had the potential targets for Primary V posted on the weekly chart for several weeks now. Depending upon how the current uptrend unfolds there is the possibility of one lower target than those already presented. It can not be calculated at this time, possibly during new week. With probabilities suggesting a potential bull market top approaching we continue to suggest preparation for the next bear market makes sense.

MEDIUM TERM: uptrend

The uptrend that began at the Primary wave IV, SPX 1867, low continues to unfold. Major wave 1, of five major waves, topped at SPX 1993. Major wave 2 had an irregular pattern and bottomed at SPX 1872. Major wave 3 recently topped at SPX 2116. And Major wave 4 has been underway since that high.


At the Major 3 high we have counted five Intermediate waves up from the Major 2 low: 2022-1991-2094-2079-2116. There was a possibility that the SPX 2116 high was only Int. wave iii. But when the market opened on Monday below SPX 2094 it eliminated that possibility.

We have been expecting Major 4 to be the largest pullback since Major wave 2, find support between the 2019 pivot range and SPX 2040, and take some time to unfold. Probably not as long as Major wave 2, which was over four weeks, as that was quite a volatile period for the market. Two weeks may be sufficient for a simple zigzag, a bit more time if it unfolds as a flat. Medium term support is at the 2019 and 1973 pivots, with resistance at the 2070 and 2085 pivots.


Major wave 4 is currently about two weeks old as it started a week ago Tuesday. The decline was quite orderly until Wednesday’s SPX 2087 high. We had counted three waves down from SPX 2116 for Minute a: 2090-2104-2084. A one wave bounce to SPX 2099 for Minute b. Then one wave down to complete Minor a at SPX 2068.

After that the market rallied three waves up to complete Minor b: 2083-2070-2087. Then Minor c kicked in to the downside and it has been quite swift. In just two days the market has dropped more than it had in the previous week. On Friday the SPX hit 2027, rallied to 2041, then hit 2022 just before the close. When this last decline ends we will have three waves down for Minor c.


With Major wave 4 now firmly in the support zone, a slight positive short term divergence, and oversold short term MACD, and an oversold daily RSI, we should see the end of Int. a or Major wave 4 soon. Short term support is at the 2019 pivot and SPX 1993, with resistance at SPX 2040 and the 2070 pivot. Short term momentum ended the week extremely oversold.

One item of note. Should this decline continue and overlap the Major wave 1 high at SPX 1993, then there is another pattern unfolding other than the one we are expecting. This could suggest a retest of the SPX 1867 lows. Be careful. Best to your weekend and week!


Asian markets were mostly lower for a net loss of 1.9%.

European markets were all lower losing 3.2%.

The Commodity equity group were all lower and lost 2.2%.

The DJ World index is still in an uptrend but lost 2.9%.


Bonds remain in a downtrend but gained 0.4%.

Crude is also in a downtrend and lost 8.5%.

Gold is in a downtrend as well and lost 0.7%.

The USD continues to uptrend but lost 0.3%.


Monday: NY FED at 8:30. Tuesday: Industrial production, the CPI and the NAHB. Wednesday: Housing starts, Building permits, and the FOMC minutes. Thursday: weekly Jobless claims, the Philly FED and Leading indicators. Friday: Options expiration.

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

About tony caldaro

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249 Responses to weekend update

  1. blackjak100 says:

    TC, is this really the start of the final wave of bull market? Hard to believe! Been quite a journey for me since I came here 3-4 yrs ago.

  2. Dex T says:

    The street back to its old tricks again trying to free itself to help throw the country into a depression. I guess swindling seniors is the “new” way to increase revenue.

    “This December could be Wall Street’s best chance in a while to roll back financial regulation. Judging from the amount of money the industry has been spending on lobbying, it’s preparing for battle.”

    “On Wall Street’s wish list: delaying a fiduciary rule designed to make sure brokers offer older folks unconflicted advice, and limiting regulators’ power to subject large financial institutions to extra scrutiny.”


  3. well today (as i write this) we have a bullish engulfing daily candle This is positive provided we have a nice close. we should likely tade higher fom here 2048 spx

  4. blackjak100 says:

    If anyone needed another buy signal, it looks highly likely we will get a VIX close below the upper BB.

  5. tommyboys says:

    These terror attacks have been pretty much reversal pivots seems every time. Almost as if the market is flying the finger square in the face of those MFs.

    • Dex T says:

      Has nothing to do with the attacks. It’s just technical bounce/ or start of wave 5 up or whatever.

      • Usually they sell the first day reaction surge.It IS a finger.I remember after 9/11 the traders said basically we won t sell off on a day like that.Patriotic buying.

        • Dex T says:

          “Patriotic buying” -sounds like the new catchphrase recycled to help the bull going. Stick to terrorism by keep buying equities!…

          Attacks and fighting have been raging for years.

          The attacks took place in Paris and ISIS and the fundamentalist Muslims are waging a cultural/civilizational war. I doubt that the jihadists are sitting at their terminals foaming at the mouth because the S&P is up instead of down.

        • tommyboys says:

          Yep I remember buying on 9/12 as well…Screw’em…

          • Dex T says:

            No I don’t Tommyboys. I just find the idea of buying stocks as a way to “get back” at terrorism to be absurd- even more so when it doesn’t even occur in the same country. If people want to donate money to French organizations or institutions or to the victims fine but buying unrelated companies or futures/etc… ??

            ISIS and co. have severe issues with many aspects of Western civilization and their involvement in the Middle East politics- they have been murdering and torturing people for all manner of reasons. Their attack on Paris was a statement completely unrelated to Wall Street.

          • tommyboys says:

            WHOA! Again you miss the point – lighten up Francis😉

          • Dex T says:

            So what is your point?

    • lunker1 says:

      well I bought UPRO Friday evening so F ’em!

  6. johnnymagicmoney says:

    Top 10 Thoughts for the Day

    10) The trend is your friend and Tony is so on right now that he is the trend. Therefore Tony is your friend

    9) No matter how much Tony offers his hand of friendship the doubt of some still give them alligator arms unable to extend theirs

    8) As far as I am concerned the market should be up. Its another way of saying F U to ISIS

    7) Speaking of martyrs if you think there are a hundred virgins waiting for you think again. The only thing that awaits for you is getting your salad tossed in hell by a 100 angry horny convicts.

    6) I can’t see V going that much higher than 2135. Begining to wonder whether the bear starts in 15 or 16. Should I flip a coin?

    5) I swear at the bear for I am full of the bull (for now).

    4) That being said this market is still a joke.

    3) AHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH (That was Abe doing a monetary Kamikaze even though he knows his economy is fuked).

    2) Wondering if a conversation is going on today such like this …..”Ah Mr. Ackman are you there, are you there, are you there” (with a sharp loud bang in the background)

    1) Think of all the money we are all going to make when V ends. I am getting excited!!!

  7. manunidhi21 says:

    Namaste Tony!
    what will define 2019 was major 4, a cross abv 2070 or your love 2085 ?

  8. rc1269 says:

    market-implied odds of a December rate hike have trickled back down 6% over the last 10 days. fwiw. now stands at 64%

  9. phil1247 says:

    extension short has broken

    looking to buy pullback …

    TONY…..looks like you have done it once again

    kudos too numerous to elaborate

    thanks for your great analysis

  10. purplember says:

    minute waves
    wv1 2019 to 2033
    wv2 2033 to 2023
    wv3 2023 to 2042 ??

  11. johnnymagicmoney says:

    May have been early at 2030 Friday but Ill take it. Went short at 2110 and went long again at 2030. Looking for V targets to determine my exit once again.

  12. looks like 2070 by Wednesday. grinder up

  13. torehund says:


    ..the religious War that nobody talks about. Saudi Arabia against the Iranian friendly Houthies.
    As the BDI is testing lows, there are triggers around the Suez-canal to reverse it.

  14. Dex T says:

    If anyone was waiting for UBS’s approval then go right ahead and buy. S&P has almost no chance of hitting 1750 next year according to them!

    “UBS’ is out, and the firm has a year-end S&P 500 price target of 2,275. A drop down to 1,750 next year that would effectively end the bull market is “quite improbable”, in the firm’s view.

    “In a note to clients on Tuesday, equity strategist Julian Emanuel and team wrote that a positive market reaction to interest rate hikes (which they think will first happen in December) would be the biggest upside risk for stocks.”


  15. H D says:

    Nice Pivot Tony. Very user friendly 2019 has been. So last years major 4 of PIII was an irregular, about 4.5% and major 2 was sharp. This year major 4 of PV was sharp 4.5% after irregular major 2. Does that lower PV to 21(55)-21(89) ish?

  16. simpleiam says:

    Indices just sitting still, more or less, waiting for whatever else is going to happen.
    The prices of WTI & Brent are ominous. Not good at all…

  17. blackjak100 says:

    Textbook volatility just like only 2 times in last 5 yrs when put/call ratio was > .97 & less than 10% of stocks trading above 10dma (5% as of Friday). still expect resolution to upside.

  18. phil1247 says:

    bailed out of my ill advised 10% long from friday near breakeven

    ext short has traded this am

    until i t breaks its going to be tough going on the upside

  19. gary61b says:

    If TF below 1126, it should fall to 1100 without much resistance

  20. Typical market reaction if there ever was one …actually a little less at this point than i thought.Gold was up $11 now $3.Naz rolled negative pretty quickly.Retest 2020 and up again?

  21. mjtplayer says:

    Looks like 2,019 was it for this drop, the question now is was that int A of major 4 or all of major 4??

  22. phil1247 says:

    bearish below extension short at 2038 es

    gap down sun nite then rally

    key is whether it can hold .618 from low sun nite at 2008

    if ext short completes target ..cash spx will overlap tonys proposed wave 1 peak and then this last wave would not be a 3 but the target is right at 50% retrace of that wave

    will have to see what cash spx looks like after open

  23. Re Jan opex…..this will be a lotto month imo….there are 59,255 spy 225.00 put contracts in the money currently at $23.32 while there are 356,136 call contracts currently at $0.07…..imo market makers are going to move the market to that level or close to try and kill the put premiums and increase the value of the calls…who holds those cals? market makers? it may be one heck of a lotto play…imo also this should tie in with Tony’s count for major 5…..gl! https://onlineint.optionsxpress.com/OXNetTools/Chains/index.aspx?SESSIONID=

  24. re monthly opex…Dec looks like there are large option interest and premium in the 205…206….207….208 levels with the the 210 area most likely target with 51,000 put contracts in the money at $9.39 while there are 223,020 calls currently at $.98….feel this will be the target by market makers….next jan… https://onlineint.optionsxpress.com/OXNetTools/Chains/index.aspx?SESSIONID=

  25. Last Monday i posted a link to an option chain re Nov monthly opex….predicted we will see spy $200 due to the large volume of spy calls at 200 strike….looked again today and i still think we will hit that number this week but also want to draw your attention to the fact that there is large premium on the 197 and 195 strike areas…so thinking there is a good possibility they may take us lower to try to destroy those levels then possibly bounce to higher levels later this week like the 205 or 206 area to destroy premium built up from major 4 decline….. for major 5 i’ll post info and links next….. https://onlineint.optionsxpress.com/OXNetTools/Chains/index.aspx?SESSIONID=

  26. ekr123 says:

    This simple question is for anyone, but how do you define MACD as oversold?

  27. argento1 says:

    Thanks Tony for an excellent review!

    Sometimes you just need to think how the funds are managing their quarterly and year end figures and it gives you clues on what mr market is up too….going into a very seasonally bullish period so IMO I just don’t think they are going to drive her down more…lot of people calling it for this bull but usually then she surprises!

    After such a bearish OPEX the trend reverses so I expect a V shape run into beginning of December (Int B?), then seasonals should take her down again (first 2 weeks of December) for possibly Tony’s Int C wave of Major 4, then we have very ideal setup for the Santa rally and an overshoot to finally top in January 2016!Breadth and small-mid caps divergences already sending out a warning signal!

    Price will be my guide but normally with such a Monday recovery on the futures market it signals a significant bottom!On the Nasdaq we had a very strong high momentum top and bullmarkets does not normally top like that…


  28. fotis2 says:

    DAX DB after hours target 10750

  29. soulsurfer says:

    Thanks tony, for once again a great update!!

    market indeed at a cross roads:


  30. S&P initial downward target is 1540.

  31. M1 says:

    No changes. The count remains intact.
    Here the charts

  32. epgre says:

    I don’t know if Caldaro or any of you guys noticed, but Major wave 4 cannot fall below 2020 because wave 4 can’t overlap wave 1. The S&P is only 3 points away from that. Check out my blog.

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