weekend update


The market started the week at SPX 1940. On Monday the market rose to SPX 1947 and then traded down to 1872 by early Wednesday. Then the market rallied to SPX 1927 early Thursday, only to selloff again and end the week at SPX 1880. For the week the SPX/DOW lost 2.35%, the NDX/NAZ lost 5.70%, and the DJ World index lost 2.20%. Economic reports for the week were again biased negatively. On the uptick: personal income, construction spending, consumer credit, Q1 GDP, plus the unemployment rate improved. On the downtick: ISM manufacturing/services, the ADP, factory orders, monthly payrolls, the WLEI, plus weekly jobless claims and the trade deficit worsened. Next week will be highlighted by FED chair Yellen’s semiannual monetary policy report to Congress.

LONG TERM: bear market

During the entire six year bull market, the longest period between new highs was May 2011 to Feb 2012. During that period Primary I had topped in May, Primary II bottomed in October, and the market was solidly in an uptrend from a December low that would last until April 2012. Currently the market made its highest price in May 2015, sold off until August, made a lower high in October, and then an even lower low in January. The price action since May looks more like a bear market than anything that occurred during the bull market. We continue to see a Cycle wave [2] bear market underway.


The six year bull market completed its expected five Primary wave advance with a somewhat abrupt ending. Primary waves I and II completed in 2011, and Primary waves III, IV and V completed in 2015. Primary V, however, impulse higher in a strong uptrend but failed to make new all time highs by about 1%. This completed Cycle wave [1] and a Cycle wave [2] bear market is now underway. Cycle waves typically lose 45% to 50% of market value before they bottom. This would suggest a low around SPX 1100, more or less, by sometime in 2017. The decline may be a simple zigzag, or a complex three. With only one confirmed downtrend underway it is still too early to determine the pattern.


After the Primary IV low at SPX 1867 in August, the market rallied in five impulse waves SPX: 1993-1872-2116-2019-2104. The fifth wave failed to make a higher high falling short of the third wave at SPX 2116. Also this Primary V uptrend fell short of the bull market high at SPX 2135. So in effect the bull market ended with a failed fifth of a failed fifth wave. This was quite an abrupt ending to what had been a very good bull market, i.e. the SPX more than tripled in the six years.

After Primary V ended the market entered a three wave downtrend, made lower lows, and hit SPX 1812 in mid-January. Then with a positive daily RSI divergence, and a quite oversold MACD we expected the first uptrend of the bear market. After about 2.5 weeks of market activity, and a 135 point rally to SPX 1947, the advance is not looking like what we had expected. While the SPX/DOW are still well above their mid-January lows, the NDX/NAZ are both getting quite close to making lower lows. This should not be happening during an uptrend.


At the mid-January lows we expected an uptrend to unfold, with a worse case trading range during the month of February. This can still occur. But if the market breaks down much further we have to accept that the downtrend from the Primary V high is still underway. We had counted the three waves into the SPX 1812 low as corrective. Suggesting the market is not impulsing down, but unfolding in a more complex set of a-b-c’s. Should the downtrend extend we will be forced to find a new short term wave filter, since the bull market’s filter will no longer be in effect. Medium term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots.


Tracking the SPX/DOW, in isolation of the NDX/NAZ, the waves have been unfolding somewhat as expected. After a potential Major wave A downtrend low at SPX 1812, the market has rallied in an expected Major wave B uptrend to SPX 1947. Since we have not confirmed that the downtrend has ended, we labeled that low with a tentative green Major A. The rally to SPX 1947 has not confirmed an uptrend either, so we are stuck, at this point, with two tentative green labels. Should the downtrend resume we will have the answer to this dilemma. Should the market stay in a trading range the trend confirmations will come eventually.

Remaining with the current labeling, we have counted three Intermediate waves up to SPX 1947 Major B wave high: 1909-1874-1947. After that we counted three wave down for Minor a of Intermediate A SPX: 1897-1914-1872. Minor b was also three waves SPX: 1918-1901-1927. This count suggests Minor wave c of Intermediate A is currently underway. Should Minor c = Minor a, then the market should find support around SPX 1852. Anything lower than that would suggest the initial downtrend is resuming.


One other possibility, since the market has now found support on four separate occasions in the SPX 1870’s, (twice last week and twice this week), Major wave B may be much more complex. For now we would expect the market to drop to around SPX 1852 before it starts to rally in an Intermediate wave B. Short term support is at the 1869 and 1841 pivots, with resistance at the 1901 and 1929 pivots. Short term momentum ended the week quite oversold. Best to your trading this volatile market!


Asian markets were quite mixed for a net loss of 0.3%.

European markets were all lower and lost 5.5%.

The Commodity equity group was mixed and lost 0.7%.

The DJ World index remains in a downtrend and lost 2.2%.


Bonds continue to uptrend and gained 0.6%.

Crude is still in a downtrend and lost 8.1%.

Gold is still in an uptrend and gained 5.0%.

The USD is in a downtrend and lost 2.6% on the week.


Tuesday: Wholesale inventories. Wednesday: testimony from FED chair Yellen before Congress, and the Budget deficit. Thursday: testimony continues before the Senate, and weekly Jobless claims. Friday: Export/Import prices, Retail sales, Business inventories and Consumer sentiment. Best to your weekend and week!

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

About tony caldaro

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375 Responses to weekend update

  1. Jim Guthery says:

    Any body looking for gold to consolidate around 1220-1230?

  2. torehund says:


    2 + 2 up this is where the boots kills it. Yes, Euro is soon toast.

  3. I did say SPX will close at 1835. You just have to reverse last two digits. Always, give credit where it is due..lolz

  4. 123 abc says:

    Superb pivots, 1828 on the nose, this OEW stuff is truly magical.

  5. fotis2 says:

    Seriously was anyone expecting this it basically retraced the whole day back to back speedy Gonzales land snooze and loose

  6. Gary Lewis says:

    OK! Sold some of the calls I bought early and took the profits and bought some put spreads. Fun day for sure!

  7. kvilia says:

    I think sometimes its useful to get out of the a-b-c minf set and look at the beautiful red and green and blue chart colors.

  8. purplember says:

    Tony, i’m estimating if we go below 1812 then it’s Major A. if it rebounds from 1827 then it’s possibly Int A of C of Primary A

  9. OneAndOnlyUniverse says:

    AAmike , So you trade professionally and your obviously confident on ” down days “, why are you not adding aggressively to your Spx short if you believe that???
    aahmichael says:
    February 8, 2016 at 1:54 pm
    At this point, I think the SPX will print 1680 (and even 1580,) before it prints 1880 again.

    • aahmichael says:

      I’m 100% short at 2063. There is nothing else to add. I’m a position trader, not a daytrader.

    • aahmichael says:

      Also, my statement is based on my wave count. If SPX does print 1880 first, then I will have to adjust my count.

      • Agree w your count…1683 is 161 of 2134-1867

        • aahmichael says:

          My count is not the same as yours, but we end up basically in the same place. I see 2082-1812 as wave A (a double zig-zag,) and 1915 as the end of wave B. If this count is correct, then we’re now in wave C, and it will equal wave A at 1646. If that occurs, though, then 2082-1646 would just be a wave A of larger degree. Obviously, a lot can happen between now and then, so I don’t put any real weight in any of this yet. Based on my current short term count, though, I do put a lot of weight in the comment that I made that seemed to bother OneandOnly so much. I’ve been assuming the most bearish count is the correct count, and so far, the market hasn’t done anything to prove otherwise. If and when it does prove otherwise, then I’ll adjust to an alternate count.

  10. bud67 says:

    My work, at 3:30pm est – remains in a neg. bias to the downside.
    Dispite the near, 20 point rally this afternoon. Indicators, thus
    remain bearish, as well. with less than 3o min to go. Rather
    doubt, a sustained rally is underway….IMO

  11. Lee X says:

    Personally I get a kick out of the comment section, bull or bear

  12. Page says:

    Bulls agreeing with bullish comments, Bears agreeing with bearish comments.
    Just remember today is new moon day, so it takes +1/-1 days, I think Bears will be creamed tomorrow.

    • mjtplayer says:

      Bradley date was on Sat 2/6, new moon today, Saturn in alignment with Pluto tomorrow.

      All astro data points signaling a potential trading bottom today or tomorrow.

    • rc1269 says:

      Page what does it take for you to modify your market view? Just curious what you need to see. You’ve been bullish and generally wrong for at least a year, as far as i can tell from your posts. do you need to be down 20%…30%…40% before you no longer expect higher highs right around the corner?

      you’re not my mother in law are you???

  13. captbara says:

    Wait for 1838/1845.

  14. aahmichael says:

    For those you care about such things, SPX just put in a 3BR to the downside, and is now setup to take out 1812 before the end of the day.

  15. timmy321 says:

    So Tony, is major A still going on? If yes then are you looking for new lows?

  16. S&P 500 ……30 min pitch plays….

  17. B Seagle says:

    UVXY could be topping…

  18. bud67 says:

    Updating my EW rickety EW views. Short Term, the SP is in a 5th
    wave down pattern with minor waves 1,2,3, now completed.
    The pattern will not be completed to the downside, until the
    SP 1812 level of 1/20 is reached, or violated. Conclusion is to
    stay short, for a bit longer. A downside, non-confirming signal
    (or Buy) is expected at the penetration of SP 1812….that’s my view.

  19. H D says:

    I’m an optimist, charts are not supporting that view though. 1872S, 1869P didn’t hold despite oil holding, I removed the 30% chance of PV I was leaning on.

    Did SPX put in lows at Chinese NY past couple years?

    • bud67 says:

      HD….your good. But, if your suggesting the SP lows
      are in anyway associated with the Shanghai index, that
      might be a flaw in your thinking. IMO.

  20. lunker1 says:

    from 1927, if 4 is 1848 then 5=1=1825
    gto’s weekly S3 182.41
    .886 Maj A to Maj B 182.45ish

  21. bud67 says:

    There has been no change in Bearish
    SP500, view. Still see 1812 level (supprt)
    being challenged, and expect that support
    will failed, Thus, no interest in going long at
    1812…Bear Market….

  22. CampFreddie says:

    Clearly a lot of “Run for the Hills” Fear in mkts today … the contrarian in me is starting to twitch.

    • mjtplayer says:

      Getting there, but not yet.

      – VIX in the 26’s is nearing the top of the 27 – 31 range.
      – Equity put/call at .91 – starting to show fear
      – TRIN made a high at 1.61 but now just 0.92 – neither show fear or capitulation.

      Getting there, but more downside needed….

      • CampFreddie says:

        mjt, Yes it def feels like there is something big and bad “Out there”, euro banks maybe?.
        Good news is that when the story finally hits the tape we should get a massive “buy the news rally.

  23. tomasso60 says:

    from Walter Murphy

  24. A very simple view is this VISA chart… basically says to us that transactions are dropping dramatically…

  25. Wave 4 50% retrace of that nasty 3 (2016-1812)… now 5 of 3 is the count still for us… 1780’s?

    Then a larger 4, then a larger 5…

  26. Jimmy Porter says:

    Good Morning. Here goes my second post. Going to play devils advocate. I am sorry in advance because I am not sure how oew works yet. I go by what I have learned over the past year. I will catch up with oew bit by bit.

    Based on the jan. lows. I see the following set up.

    We are in a critical area in all three markets, so if things fall apart by end of day then what I think will go to crap.

    SP- Forming a running flat with the high back at beginning of Feb being the A. If we hold this area this will be the B. SP must close above 1839.5. Followed by a C to new highs in this countertrend rally around 1960 area. Then it will fall to new lows around 1750.

    Nas- Forming an expanded flat. Again, key support areas. Must have a rally by close and close above 3974.75 for this to work.

    Dow- I see this as a zigzag. It is holding the 61.8 retrace from low to high. Would like to see it hold above 15900 by close.

    For you candle stick people this would form bullish reversal pattern for all 3 indexes.

    These are all in eminis numbers.

    It’s a long shot but it could happen.

Comments are closed.