weekend update


And a wild week it was! The market started the week at SPX 2012. After dropping down to SPX 1993 on Monday. The market rallied, with two gap up openings, to 2077 on Wednesday right after the FED increased rates 25 bps for the first time in 9.5 years. Thursday, however, the market headed right back down again. And with Friday’s gap down opening it traded as low at SPX 2005. For the week the SPX/DOW lost 0.55%, the NDX/NAZ lost 0.35%, and the DJ World gained 0.1%. On the economic front this week’s reports came in mixed. On the uptick: building permits, housing starts, leading indicators, the WLEI, plus weekly jobless claims improved. On the downtick: the NY/Philly FED, industrial production, capacity utilization, and the NAHB as manufacturing continues to lag. Next week’s reports will be highlighted by Q3 GDP, Personal income/spending, and more Housing reports.

LONG TERM: bull market

After completing four Primary waves from the March 2009 low, the market launched the first uptrend of Primary V. Since it did not make new highs we are expecting Primary V to divide into at least five Major waves. Primary waves I and II completed in 2011, and Primary waves III and IV completed in 2015.


After the uptrend topped at SPX 2104 in early-December the market entered a downtrend. We have labeled the uptrend Major wave 1, and the downtrend Major wave 2. When the next uptrend, Major wave 3, gets underway the market should be making new all time highs.

MEDIUM TERM: downtrend resumes

The uptrend from the Primary IV SPX 1867 low unfolded in quite an unusual pattern. First there was an Intermediate wave one to SPX 1993, then an irregular Intermediate wave two zigzag to 1872 (1903-2021-1872). This was followed by a very strong Intermediate wave three rally to SPX 2116. Then another oddity occurred. After an Intermediate wave four pullback to SPX 2019, Intermediate wave five failed to make a higher high (a fifth wave failure). The NDX/NAZ, btw, do not display this fifth wave failure. After the failure a new downtrend was underway.

The downtrend started off, ( see hourly chart), from the SPX 2104 high, with a quick selloff to 2042. Then a just as quick rally to SPX 2092 followed. We had labeled these two waves Intermediate waves A and B of the Major wave 2 downtrend. With simple Int. waves A and B we knew a complex Int. wave C would follow, and it did. During this decline there was a corrective structure to SPX 2038, a three wave rally to SPX 2068, then another corrective structure to SPX 1993 on Monday. At this point we thought the downtrend ended at SPX 1993, as it hit the first of our three Major 2 support levels: SPX 1992/93, the 1973 pivot and the 1956 pivot.

The rally that followed, into Wednesday, was quite quick as the SPX hit 2077 right after the FED announced the rate increase. The structure of this advance looked fine, as there appeared to be five waves up to SPX 2060, and a pullback to SPX 2042. After that the market rallied in three waves (corrective) to 2077, and then started its Thursday/Friday decline. This kind of market activity looked quite similar to the start of the Major wave 1 uptrend, and even the start of Intermediate wave three. If this pattern had not appeared lately we would have thought the downtrend was continuing.


Friday’s activity, however, suggests the Major wave 2 downtrend is not done. The count we were using looked fine up until Friday. Now it appears the SPX 1993 low was only Intermediate wave A, and the rally to SPX 2077 Int. B, with Int. C currently underway to end Major wave 2. The market could have held that irregular pattern. But now it appears it will/has not, as noted in the above daily chart. Medium term support is at the 1973 and 1956 pivots, with resistance at the 2019 and 2070 pivots.


With the updated count we now observe a complex Intermediate wave A to SPX 1993, followed by a simpler corrective rally to SPX 2077 for Intermediate wave B. A likely less complex Intermediate wave C is currently underway. From Wednesday’s SPX 2077 high we can count seven waves down into Friday’s SPX 2005 low: 2048-2059-2018-2028-2013-2024-2005.

Due to the complexity of Int. wave A, this Major 2 downtrend offers several possibilities. Int. C could complete at SPX 1992/1993 forming a flat. Int. C could equal Int. A which would create support at the low end of the OEW 1973 pivot range. And, Int. C could divide into a zigzag of its own which should find support in the upper end of the OEW 1956 pivot range. When Major wave 2 concludes a Major wave 3 uptrend, to new all time highs should begin.


It is interesting that last weekend we were looking at these three levels of support, and after all the gyrations this week we are right back here again. Short term support is at SPX 1992/93 and the 1973 pivot, with resistance at the 2019 pivot and SPX 2042. Short term momentum ended the week with a very slight positive divergence.


Asian markets were mostly higher on the week gaining 1.5%.

European markets were all higher gaining 2.4%.

The Commodity equity group were mixed losing 0.6%.

The DJ World index remains in a downtrend but gained 0.1%.


Bonds are now downtrending and lost 0.5% on the week.

Crude is also downtrending but gained 2.0% on the week.

Gold is still in a downtrend and lost 0.8% on the week.

The USD continues to uptrend and gained 1.2% on the week.


Will be only 3.5 days of cash trading, markets are closed 1/2 Thursday and all of Friday. Tuesday: Q3 GDP (est. +2.1%), the FHFA, and Existing home sales. Wednesday: Durable goods, the PCE, Personal income/spending, Consumer sentiment, and New home sales. Thursday: weekly Jobless claims. Best to your weekend and week, and happy holidays!

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

About tony caldaro

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311 Responses to weekend update

  1. fbqueen3 says:

    Maybe wave iii starting?

  2. Peter Sliney says:

    This is probably old news to most of you but it’s a good reminder of how easy it is/was to manipulate the market. http://www.cftc.gov/PressRoom/PressReleases/pr7156-15

  3. johnnymagicmoney says:

    My general observation not looking at all the squiggles is this move today is super weak especially in light of Thurs/Friday. Rally cant hold squat today

  4. Cia Tony one question : How did you came to the conclusion that the MACD green line on your hourly SPX chart must be put right there? over the years you have adjusted it? in any case i love it:)))

  5. phil1247 says:

    protect short profits at 2006


  6. xuwu992000 says:

    $$$ Twilight BOT trading alert: half-hour selling signal triggered, 20+ points selling ahead in two-three hours. To 1988 key point.

  7. Regarding FCX 6.16 ,it’s in a strong downtrend since 2011 and trading below 2008 lows .Carl Icahn bought for 1 Billion $ of his own money shares. I highly doub he will be in trouble i in a couple of years .He certainly knows much more than anyone else about the company. In a couple of weeks months i think FCX could go as low as 3$ but the upside is simply enormous….. + 50$ patience is the name of tghe game my cents

  8. ABchart says:

    IMF about Oil: Iran supply may reduce prices by 5/15$B.

    • fionamargaret says:

      …think UWTI is a buy at 3.50, with maybe RUSL on the side…..

      • ABchart says:

        Miss Fiona,

        Since the FED hiked rates, I think the Oil headed to 25$ and later to 18/20$. The weekly positive divergence will only provoque some bounces of about 10/15% time to time.


  9. Bulls have most of the short term charts pointing up now… they need to get going soon or risk losing there momentum. If that happens the bears could take back control tomorrow. Really need to see the market rise by the close today I think, or the bears could take us back down to a lower low tomorrow.

  10. timmy321 says:

    Tony, do you have any thoughts on MSFT? How high it can go? Looks like it has embarked on a strong uptrend just as FB started its uptrend after the pivotal earnings report 2 years back with mobile earning being the catalyst. It seems for MSFT it is the cloud earnings that has been the catalyst.

  11. Bonjour AB

    تمويل دولي. لماذا منتدى حول التمويل لا تكون الدولي أيضا؟
    منتدى للنقاش مثل حفل استقبال حيث الضيوف من جميع أنحاء العالم. والهدف هو التعرف والمشاركة والتعلم، ولماذا لا اللغات والثقافات. الانترنت هو فرصة للعالم. ونحن على اتصال إلى أخرى دون أن تترك مكتبنا أو غرفة المعيشة لدينا.
    ربما زار المنتدى توني بأكثر من 100 جنسية. وأنا أعلم أنه كان لي في الأسبوع لمدة 15 عاما (1998> 2013) والزائرين بلدي في كل مكان. وتحدث بعض أعضاء عدة لغات وكانت موجهة إلى الآخرين بلغاتهم. جعلني سعيدا لأنه تم استبعاد أي شخص بسبب أقل اللغة الدولية في غير الإنجليزية.
    بعد كل شيء، التحليل الفني هو لغة مشتركة.


  12. ekr123 says:


    I came across this 11/12 article on copper by Tom McClellan calling for a near term seasonal low. Sure enough on 11/23 spot copper finished what looks like a capitulation move, as daily RSI reached 14 —> lowest reading I can see on record. Also noteworthy,
    – Monthly RSI in spot copper dipped below the 30 level in Nov and has now seen a crossover back above the 30 line.
    – Freeport Mc (FCX) is trading right at its Dec ’08 lows
    – Weekly RSI in FCX has been forming a bullish divergence since the January’15 lows.

    Anyone have input on wave counts w HG1 or FCX?

  13. manunidhi21 says:

    Namaste Tony!
    Once I thought reading your comments by “Ctrl F” on my mobile that am I reading Tony’s Spanish/French blog ?

    • ABchart says:

      Bonjour Manu.

      La Finance est internationale. Pourquoi un forum sur la Finance ne serait pas international lui aussi?
      Un forum de discussion, c’est comme une réception où les invités sont du monde entier. L’objectif est de faire connaissance, échanger et apprendre et pourquoi pas les langues et les cultures des autres. Internet est une chance pour le monde. Nous sommes connectés aux autres sans bouger de notre bureau ou notre salon.
      Le forum de Tony est probablement fréquenté par plus de 100 nationalités. Je le sais car j’ai eu un forum pendant 15 ans (1998 > 2013) et mes visiteurs étaient de partout. Certains membres parlaient plusieurs langues et s’adressaient à d’autres dans leurs langues. Ca me faisait plaisir car personne n’était exclu du fait de sa langue moins internationale que l’Anglais.
      Après tout, l’analyse technique a un langage commun à tous.

      Joyeux Noël!

      • quantmaven says:

        Je suis d’accord avec ABChart. nous pouvons échanger dans la langue de notre choix sur ce forum. Il faut que les membres fassent preuve de tolérance.

        • ABchart says:

          Joyeux Noël Quant😉
          Le temps est spécial en France cette année car il fait 15 degrés à Paris, et même 22 degrés dans certaines villes du sud. D’habitude, en cette saison, il fait -5°
          C’est le cas chez vous aussi?

          • quantmaven says:

            Effectivement c’est une saison hivernale plus chaude que la normale. Ils annoncent près de 16C pour le jour de Noel à Montréal ce qui est tout à fait exceptionnel. Il n’y a que la neige artificielle qui tombe de la boutique Guerlain sur les champs élysés qui fait un semblant de festivités haha!

          • manunidhi21 says:

            Hi AB/Quant..
            I myself speak 4 languages..learning a little bit french from my daughter as we moved to Canada in 2012. I think my comment was on a lighter note but seems read otherwise..Apologies if so.

      • chrisk44342 says:

        Heureux que vous êtes ici . La réalité est qu’il est trop gênant pour traduire votre langue dans quelque chose que je comprends . Donc, par tous les moyens , converse en français , mais je pense que la plupart ne répondra pas .

  14. gtoptions says:

    Thanks Tony
    SPY ~ WPP @ 202.78 ~ WS1 @ 199.47
    So far stuck in the middle, building +/div rsi.
    GL & Happy Holidays.

  15. quantmaven says:

    Anyone see it this way?
    1993 retest is most likely but going lower I’m not sure, we will have to see.

  16. phil1247 says:


    targets at 1980

  17. SPX 2017 second Bearish harami in a row on the hourly chart. :%hours also bearish . Caution for anyone who’s long…..

  18. It s POSSIBLE that a decent $20+ day in gold leads to another $100 up.1175?Would be nice.Just wondering if the start of rate increases will be golds cue to start pricing in the end of the bull (at some time)in equities.Gold sure didn t like lower rates.Good luck all.

  19. ABchart says:


    ES: support 2005. Still bullish to 2021.75 but LLs in the coming days.

    • mjtplayer says:

      Thanks Red – sorry to hear about your cat.

      My wife and I are about to join you in sadness, our cat of 18 years is in really bad shape and probably won’t make it to the end of the week 😦

      • Ahhh… sorry to hear that. My cat was only 13 1/2 or so. I wish he would have made it to 18, but I was happy to have had him as long as I did. They usually like to go off someone and die by themselves but Sampson died right beside me as I watched the last breath end and his stomach no longer move. It was very hard but at least he didn’t die alone. You’ll have to make that decision with your cat too I’m afraid as he/she will certainly try to go off somewhere and hide.

    • torehund says:

      Red, 1940 seems to be the Complex 3 bottom. World War 2 number that may finally bring something good upon itself. Nice lines you have made there.

      • I think we’ll get to that number, and lower, but not this year. Last Thursday and Friday they did a lot of damage to the bulls and got a ton of bears on board. It’s just my opinion of course but I think they did that on purpose so they could avoid a move down to 1940, which was certainly looking possible in the charts.

        I suspect the low we had Friday will hold the rest of this year. But late January should be ugly I think, with bears in control from around the 9th or so until the end of the month. In fact the whole first quarter of 2016 should be ugly. Then a summer rally of course…

        • Dex T says:

          Do you have targets for end of year and early next year?

          • That falling trendline coming in around 2065 this morning on the ES Futures would be my first upside target. It’s now fallen a bit lower. It’s around 2070 currently on the SPX. After that area it hit (should be this week I think) I’ll re-look at the charts to see but do keep in mind that it’s common for some light selling the last 3 days of the year.

            So starting on the 28th/29th there could be another move down. Shouldn’t be huge though. This all assumes we don’t just tank all week but usually we get some kind of move up before Christmas. After all, you don’t want to scare sheep before they spend all that money buying worthless presents. LOL

  20. blackjak100 says:

    $SPX cash open = +12ish as of now. A reason to think a LL is coming and if you’re a bull (like myself), I would want to see it this AM. The good news is 5 out of those 12 closed higher and would be a must for the bull case.

  21. jeffbalin says:

    The weekend update is so helpful. Thank you Tony!

  22. budfox9450 says:

    It’s Monday morning, the SP futures found a low at 1993, and
    now 17-18 pts higher. Appears, the OEW Major W2 Low is in place.
    At minimum, we have an XMAS rally underway…..Bud 12/21

    • Unless! Mr. Paul Harvey comes out and says it’s all mistake!

      Christmas Magical Time For Markets!

      Long is best bet!

      • Mr. Steve Harvey!

        My mistake, I take full responsibility. Folks!

        • YouTube will be busy today…I turned the show on and thought it was a joke.That s what happens when you don t rehearse.THEN after that–at the same hotel,someone goes tearing down the street with a car.First thought-Steve Harvey trying to get the hell out of there…but it wasn t.
          With the markets up and oil down,let s flip an hourglass over and see how long this rally continues as oil sinks.It might…but the odds are against it.PPT needs to step up into the oil pit to ensure a Christmas rally.Good luck all.

    • blackjak100 says:

      Foxbud, I thought you were bearish per your BoYu indicator? Now, you are claiming defeat and labeling a 2005 OEW Major W2 low? Implied cash open as of now is only +12ish. GL and Happy Holidays!

  23. ko68 says:

    5 waves down completed in XLE?

  24. torehund says:

    Bunker fuel accounted for 70 percent of voyage costs for ships in dry bulk, as of Jan 2015. Oils decline is now starting to be significantly beneficial for the shippers. One persons dream is another persons nightmare, and the nightmare is 7 USD a barrel for the oil-bugs. Thats a worst of worst scenario and also includes the dollar index in 160 or even higher. Both of these parameters will add tremendously to the profitability of European bulkers, even at todays dismal rates.

  25. NEWBIE says:

    I like Natural Gas (yes my own and the stuff we use to heat our home, appliances etc.) Also, very invested in PHYSICAL gold and silver. On the sidelines waiting for my next vix purchase,.

  26. EW is not worth anything at all.

    • torehund says:

      Every tools is useless; even a hammer, if you can’t nail it🙂
      Skill isn’t something that comes easy, if it was so, everyone would have it.
      Every loss is a learn.

      Happy Christmas.

  27. Jim Guthery says:

    Oil a view form Ichan and Pickens

  28. epgre says:

    My forecast is the opposite of Caldaro. I’m intermediate term bullish and long term bearish. I have the correction since beginning of November as a Minor wave iv with a minor wave v still to come. This will push the S&P to a new all time high sometimes in January. This should be the final high.

  29. blackjak100 says:

    PUG switching positions again????????

    • fishonhook says:

      Indeed ie if it does not go down too far then it may go up. The art of these paid forecasters is to leave enough ambiguity in their statements to allow them to never be wrong.

      • aahmichael says:

        Just because someone says the market may have a minor short-term move that is in the opposite direction of their long-term projection, does not mean they have changed their long term count. For example, Tony’s short and medium-term outlooks change all the time, yet his long-term outlook hasn’t changed in a very long time.

        • blackjak100 says:

          Using the word ‘rally’ is far different than using ‘bounce’. Without providing the stats, the most likely scenario is a LL tomorrow AM followed by upwards movement. It’s my belief this needs to be a rally and not a bounce otherwise the bear case probably wins.

          • aahmichael says:

            In my world, all up moves are rallies, and all down moves are declines. In a downtrend, all rallies are, by definition, bounces, just as in an uptrend, all declines are pullbacks.

    • budfox9450 says:

      Unwise, to be to rigid in this market….Bud

  30. soulsurfer says:

    thanks tony for another excellent weekend update. will the majority once again be caught on the wrong side of the trade, as most were after Wednesday?! It’s needed (for a major 3) or else the market wouldn’t work.

    It appears the DOW is also tracing out a bull flag, like the NAZ and NDX. We should know soon enough if that’s the case🙂



  31. opader says:

    Thx Tony. A question for you …. what are the chances that 2134 was the end of Cycle 1 of Super Cycle 3 and SPX is now trading in Cycle 2?

    My thoughts on the market ………. http://balancetrading.blogspot.com/

    Season’s Greetings and Happy New Year

  32. phil1247 says:


    bigger picture…monday plunge would hit -23% daily target and lower boll band around 34.77
    partial profits should be taken there but if no significant bounce occurs there

    a blowout to next target near 30 dollars would be next

    trade above 38 would be a warning for a brewing rally

  33. Interesting setup when two primary analysts are on different counts. Avi has the chart below which according to him only is setting up wave 5 in Primary 3 still. Tony has us already completed 3 and 4 and now in possibly primary 5.

    • BTW – he puts this chart on on Mondays on Marketwatch to the public so don’t harass me about posting proprietary stuff

      • Arthur Knopf says:

        I read his weekend post, but he has had the same 1850 or lower target for several months now and just moves it forward in time when it doesn’t happen.

        • aahmichael says:

          The most important rule of successful prognostication is to never put a time limit on the call.🙂

          • fionamargaret says:

            …aahmichael, I find when determining a suggested buy price, I can do that (through memorizing of numbers and sequencing), but cannot include the timeline. – guess it’s price or time.

          • fishonhook says:

            very true michael. I am still amazed that there are so many greater fools out willing to pay up regularly to these pundits that keep calling it wrong.
            In truth no one can ‘all’ the market. the best we can do is make a hunch and have a plan if we are right or if we are wrong.

          • aahmichael says:

            fiona, in 30 years of studying and trading the market, I have never been able to predict the moment in time that the market would hit a particular price. That’s why I have never once in 30 years ever bought an option. I only trade the S&P futures. It’s the pure play for my methods of analyzing and trading the market.

          • aahmichael says:

            fish, people seek out ‘pundits’ and ‘gurus’ because they’re not secure in their own abilities. They need reassurance from others. This is especially true when they’re in a trade that’s going against them. In those instances, they will search high and low to find other people who are also on the wrong side of the market. It makes them feel better to know they are not alone. There’s an old saying that goes like this: “People are more faithful to their losing positions than they are to their spouse.”

        • ““People are more faithful to their losing positions than they are to their spouse.”

          Gosh. Where have I been? I thought the spouse *was* the losing position. :):)

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