weekend update


The market started the week at SPX 2023. After a big gap down Sunday night in index futures trading the market worked its way back up to open at SPX 2019 – the low for the week. After that the market rallied to SPX 2067 by Tuesday, then dipped to SPX 2046 also on Tuesday. Then after a gap up opening on Wednesday and Friday the market hit SPX 2097. Then dipped to end the week at SPX 2089. For the week the SPX/DOW gained 3.35%, the NDX/NAZ gained 3.85%, and the DJ World index gained 2.70%. Economic reports for the week were slightly positive. On the uptick: the CPI, building permits, the Philly FED, leading indicators, the WLEI, plus weekly jobless claims declined. On the downtick: industrial production, the NY FED, the NAHB, and housing starts. Next week’s reports will be highlighted by a FED governors meeting, Q3 GDP, the PCE and more Housing.

LONG TERM: bull market

The six year Cycle wave [1] bull market is currently in its fifth wave. Cycle wave [1] bull markets unfold in five primary waves. Primary waves I and II completed in 2011, and Primary waves III and IV completed this year. When Primary V concludes the bull market will end. Then a three wave, one to two year Cycle wave [2] bear market should follow.


Historically markets have lost between 45% and 50% of their value during Cycle wave bear markets. In example, 1937-1942 and 1973-1974. The 2007-2009 bear market was of a Super cycle degree, one wave degree higher, and the market lost 58% of its value. These kinds of events are nothing unusual during a bearish secular deflationary/inflationary cycle. On a positive note. After the upcoming bear market ends, the following bear markets for the next three decades will be much smaller in market loss.

MEDIUM TERM: uptrend

We are currently labeling the current uptrend, from the late-August SPX 1867 low, as all of Primary wave V. Over the past three decades, when the first uptrend, after a significant fourth wave, made new bull market highs, 83% of the time it was the last uptrend. While the market has yet to make all time new highs during this uptrend. We are taking the conservative approach with the expectation that this will occur. Project, monitor and adjust when necessary. Should the market fail to make new highs during this uptrend, Primary V should extend well into at least 2016.


With all these factors in mind we have been labeling this uptrend as follows: Major 1 (1993), Major 2 (1872), Major 3 (2116), Major 4 (2019) and Major 5 underway. Major wave 1 was quite swift and divided into five Intermediate waves: 1915-1880-1990-1948-1993. Major wave 3, however, took more than one month to unfold as it subdivided quite a bit. Major wave 5 only started on Monday, at SPX 2019, and has currently divided into just three waves: 2067-2046-2097. Thus far it does not look as quick as Major 1, but its waves are unfolding in a similar fashion. Remaining conservative we have labeled Major 5 as: Int. i (2067), Int. ii (2046), and Int. iii currently underway. Whether or not, Int. iii subdivides into notable Minor waves has yet to be seen. Nonetheless, we are expecting Int. iii to make all time new highs before it concludes. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 and 2145 pivots.


Now that this uptrend has completed four waves, and is in the fifth. We are able to make some additional calculations for a potential uptrend high, and bull market high. The previous OEW pivots, and potential upside targets, posted on the weekly chart still apply. We have uncovered, however, two additional pivots between the SPX 2131 and SPX 2198 pivots. These pivots are SPX 2145 and SPX 2170. You may have noticed this new pivot noted above.


Thus far we have only noted three important waves during the recent rally from SPX 2019: 2067-2046-2097. The first two we have labeled Int. waves i and ii. The third, from that SPX 2046 low, is Int. wave iii. It could divide into five Minor waves. Thus far, we have not noticed a division. But if it does they will be labeled Minor waves. Overall we are expecting Int. iii to make marginal new highs before it concludes. Then an Int. wave iv pullback, of 20+ points, should be followed with another new high for Int. wave v. That second new high could end the bull market. If you have not started thinking of a bull market exit plan, it is probably time you did. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2116 and the 2131 pivots. Short term momentum ended the week at neutral.


Asian markets were mostly higher on the week and gained 1.6%.

European markets were all higher and gained 2.5%.

The Commodity equity group were all higher and gained 5.1%.

The DJ World index continues to uptrend and gained 2.7%


Bonds remain in a downtrend but gained 0.1% on the week.

Crude is also in a downtrend but gained 1.8% on the week.

Gold remains in a downtrend too and lost 0.6% on the week.

The USD remains in an uptrend and gained 0.5% on the week.


Monday: Existing homes sales at 10am, and a FED governors meeting at 11:30. Tuesday: Q3 GDP, Case-Shiller and Consumer confidence. Wednesday: weekly Jobless claims, Personal income/spending, the PCE, Durable goods, the FHFA, Consumer sentiment and New home sales. Thursday: Thanksgiving holiday. Friday: markets close at 1pm. Best to your weekend, week and Holiday!

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

About tony caldaro

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241 Responses to weekend update

  1. Dex T says:

    No Chance of a recession according to Deutsche Bank- So go ahead and but those gift stocks for your stocking stuffers…

    Here’s why a recession is ‘several years away’

    Deutsche Bank’s chief international economist Torsten Slok says business cycles “don’t run on a clock.”

    “Slok doesn’t see a recession anytime soon. “We need some kind of shock, either from outside the U.S. – it could be a hard landing in China – we don’t expect that.””


  2. The main interesting thing I ve noticed today is HYG took a day off from its selling mode of about 5% in 2 weeks.At 82.84 i think a drop below 82.25 is a real warning signal.No HO today…yet-only because not enough highs.Another close one though.If that kicks in+a breakdown in high yield would send me a warning signal.

  3. tommyboys says:

    Oil/Fuel down big yet UPS is STIIL charging 30% fuel surcharges – tisk, tisk!

  4. manunidhi21 says:

    I Like This Man..

  5. frommi2 says:

    Major 4 not finished yet, just wave b of 4? Would make a better fit with RUT. But maybe QQQ has already finished Major 5/Prim5?

  6. Dex T says:

    In line with what rc was posting some weeks back. First losses since 2009.

    S&P 500 Profits Fall $25 billion in First Three Quarters of 2015

    “Profits from S&P 500 companies have fallen by about $25 billion in the first three quarters of this year, and a further drop is expected before the end of 2015 as energy companies battle with lower oil prices and a sharp rally in the dollar hits exporters”


  7. blackjak100 says:

    Here comes the pullback for minor 2 to 2077.

  8. gary61b says:

    Maybe we have seen the top of B for Primary 4, looking for C….or am I way behind the curve.

  9. mjtplayer says:

    No doubt about it, a holiday week, boring market action on super-light volume.

  10. Scott Ford says:

    Since Tony brings up the topic of an exit strategy for this market ending, I was curious how many others are in my situation with their 401k. I have the option of investing in several standard index funds, and several dated retirement options, as well as two different bond indexes. Without the option of sitting in cash 100%, what is the best way to minimize losses during the cycle 2 correction?

    I assume I need to invest in bonds 100%, and then quickly jump back in at the suspected market bottom? Can anyone help out this young investor, I have never had to plan for this type of thing as I only entered the job market in 2009. Any advice appreciated, thanks.

    • simpleiam says:

      Hi Scott. My 401k & Employer Roth Plan have about the same options you mentioned, and of course, no ability to short at all. What does your Money Market cash option yield? Ours is 3.25%, which isn’t bad.

    • phil1247 says:

      do you have cash available for 6 to 9 months expenses should you lose your job or are unable to work???

      that should be first priority….investing second

    • simpleiam says:

      Hey Scott. Since this is an investment question, all I can say is I’d rather preserve what I have, rather than lose it in a Bear Market. However, since you seem to be young (compared to my 60 yrs.), dollar-cost-averaging can be your friend, but IMO, it’s not that friendly when a Bear mkt. is expected to lose about 50% of it’s value. During this Bull, I’ve been hopping in and out and trying to miss the big downside, and have done pretty good, thus far. At my age, I MUST preserve what I have because I don’t have the years left to recoup it.

  11. simpleiam says:

    Afternoon Tony,

    Do you have any opinion, or intuition, regarding how the Retailers will do this Holiday season? Usually I do pretty well at gauging it, but not this year, for some reason. Just wondered what you think. Thanks!

  12. Good morning guys regarding SPX IMHO the line in the sand is 2093 .we go above this level and we are immedialtely on our way to new local highs .A failure right now would tell me we still have to consolidate further between 2082 and 2090 in my view Important support 2080

  13. Tony,
    A question.
    Assuming 2019 was indeed the end of P4.
    The labeling of the impulse up which follows is at the intermediate level which gives the potential for M5,P5, and the entire bull market to end well short of some previous projections you have made. You have also in the past mentioned the propensity for weak 5th waves in this bull market. However, given these views I have to ask how do we determine if the current labeling isn’t actually at the minor level rather than intermediate and that M5 and P5 still have a ways to go?

    • mjtplayer says:

      If we do trace-out an IH&S, the upside target would be roughly 2,180 in the ES, about 2,185 in the SPX. First things first, we need a drop to about SPX 2,070 for this to pan-out.

      • On the daily chart of the SPX there is a WV pattern (from the double bottom lows of 8/24 and 9/29) , which is bullish where as its’ opposite is the MA pattern that is bearish. Basically they are just IH&S and H&S patterns with 2 heads to make up the bottom of the W and the top of the M. Same calculations are used for them as well to estimate the target if they play out.

    • GYN LAB says:

      Good morning!
      I agree with this scenario – several patterns and retracement ratios point to 2070 pivot (high 2060s to be more specific) where 200dma provides support. I think 2065-2070 area should be a good support for a int ii retrace (or part of int iii of a smaller degree wave) and final test of 200dma in 2015 before a run at 2200 where the bull market will finally end as per Mr TC’s prediction.

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