weekend update


The market started the week at SPX 2092. On Monday the market pulled back to SPX 2072, rallied to 2097 on Tuesday, pulled back to 2082 ahead of the FOMC statement, then rallied to 2100 after it was released. On Thursday the market pulled back to SPX 2086, rallied to 2099, declined to 2052 on Friday and ended the week at 2065. For the week the SPX/DOW lost 1.25%, and the NDX/NAZ lost 2.80%. Economic reports for the week were generally positive. On the downtick: new home sales, consumer confidence/sentiment, the Chicago PMI and Q1 GDP was lower. On the uptick: durable goods, Case-Shiller, pending home sales, the PCE, personal income/spending, and the WLEI. Next week’s reports will be highlighted by the monthly Payrolls report and the ISMs.

LONG TERM: bear market

We continue to label the 2009-2015 as having completed last year in December, and a bear market now underway. During the first decline of the expected bear market the SPX lost 15% of it value and bottomed in mid-February. We labeled that Major wave A. The uptrend that followed has thus far also lasted two months until mid-April, and oddly enough retraced nearly all of the first decline. Since B waves sometimes do this sort of thing, and occasionally retrace more than the A wave decline, (an irregular B wave), the bear market call remains.


Since this strong uptrend has been driven by beaten down energy and commodity stocks, we took a look at the NDX which has neither of these sectors. The NDX made it absolute price high in December 2015, after five Primary waves up from early 2009 and a clear five wave Primary V. It then lost 18% during its first decline, which was clearly five waves down.

NDX weekly

It then rallied along with the other three major indices until mid-April, when it came within 3.5% of its bull market high. After that high it has declined for the past eight days, losing 5.8% at Friday’s low, and is very close to confirming a new downtrend. Notice the negative divergences at the highs on the RSI and MACD.


The Nasdaq (NAZ) recently reached within 5% of its bull market high. Its recent decline of seven straight down days is not quite as bad as the NDX since it does have some energy/commodity stocks. Nevertheless it is quite close to confirming a downtrend too.

MEDIUM TERM: uptrend weakening

The current SPX uptrend, which started at 1810 in mid-February, continues to look corrective. We have counted eleven significant waves right into the SPX 2111 high, and the market confirmed the completion of the last wave by dropping below 2074 this week. We have been labeling this uptrend as Major wave B , with three Intermediate waves: a-b-c. At the high the RSI displayed a double negative divergence, like the one during the previous uptrend, and a negative divergence in the MACD. Quite similar to the NDX chart above.


Last weekend we noted three significant levels for this uptrend: 2111, 2074 and 2034. Exceeding the first would suggest the uptrend is extending, and still does. Breaking below SPX 2074 suggests the last five wave rally from 2034 completed, and it has. Breaking below SPX 2034 would suggest the uptrend has ended and a new downtrend is underway. And, it still does. Medium term support is now at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots.


As noted above at the SPX 2111 we counted eleven corrective waves up from 1810. Nine waves and thirteen waves would be considered impulsive. We counted five overlapping waves up to SPX 2009 to complete Int. A: 1947-1891-1963-1932-2009.  Then after a Int. wave B pullback, we counted another five overlapping waves to 2111: 2057-2022-2075-2034-2111.


Since that high a week ago the market has declined 59 points for the largest decline since the uptrend began. The previous largest decline was 56 points back in February. At Friday’s low the hourly RSI hit its most oversold level of the entire uptrend. A level not seen since the last downtrend in the RSI and some other measures. Definitely some downside pressure has hit the market after weeks of a cruise control uptrend. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum ended the week around neutral.


Asian markets were mostly lower on the week for a 1.9% loss.

European markets were all lower for a 2.4% loss.

The commodity equity group all rose for a 1.4% gain.

The DJ World index lost 0.70%.


Bonds are still in an uptrend and gained 0.4% on the week.

Crude continues to uptrend and gained 5.0%.

Gold hit new uptrend highs and gained 4.6%.

The USD hit new downtrend lows and lost 2.2% on the week.


Monday: ISM manufacturing and Construction spending at 10am. Tuesday: Auto sales. Wednesday: the ADP, ISM services, Trade deficit and Factory orders. Thursday: weekly Jobless claims. Friday: Payrolls (est. +210K) and Consumer credit. Best to your weekend and week!

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

About tony caldaro

This entry was posted in weekend update and tagged , , , . Bookmark the permalink.

399 Responses to weekend update

  1. Page says:

    WTIC will not go below $40 so new trading range for near term will be $40-$50 then $50-$60 range by end of year.

  2. hohoho598 says:

    Call us bulltards, but sticks and stones won’t break my bones, cause I have a bullet proof Ferrari.

  3. johnnymagicmoney says:

    Small observation…..in this entire uptrend the hourlys got back into significantly overbought conditions but at lower prices for the first time. I would seem to think there is some meaning there

    • tradeanimal says:

      The daily slow Stochastic (34,3) on SPY and SPX has broken down below 80 and that has usually signaled a correction. The signal had become embedded for quite some time. Hope you do ok with your short positions!

  4. Peter Sliney says:

    I think today is telling us there’s just not that much selling pressure yet to start a downtrend. Dips are still being bought. I don’t want it but I think we’re going sideways for months.

  5. Scott C says:

    not fun… tried to hold over the weekend for more and now we need to have this be a bigger bounce for a b wave since we only had 3 down. dont we need to be seeing 5 down 3 up for this bear call to work? we have 11 waves up, 3 down and now nice v shape recovery again. anyone care to micro count Tony’s chart to help those of us understand… uptrend weakening does that mean another high is possible with 11 waves in? How about ‘may have topped’ lol

    Also ABChart posted something with GDX on Friday. Saying 26 to 21. We never did get 17! Any chance this was an a small b and then a final C into 26 off the low and now we should see a 61.8% retrace for a B, then a final move up to C in the 35 to 40?

    Anyone think the miners in fact topped today, ahead of the indexes (I read a long time ago before all this money influx that the miners would turn before the indexes).

    pretty frustrated and confused today

  6. phil1247 says:


    if i was DA BOYZ

    i would close the SPX at 2081.62

    how bout you??

  7. No changes count. Same instructions as on the daily SP500 from March 2009. Newer high in the EWO .. moves on to a new third wave. This is ‘most probably’ an “A” wave. But, we started out counting it impulsively, and it remains so. It may be an impulse which is part of a correction, however. Notice there have not been 61.8% retracements in this wave – what I call a “no pullback” wave. These type of waves are “usually” A waves. And remember who said – based on the potential diagonal – and the “first of the month inflows” – today would be an “up day”, and not the crash some others were looking for.

    SP500 (2 Min)  5_2_2016 TC2


  8. Millan Tomic says:

    We may also form a flat, sideways correction into late June between 2110-2020 and work out overbought conditions that way trough time. If this is the case, then this will fit well as wave 4 alternation since wave 2 was short, sharp zigzag to 1890, and this could be this aforementioned flat taking 7-8 weeks. This of course would require USD to be contained within range, so FED neutral in June plus UK voting to stay. I think FED would be neutral while UK is a toss. Then wave 5 into late summer to 2175.

  9. phil1247 says:


    ext long tested and held

    target is 2075 which is also HWB .50 level..

    should be a battle there

  10. fotis2 says:

    Vive on the right must be going up again..

  11. Tony Jordan says:

    INDU wrestling with the 61.8% marker on the way back to Thursday’s high (SPX 2098) which is the high of the day so far. If 3 more sellers come into this market and it will fall like a stone, such is the volume. Wave sizes also look small unless nesting is going on. The most bullish thing I can see is that NDX has only retraced 24%.

  12. captbara says:

    Compq/NDX barring a dump from here will set up a buy, closing back inside BB and VXN below BB.

  13. stmro says:

    Broken back over the middle bb. Not good for bears if it closes here.

    • vivelaamo says:

      Its good for bears for around a few weeks every year! Yet they still continue to try and short! It had a chance to drop today but couldn’t do it. New trend high by the end of the week and ATH by the end of May. Good as confirmed.

  14. phil1247 says:

    now looking like es is in extension long to upside
    implying imminent upward accelleration

    careful cuz HWB 50% level is just above

Comments are closed.