weekend update


The market started the week at SPX 2081. On Monday it dipped down to SPX 2074 and then started to rally to new uptrend highs. By late Wednesday the SPX hit 2111, and then started to decline. By Friday morning the SPX hit 2081, then bounced to end the week at 2092. For the week the SPX/DOW were +0.55%, the NDX/NAZ were -1.10%, and the DJ World index gained 0.70%. Economic reports for the week were mostly positive. On the downtick: building permits, housing starts and the Philly FED. On the uptick: existing home sales, the FHFA index, leading indicators, the WLEI and weekly jobless claims improved. Next week’s reports will be highlighted by the FOMC meeting, Q1 GDP and the PCE. Best to your weekend and week!

LONG TERM: bear market rally

After a two month uptrend, and the SPX reaching within 1% of its all time high, it has become increasingly difficult to find bearish pundits anywhere. Even many of the perm-bears, as they are called, have turned bullish. This uptrend has obviously become quite a convincing, the central banks have got your back, advance. Nevertheless, we would like to point out the MACD activity on the monthly chart below. As you will observe it topped out in early 2015 and has been heading lower ever since, except for some flattening out in the first few months of 2016. This is not bull market action.


Notice the MACD peaked before price in 2007 and declined throughout the bear market that followed. Also observe the 1999 peak, and steady decline, except for a few flattening out periods during that bear market. A bit more difficult to observe is the 1987 peak and 1984 peak before the bear markets that followed.


We continue to count the Cycle wave [1] bull market completing in 2015 with five Primary waves. Primary waves I and II completed in 2011, and Primary waves III, IV, V completed in 2015. The first decline from the Cycle wave [1] high we have labeled Major wave A. And the current uptrend is labeled Major wave B.

MEDIUM TERM: uptrend

After a double bottom around SPX 1870 in late 2015 the market rallied straight up to SPX 2116 before faltering and heading back down again. After a double bottom around SPX 1810 in early 2016 the market has rallied straight up to SPX 2111. Both advances were two of the best uptrends in the past seven years, and both were preceded by double bottoms. At the SPX 2116 high the RSI displayed a double negative divergence. At the recent SPX 2111 high the RSI is displaying a double negative divergence. The initial decline, after the SPX 2116 high, started off gradually and then gained momentum on the way down. The recent SPX 2111 high only occurred two days ago.


We continue to label this uptrend as three Intermediate waves. Int. A at SPX 2009, Int. B at SPX 1969, and Int. C at SPX 2111. We have counted Int. A as five overlapping waves: 1947-1891-1963-1932-2009. And Int. C as five overlapping waves: 2057-2022-2075-2034-2111. This pattern is currently suggesting an eleven wave complex zigzag. If the market has topped, a completed Major wave B would be in place. If it pulls back further and then rallies to higher highs, then it could start looking like an impulse wave. Either way, when this uptrend does conclude we will have a much better idea what this uptrend implies longer term. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 pivot.


The short term wave pattern, as noted above, appears to be a series of five wave overlapping patterns. For Int. A we have Minor waves a and b at SPX 1947 and 1891, with a subdividing Minor c: 1963-1932-2009. Int. C has the same pattern: Minor waves a and b at SPX 2057 and 2022, with a subdividing Minor c: 2075-2034-2111.


The key levels going forward are SPX 2111, 2074, and 2034. Should the market exceed SPX 2111 it is obviously extending to higher highs. Should the market drop to SPX 2074, the recent five wave advance from 2034 has definitely concluded. Should the market drop to SPX 2034, then the entire uptrend may have concluded as well. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2104 and SPX 2116. Short term momentum ended the week at neutral. Trade what’s in front of you!


The Asian markets were mostly higher and gained 0.8% on the week.

European markets were mostly higher and gained 2.6% on the week.

The Commodity equity group were mixed and gained 1.5% on the week.

The DJ World index gained 0.7% on the week.


Bonds continue to weaken and lost 0.9% on the week.

Crude made a higher uptrend high gaining 4.7% on the week.

Gold appears to be in a downtrend and lost 0.5% on the week.

The USD is trying to establish an uptrend and gained 0.4% on the week.


Monday: New home sales at 10am. Tuesday: Durable goods, Case-Shiller and Consumer confidence. Wednesday: the FOMC statement and Pending home sales. Thursday: Q1 GDP (est. +0.3%) and weekly Jobless claims. Friday: PCE prices, Personal income/spending, the Chicago PMI and Consumer sentiment. Best to your weekend and week!

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

About tony caldaro

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354 Responses to weekend update

  1. Excellent piece . I learned a lot from the insight – Does someone know where my assistant could possibly get access to a template IRS 1099-OID form to edit ?

  2. johnnymagicmoney says:

    This is what the market is now…..excited young teenager wants to drive dads car and it’s a pretty 69 Camaro . Black with white stripes down the center. Looks bad ass. Dad gives his son the keys and son is excited because he’s going places. Of course the problem unbeknownst to him is the car has no engine in it and so it’s going nowhere no matter how excited son gets and no matter how many times dad gives son the keys.

    Dad is the FED
    The keys are the jawboning, easy rates, and stimulative measures
    The car is the economy
    The son is the buyers
    The sins excitement is the faith placed in the FED

  3. johnnymagicmoney says:

    This is what the market is now…..excited young teenager wants to drive dads car and it’s a pretty 69 Camaro . Black with white stripes down the center. Looks bad ass. Dad gives his son the keys and son is excited because he’s going places. Of course the problem unbeknownst to him is the car has no engine in it and so it’s going nowhere no matter how excited son gets and no matter how many times dad gives son the keys.

    Dad is the FED
    The keys are the jawboning, easy rates, and stimulative measures
    The car is the economy
    The son is the buyers
    The sins excitement is the faith placed in the FED

  4. ajaysinghi says:

    A big blow to bears today.

  5. captbara says:

    Another 8 ema stick save, today by decimals

  6. vivelaamo says:

    Very bullish close. Sticking to my call of ATHs very soon. Don’t F with the Fed!!

  7. sixpack says:

    Don’t you bears know that you have all gone to the darkside. It’s never to late to come back and be part of the force!!

    • johnnymagicmoney says:

      Is your spaceship a little yellow bus?

      • sixpack says:

        Hey Johnny, found any good stocks lately?

        • johnnymagicmoney says:

          I’ve owned GILD for a long time. It’s been strong as of late. Valuation and cash flow it’s the apple of bio. It’s actually cheaper than Apple. A lot of the bio looks interesting here if you are a bull overall. In early 14 they got smoked …….kind of like last year with bio. Fundamentally there are some explosive stocks in immunotherapy. Real real progress in cancer. Lots of these the charts don’t matter for periods of time…they get acquired or come up with a drug and that development invalidates the chart in a nanosecond. Look at Juno bluebird kite pharma….they have been wallopped as of late…….again only if you are a bull long term.

          • johnnymagicmoney says:

            Gold meets my ROE model the others are speculative but are doing great things with great people

  8. Here’s the last of my external references for today. Short vid by Bo Polny summarizing his cycles work. I differ with his method in that he uses fixed duration cycles and I use market driven cycles. However the conclusions are similar. We’re looking for a breakout in Au Ag and a big crack in overall equities.

    For anyone familiar with the Jaws of Death megaphone, that is a typical response of an unstable digital system and there is no doubt it will oscillate to the bottom. In a physical system, it will continue oscillating in the megaphone until it encounters programming limits or if physical, zero.
    It can be modeled by a Z-Transform fed by a Kronecker delta impulse function, with proper parameters. I was going to try that but its involved and I’m rusty at the math. However the pattern is clear as day.

  9. bud67 says:

    per PUG – “Winter has arrived” ….yep, I can agree with that call….Bud

  10. gotta buy the dip in anticipation of turnaround and go Tuesday. No

  11. stmro says:

    This is one pathetic correction. I think we can turn off the machines until Wednesday. No big moves until the FED.

    • johnnymagicmoney says:

      I guess after a while you see everything but this is really something. The S&P hasn’t even dropped a half of a percent since that disastrous earnings list Friday (GE,V,MSFT,GOOG,SBUX). You see this massive long term resistance, a huge run up in short time and you think anything will take it down from here even though you know the earnings will probably beat because they lowered them too much. Then a slew of big heavy weight bellwethers report and miss the massively lowered numbers AND the reporting companies get walloped but the market doesn’t go down because all the selling goes into everything else. LOL You just shake your head.

      • Jim Guthery says:

        Be prepared for the good ole “delayed reaction” routine.

        • johnnymagicmoney says:

          delay being a year now is getting a bit ridiculous

        • Holly Silver says:

          No IMPULSIVE move yet. Not likely we end without one. If we are at a critical junction the impulsive drop right here should be followed by a snap back response. Much easier making money in a long defined trend. No clue short term. Need a “TELL” for the market to tip it’s hand. Until then I listen to all the thousands of technical and fundamental interpretations and use none. Of all the people claiming they found a good system or parameters I would love to see some back testing where they give a percentage of correct calls. Intuitive trading is as good if not better IMO. Name me ONE analyst, newsletter, firm, computer program, astrologer, psychic that has a long term track record of proven profits. If you do find it I can assure you a trillion dollars would be flowing into it immediately.

          • K-Tastic says:

            Seth Klarman at Baupost. Ray Dalio at Bridgewater. Stan Drunkenmiller at Duquesne. Will Danoff at Fidelity.

          • Holly, there are CTAs out there with multi-decade long track records. They have grown their clients’ money by 5x, 10x, 15x. Take a look at the long-term trend followers. Those strategies kick ass over the long term.

            You can resolve your ignorance by doing some pretty basic googling. Before you post next time, take 30 seconds to research your claim.

    • This market reminds me of the penny stock boiler rooms. All sell orders must be approved by me unless you have a client to cross it to.

  12. Jim Guthery says:

    Vix up 8% UVXY up 4%, not bad – even better TVIX up 3%

  13. Dismantling the PetroDollar. Dr. Jim Willie AAhttps://www.youtube.com/watch?v=t-LG0jPipfc

    Remove the AA

  14. rd3777 says:

    SPX should accelerate down when 2 is finished.

  15. Jimmy Porter says:

    Here’s where I see us at…

  16. Dex T says:

    GOLDMAN: There’s one force keeping this go-nowhere stock market from going down

    “Goldman’s David Kostin said in a new note to clients. “We maintain our forecast that S&P 500 will end the year at 2100, unchanged from the current level.”

    “Corporate repurchases are the main source of US equity demand,” he said. “We forecast S&P 500 gross buybacks will rise by 7% to $600 billion in 2016.”


  17. avkanoi says:

    Just does not feel like a bear market yet….. All dips being bought……

  18. H D says:

    Great WU Tony! Thx. From SPX 20(34) +77 to 2111 now –(34) to 2077. Equal/ opposite.
    Hollywood the new market timers? “The Big Short” Dec. 2015. “The 5th Wave” Jan 2016. “Money Monster” May 2016?

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