Friday update

SHORT TERM: choppy day digesting weak earnings, DOW +21

Overnight the Asian markets gained 0.1%. Europe opened lower and lost 0.3%. US index futures were lower overnight and the market opened down seven points from yesterday’s SPX 2091 close. Right after the open the market rallied to SPX 2094 by 10am. Then another pullback took the SPX down to 2081 by 10:30. After that the market started to work its way higher. Heading into the close the SPX hit 2093, then closed at 2092.

For the day the SPX/DOW were +0.05% , and the NDX/NAZ were -1.10%. Bonds lost 4 ticks, Crude rose 55 cents, Gold dropped $15, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Today the WLEI was reported higher: 53.5% v 52.5%.

The market opened lower today, hit SPX 2081 in the first hour of trading, then rebounded for the rest of the day. Considering yesterday’s after hours earnings disappointment the cyclicals held on well today. From the recent SPX 2111 high the market has declined to 2081, and now rallied to 2093 for two waves down from the high. Short term support remains at the 2085 and 2070 pivots with resistance at SPX 2104 and SPX 2116. Short term momentum bounced from quite oversold to end the week at neutral. Best to your weekend!

MEDIUM TERM: uptrend

LONG TERM: bear market rally


About tony caldaro

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102 Responses to Friday update

  1. Yes, Tony, That’s it. I will take SPX in negative, Don’t want that Bald Ben. Once I take SPX in negative, will fly in DC to plant kiss on Bald Ben’s forehead. Bald Ben’s Ph D thesis was full of plagiarism as unconfirmed reports suggest..

    Saturday night…di di da da na na..

  2. avkanoi says:

    Tony is back….. And so will be the bear market….. ‘ Black Monday ‘ 25 th April ??

  3. rd3777 says:

    Amazing McDonalds monthly chart. The 3 wave paradigm sure looks ended to me…hope it’s not the end of the world….

    • kjb0 says:

      McDonald’s stock will be half of what it is now next year.

    • bud67 says:

      4/23 ref MCD – well, I am not inclined
      to be negative on MCD, in light of the
      spectacular price advance. Sure, decline
      will form, and after which a “new Bull
      advance” creating an investment op…end

    • locanbbs says:

      Why “3 wave”? I see 5 waves here, which you have yourself clearly marked (A – E)? The form does look in some way “finished”, but I would prefer two parallel lines. The “wedge” form appears a little speculative here to me. To the left there appears a lower peak, which could possibly easily be connected with “E”.
      Besides, we all know that it’s hard to predict how far these rocket-type formations will go. A turnaround would require some kind of contentual information (volume, at least). Unfortunately I can’t reproduce your chart at the moment for technical reasons. Wait and see if a consolidation evolves.
      Don’t want to criticize, just saying.

  4. kvilia says:

    Nice to have you back, Tony.

  5. locanbbs says:

    Spx broke down yesterday already out of its short-term uptrend, but just managed to hold on to its mid-term uptrend. Giving a good buy-signal later in the day, it paused at the close at the downtrend channel top-line and looks to follow the Russell upwards on Monday.
    Spx – 3 hour chart (one bar = 3 hrs.) –

  6. Mr C,I know it s from Zerohedge,but they are reporting that Draghi is letting it be known that the Euro QE has the power to buy bonds from foreign oil companies that would need to be bailed out.Shell was given as an example.It s a long article and I m summarizing.All they(oil companies) have to do is register in some way to be affiliated with Europe but still be based in the states to get a flush of cash.Not limited to oil companies either(Banks).So the entire industrial world will theoretically be backed by CBs.Just gets wilder and wilder.

  7. ewmarkets says:

    Does Anyone count AAPL waves? Seems on monthly chart, it has had clear 5 waves up to top at 134 and change. AAPL is in a bear market?

  8. cosmos77 says:

    Thanks Tony. Looking forward to the WE update.

  9. vivelaamo says:

    Hope we are all buying the dips. All time high by the end of next week. The move that is coming up will blow you socks off. If will be even stronger than the move we had last month because every Tom Dick and Harry with be trying to short it.

    All the best!!!

  10. zimbabweanimike says:

    Friday’s always good in Manchester!

  11. locanbbs says:

    Russell 2000 5th Wave extending:
    (5 minute chart: 1 bar = 5 min.) –

    • locanbbs says:

      A propo “Bubble”. Or is the Russell just catching up from a long period of being undervalued in contrast to the other markets? Who’s the expert here on valuations?

    • micky says:

      I regret to say this but I think you are not correctly counting with regards to overlapping waves..w4 not allowed to overlap w1, only if it is a diagonal..hih

      • micky says:

        that was for Locanbbs count on Rut

      • rd3777 says:

        That’s not a EWT count form…just away to number a brodening top…the v is for validated and the P is for phony….typically they waterfall down from the P top on the secondary rally….the first drop should go below the v bottom by atleast 3 percent.

        • locanbbs says:

          I’m using Trader Joe’s “8-Fold Path”, and it fits here and in most rising waves perfectly. Not having universal knowledge in the field of EW/OEW, I can’t be sure what kind of EW he’s teaching. But I have found it the easiest and most useful kind of EW up to now. Please inform me further about this. I’m here to learn and still a novice!

        • locanbbs says:

          Is “broadening top” an EW term, or some kind of TA?

      • locanbbs says:

        I don’t know if any exceptions are allowed, but it’s acting just like that. So who’s to tell the stockmarket what’s allowed? (Don’t want to be cheeky, but that sounds a little like Fundamentalist Bible Camp.)

  12. John Bell says:

    —Entering stock bubble mental state now…caution ahead.
    If stocks get too high here in an irrational blow-off top with greatly declining earnings and revenues, then the FED may be forced to either talk more hawkish or actually do another rate increase sooner than my above mentioned Dec 2016 the bond market is figuring. They will be forced to admit stocks are in a massive PE bubble and talk or work them down some.

    This bubble blow-off top may not have price accelerate up a lot, but just by gradually grinding higher with steeply declining earnings the GAAP PE will accelerate up fast in a bubble trajectory.

    After this earnings period the GAAP trailing PE will likely be 24-25. Way high. GAAP earnings and revenues are way down YoY for almost all companies reporting so far this time, but traders are buying up bad real earnings reports that beat really low expectations of 10% declining profits and revenues. When this happens it is a sign of a bubble mentality.

    Only when I see traders punishing companies for continually declining earnings and revenues will I know this bubble we are in is coming to a close. quarter after quarter of declining earnings and revenues that are rewarded by super low beats = bubble. And the PE’s move up higher and higher. We are entering the 2000 tech bubble blow off phase area with that being the only time that reached a slightly higher GAAP PE (27 then, we will get there this summer after June earnings if stocks do not fall from here or go up much more.).

    Cash flow in many companies is negative when factoring dividends and stock buy backs. So many companies are funding most of the dividends and buybacks by issuing more debt bonds. ECB saw this in EU so is stepping in to buy the debt bonds from companies because many EU companies are in such bad shape others may not want to buy the bonds without massive yields and risk guarantees.

    • zimbabweanimike says:


    • tony caldaro says:

      Current SPX GAAP PE is already 24, while GAAP earnings have declined for 5 straight quarters. Notice what is going on in Biotech. One company after another company is being questioned about revenue, earnings, ethics, and in some cases unscrupulous practices. This was the bubble sector during the bull market. Is the energy sector next?
      Greenspan has said, bubbles only effect the economy when there is leverage involved. Aren’t corporations leveraging their future with these stock buybacks? Have heard the buybacks account for 1/3 of the volume this year.

      • John Bell says:

        thanks for the discussion tonight in your nice civilized blog. I read your report regularly and sometimes the comments. But I have been a long time follower and voter for your lists. But since I trade mostly my own thing do not often get involved in these blogs on a regular bases. Only when I get so disgusted with the constant stealing of our future to prop up failing companies, failing governments, etc.

        I am old but worry about the future for my children and grandchildren. Central bankers and governments continually steal from the futures and eventually that price will be paid with a very long unwind. CB’s are stealing future market gains because they will not let a market recession happen or real price discovery and letting bad companies fail and restructuring bad companies and governments.

        Long term and I mean really long term I do not see the stock and bond gains we have had. I see 2-3% stocks and bonds (dividend gains only, no price gains) average gains for the next 20 years and that is it. Our future is being stolen.

        The gov, corp, personal debt bubble is massive, China debt bubble is super massive and others also. Way higher than ever before and when it all crashes the only solution is a massive currency devaluation to remove debt loads across the board. And that is painful when you wake up the next day and your cash is worth 50% what it used to be and inflation soars to 10%..

        Long term solid gains corporation organic growth and stocks are made when debt is low and adding more debt is used to expand companies, hire people, CAPEX development. Now any debt is used for nothing but dividends and stock buybacks for the rich. Companies are about to start getting downgraded for too much debt load.

        Any recession will blow up the entire system they created. CB’s know that and that is why they are running in panic mode and doing crazy things to keep away from large declines. If you make a bad decision and have power, you always add more money and do the same thing over and over again never admitting you are wrong until it is all destroyed or you magically get natural lift-off. This lift-off will not come because the CB’s destroyed any chance of it happening by being afraid to let bad companies fail and bad debt default.

        Who owns a lot of bad oil debt? Banks. Massive oil debt default will destroy many banks. So thus the FED pushing oil up to try to let them try to unload their bad debt on some other gullible parties.

        Have a nice night and weekend.

        • bud67 says:

          Hello — 20 years, is a very long time to make
          any responsible investment projections. That
          said. I feel, the best investment is to be
          patient, for the next Bear market low, yet to
          unfold. Given the 20 year cycle, and low
          I recall of 2002. The the year of 2022, would
          suggest a major Cycle low for value investors.
          I am not a “cycles” expert, by any stretch
          of the imagination – offering my view freely,
          with that in mind….Bud

        • tony caldaro says:

          Not so negative on the future John.
          QE is a good tool if used responsibly.
          The problem is CB’s are using it to avoid even the smallest of economic downturns.
          And just like Gov’t debt, the CB balance sheets will never wind down.
          When the next inflationary secular cycle comes along, the 1970’s are going to look like a walk in the park.

      • Mr C,I know it s from Zerohedge,but they are reporting that Draghi is letting it be known that the Euro QE has the power to buy bonds from foreign oil companies that would need to be bailed out.Shell was given as an example.It s a long article and I m summarizing.All they(oil companies) had to do is register in some way to be affiliated with Europe but still be based in the states to get a flush of cash.Not limited to oil companies either.So the entire industrial world will theoretically be backed by CBs.Just gets wilder and wilder.

      • rd3777 says:

        Tony, Exactly….The auto parts group is a perfect example. Typically inventories of auto parts in a liquidation are worth 20 cents on the dollar. Creditors typically have a claim against the inventories or assets,but the liquidated inventory value will never cover the amount of loans made for these stock buybacks. This is a scam…the directors of the companies have extracted billions of dollars doing this. AZO is the perfect example as it has incurred 5 billion in debt,has negative book value and a 770 share price. All based on future buybacks and fruture earnings. A bubble….in the old days this was described as “pools” who cornered stocks. Essentially the same thing and it always ends…badly.

  13. zimbabweanimike says:

  14. Don’t let these sociopaths who seek to foster discord bother you or disrupt your posting. It will be obvious who they are. I have a PhD in anti-trolling.

  15. alexh110 says:

    If the major b top is in, that would make a 47 day duration, almost equal to the 48 day duration of major a. Nice symmetry!

  16. New highs First….the bear is careful

  17. 7dayyss says:

    Tony: Haven’t really paid attention lately to the WLEI. Seem’s like the last time I noticed, it was 47 something, I was surprised to see the steady rising. Any opinion as it relates to the downtrend, not unusual to get spikes? Thank you!

    • tony caldaro says:

      It seems to follow stocks more than the economy

      • John Bell says:

        totally agree Tony. WLEI is not as useful anymore as it follows more closely to stocks and the now increasingly fudged economic factors. This is an election year so much of the data is heavily fudged.

        Same for the LE leading Economic indicator. I believe 6 of the ten factors are all related to stocks and the others again are heavily fudged.

        It has become very hard to get at the truth in the economy from the National data and the totally fake adjusted earnings reports.

        At this point the FED is lost and only trying to hold stocks up. They have two additional main goals – prop up Oil and keep Gold down. If Gold takes off the FED knows people have figured out the FED messed up. So through currency and other manipulations I believe the Fed or their agents are striking Gold down periodically. This will go on the rest of the year I think. I see gold take off after the election.

        I trade and follow the various bond markets heavily. At this point the Bond market is only figuring one rate increase this year in Dec 2016 after the election. Small chance of anything before then but could happen if inflation would burst up – USD down hard. Employment goals were met 2+ years ago. FED is stuck in the USD fix. They need to keep it about where it is now, Down hard and inflation and Gold go up. Up much more and companies and economy hurt more.

        In April no rate increase.
        June the expected next rate increase will not happen but they will change the language to say we are planning a forward 2 rate increases a year strategy starting AFTER this meeting. Which then means Dec 2016 and maybe one by or at June 2017 (which they may push back also.)

        Have a nice weekend.

        • John Bell says:

          PS. I am 100% in municipal bonds now and have been above 65% in muni bonds since middle of Sept 2015 and doing pretty well. They have gone up steadily with steady inflows of money that accelerated in 2016. I have zero Puerto Rico exposure. Was careful there.

          I rotated around some to different funds as things changed but I think I may be settled for a while now with what I have if things go as planned. Money has been flowing steadily into US muni bonds as they have better yields, seem safer and have less outside interference.

          Muni often are less volatile in price and can often hold value or even go up when stock go up unlike traditional corp and US bonds. Plus outside forces are impacting Corporate and US Treas bonds much more now. The Saudi verbal threat and US bonds dropped a lot.

          Corporate bonds ran a little better when ECB said they were going to buy corporate bonds. And soon they will start that. So ECB bond money will be used to buy EU corp debt bonds so they can buy back more shares over there and some of that effect may float over here.

        • tony caldaro says:

          The WLEI has already given two false signals since 2009. Lost trust in that one.
          Atlanta FED has been doing fairly well with their GDP estimates … currently Q1 +0.3%.
          Stocks are acting like H2 will provide a big recovery. Not convinced here. Estimates have always been high, and then lowered so they can get beat. When you can’t beat lowered estimates you have problems. World is awash in Crude oil, but that rally continues.
          Guess the central banks can always lend corporations money at negative rates so they can buy their stock back. But when does this nonsense stop? Why are central banks buying anything corporate?

          • John Bell says:

            Yes Atlanta FED’s GDPNow seems much better. But I see NY FED now wants to create its own GDPNow formula. Of course NY FED is tied tight to THE FED so their number when it comes out later this year? may be a suspicious manipulation attempt to counter Atlanta’s GDPn more realistic data with NY FED fudged managed data report.

            The data corruption game goes on and on trying to cloud all reality from people.

            Negative rates by definition are deflationary and also cause significant reduction in velocity of money. Any objective economist can see this as this was proved by the Eu and now Japan’s negative experiments. Any idiot (except central bankers) can see that if your money in the bank loses value that is deflation. And banks and people will pull their money out of banks ruining their asset/debt balance sheet.

            • tony caldaro says:

              The two most important people at the FED are Yellen and Dudley. The rest go on TV and voice opinions, but have no weight in the FED’s decisions. Maybe Dudley is jealous of Atlanta.
              Agree, negative rates, and even low rates, are deflationary because there reduce spending. Less transactions = weaker economy.

    • Just follow the WILE insted.

  18. torehund says:

    Good weekend to Tony, bulls and bears.

  19. blackjak100 says:

    It’s hard to fathom with NYAD +1265, the top is in. Seemed very corrective.

    • fionamargaret says:

      …I am/was looking for a 23.6 retrace for a short term correction to 2040 ish…and the algos were set up to agree with this premise …until they were not about…maybe/maybe not next week….the charts (see above) are bullish.
      Why are the S&P Growth i-shares under performing…..just a delay??

      • Jack Sparrow says:

        38.2 retrace to the dot from the move that started from 2020s. Cheers

        • fionamargaret says:

          I am better with charts in retrospect Jack, but appreciate your help…..x

        • fionamargaret says:

          Why don’t you join our group Jack – you sound like you know what you are talking about.
          Playing an instrument is interesting, but not essential – creativity is.
          Hope you consider.

  20. Tony, thank you very much. Rick

  21. TMF says:

    The bear likely has come and gone.

    World markets and rut / mid declined 20%. USA got close. It took a year. USA went down less bc investors hid there.

    We entered a new secular bull market in 2012 when we broke above 1600. Therefore bear markets will be shorter in time and price.

  22. Mr, Coyote:

    The terms of the “Gold Loan” from Andy Hoffman and Bill Holter to Jim Sinclair’s TRX can be found in the most recent financial statement (20-F) that was released on April 11th.

    743 one ounce common circulated American Liberty $20 Gold Pieces and 95 one ounce circulated Saint-Gaudens Double Eagle $20 Gold Pieces.

    Maturity date of Loan: June 22, 2106

    Loan Repayment may be made via Coin Return, Cash in US Dollars, or Shares of common stock of the Borrower.

  23. so sisters and brothers, it seems that the move from 2030 has show two distinct waves going up 1 and 3 . today we saw the fourth correction now the fifth is in play…before it was difficult to to figure out the pattern now its clear. not to mention trader joe:s favorite ooint, today correction stopped right at 38.4 febonacci (spelling) number typical of wave 4…so wave 5 should be the shortest given third (38 points) was shorter than first (48 points). fifth starting at (2082) so target 2115 to 2120ish

  24. magnus1234 says:

    Best to your weekend too Tony.

  25. rd3777 says:

    Thank you Tony….Yes 2 waves down in the NDX which look impulsive…do we rally up a little further or accelerate down from here? Have a gret weekend.

    • I was wondering about this as being the count,but didn’t want to make a fool of myself.

      • rd3777 says:

        Well.most say I call a top all the time,but everything I look @ has done 1,2’s and the waves have a very simple structure which could mean a big move down is directly ahead….

  26. bud67 says:

    My SP500 EW count from the 2/10 low, would place
    W5 high at 2111. Comments, on that being correct/no correct
    would be appreciated. You all, at better at EW than I,
    comment, welcome…

    • sixpack says:

      It’s really hard to say at this point Bud. Lots of people here still feel it’s a B wave. But, assuming your 5 wave thesis (which is how I view it), then we don’t really know if 2111 was M1 or not. Looks like it is to me, but shorterm counts are always all over the board. My position is long and staying long. Also, you have the RUT not stopping. This is a strong market. Maybe TJ would have a better feel.

      • bud67 says:

        thank you –sixpack…you offer sound logic. On another
        topic — been working on a project, that includes the
        Russell2000 index, and the ETF’s TNA/TZA.

        I noted that N. Gulam does a darn good work on the.
        Russell 200 index – that said. If his postings are
        a quick, as they appear. I thought, a lot about following
        is wave counts, with trades/and or investment positions.

        Point being – having an EW experienced person in
        your corner to updates accurately/timely – would
        be $’s in one’s pocket – again also using my own tools,
        as well. I found, the more confirmation of a turning
        point, the safer one’s money becomes. A late signal,
        is of less value.

        What are your thought’s?

        BTW – have a great weekend, too.

  27. kvilia says:

    Splendid weekend to you Tony, thank you.

  28. phil1247 says:


    my original number of 2091.5 was better
    only off by 0.08
    this is the location of the downtrend line from highs

    i figured they would want to close it right on that line

    and they did

    have a great weekend

  29. It is interesting that the SPX touched the 13 day ma and the Nasdaq broke under it and closed barely under it.

  30. nsteve24 says:

    still no Green b? must be counting move down from 2111 to 2081 as as 4 with higher high expected

  31. It echos in here! Thanks Tony!

  32. 123 abc says:

    Thank you Tony et al, look forward to the OEWcc (coffee-club) thoughts this weekend.


    • NEWBIE says:

      123 abc, I like it.

    • Yuanyuan Ju says:

      It is very good chart. But I have a little question:
      In wave minor 5—wave v—wave 2 and wave 4 ( I feel that they are not same level because there is a smaller wave in wave 3, I mean it can be calculated 5 wave from your wave 1 untill your wave3.) If like this, it means wave b is not finished. I do not know if I am right or not?

      thank you

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