weekend update


The market started the week at SPX 2057. After a slight rising day on Monday, the market gapped up on Tuesday hitting the week’s high at SPX 2085. On Wednesday the market sold off, gapped up again on Thursday to a lower high, then sold off on Friday to end the week at SPX 2047. For the week the SPX/DOW lost 0.85%, and the NDX/NAZ lost 0.25%. On the economic front reports came in nearly all positive. On the downtick: weekly jobless claims rose. On the uptick: wholesale/business inventories, export/import prices, the PPI, retail sales, consumer sentiment, Q2 GDP estimate, and the treasury budget remained in a surplus. Next week’s reports will be highlighted with the NY/Philly FED, the FOMC minutes and Industrial production.

LONG TERM: bear market

For the past several weeks we had been noting that the Tech sectors, NDX/NAZ, had been displaying a clearer view of the growing weakness in the general market. We hold this belief because the Cyclical sectors, SPX/DOW, have been greatly aided by the upward surge in the commodity sector. The following few charts should add clarity to this belief.


The NDX topped with the rest of the major indices in late 2015. Then it declined 18% over the next two months into a mid-February low. After that it rallied for two months into a mid-April high, retracing 80% of the decline. Since that high it has rolled over and entered a new downtrend, which has already declined 6%. The NDX does not have any commodity stocks.


During the mid-February to mid-April uptrend, in the four major indices, the Transportation index was in the midst of its largest rally since it topped in late-2014. During its uptrend the TRAN rallied 27%, led by the surge in energy and commodities, and this clearly overflowed into the Cyclical sectors. It recently has confirmed a downtrend as well.


After the SPX bull market topped in late-2015 its first downtrend lasted until mid-February as well. Its decline, however, was only 15%. During its two month uptrend it nearly retraced the entire initial downtrend, falling only five points short. With surging energy and commodity stocks making up 10% of the index, this may have added the extra strength. While it has yet to confirm a downtrend, the DOW has already done so.

MEDIUM TERM: downtrend probable

With three of the four major indices now in confirmed downtrends, DOW/NDX/NAZ, it is fairly clear the mid-April high ended the recent two month uptrend. Continuing with the SPX/NDX comparison we would like to make note of some shorter term relationships.


After December 2015 bull market top the NDX’s first decline was about 260 points. After the mid-April uptrend high its first decline was about 290 points. Both of these first waves are about equal.


In comparison, after the December bull market high in the SPX its first decline was about 110 points. Yet, due probably to the continued strength in energy stocks, its first decline after the mid-April high was only about 70 points. Clearly commodities are having an impact on the Cyclical sectors. This suggests, however, when the Tech sectors start making new lows commodities will probably selloff, as the SPX/DOW have a lot of catching up to do on the way down. Medium term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots.


After the Major B uptrend topped in mid-April at SPX 2111 the market has been working its way lower. The first decline was five overlapping waves to SPX 2039. We have labeled this with Intermediate waves i/a, while we await some further market activity to clarify which label it is. The rally that followed to SPX 2085 we labeled Int. ii/b. After that high occurred on Tuesday we have been tracking an Int. iii/c decline.


Thus far we have noted three small waves: 2053-2071-2043. We could label these waves as Minor, but think they are of a smaller degree since we are expecting a significant decline during this downtrend. On Friday the SPX ended with a positive divergence on the hourly chart. If the market gaps down on Monday it will likely get cleared. If not, the market could rally 15+ points off the SPX 2043 low to clear the oversold condition. After that it should resume the downtrend. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots.


Asian markets were mixed on the week and lost 0.4%.

European markets were mostly higher and gained 0.8%.

The Commodity equity group were all higher and gained 0.5%.

The DJ World index lost 0.5%.


Bonds remain in an uptrend and gained 0.4%.

Crude is still uptrending and gained 5.3%.

Gold is uptrending as well but lost 1.3%.

The USD appears to be in an uptrend and gained 0.7% on the week.


Monday: the NY FED at 8:30, then the NAHB at 10am. Tuesday: the CPI, Housing starts, Building permits, Industrial production and Capacity utilization. Wednesday: the FOMC minutes. Thursday: weekly Jobless claims, the Philly FED, and Leading indicators. Friday: Existing home sales, a speech from FED governor Tarullo, and Options expiration. Best to your weekend and week!

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

About tony caldaro

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456 Responses to weekend update

  1. Thanks for the update.

  2. Holly Silver says:

    Holding onto my 208 SPY calls from Friday. Need to see consecutive double digit moves up to satisfy my bullish assumptions. I expect these levels to hold and rally off of this week. In fact I see 210 plus.

  3. hohoho598 says:

    @kjbo, you’ve got to be kidding… if this daily commentary isn’t encouraging day trading, then tell me what is? By default it is day trading analysis, so people try to time it going short at the bottom and long at the top of swings.

    Told ya they buying opportunity was going to be missed by the bears… GL

  4. TMF says:

    Volume in index ETFs is pathetic. Last time we had a big up day w no vol the low was broken.

    • mjtplayer says:

      Check out the VIX daily BB, now just 344bps in width – that is SUPER tight. The coiled spring continues to coil tighter and tighter…

  5. kvilia says:

    Full 50% retracement from the recent lows. Stopped out againg early today at $13.60, got back in into UVXY at $13.05. Good luck.

  6. gasman88 says:

    market has rallied 16 out of last 19 monthly opex weeks, not wise to bet against it. Wall Street is all about herd following scripts, over and over again. No need to use your brains and over-analyze, just follow the herd. This week’s script says BUY , so the algos are acting accordingly. This slow grind higher tick by tick, with no pullbacks feels very artificial.

  7. Dex T says:

    Based upon the numbers in the regulatory filings Buffet bought AAPL at an average share price of around $108 per share. It’s now at $94.30. Definitely not one of his better moves so far.

    Will it turn out to be another longterm flop like IBM? Interesting to see. Buffett stayed away from Apple for decades as it grew. Now that it has nothing new coming up he becomes bullish – or maybe his successors??


    • purplember says:

      i don’t think it’s buffett buying IBM and Apple – it’s his 2 money mgrs he hired. he gives them free reigns to do there job and not micromanage them.

      buffett isn’t a technology fan and he’s not suddenly welcoming it 20 years after the boom.

  8. phil1247 says:

    sold half remaining SSO


    • fionamargaret says:

      Is this stuff that Tony talks about…all the crash stuff……is this really what you believe is going to happen….??
      My charts are still bullish…….but won’t be below 2040.

      • fionamargaret says:

        ..and oil 48-50-52-55

      • alexhartley1 says:

        Fiona – will they be bearish below 2040? Or in a holding pattern? Is there a level the market needs to break on the downside for you to actually to be bearish or is that level 2040 for you and is that a closing level? Thanks in advance.

        • fionamargaret says:

          Alex, the pattern before this one said 1900, when we were at about 2090, so you short.
          This pattern said 2185 when we were at about 2030, so you go long.
          Thus the patterns give a macro (I use this word loosely) picture.
          The pattern we are using has a lower end of about 2040 and still says 2185.
          If we go below 2040, the pattern will change and I will tell you what it is.
          I worked out the bands for oil by reading the algorithms, so bought at 26 (26-40,40-30,30-50), but oil is going to break through 50 this time to 55 and upwards to the 70’s.

          Hope you got my message on Etherium – need a lockchain account…..xx

  9. stmro says:

    If we break through the middle band again i’m going to throw my keyboard out of the window. That, and stop relying on the middle band as support/resistance.

  10. phil1247 says:


    only four more points to 2074 SPX !!

  11. captbara says:

    Truncated C wave? Just kidding, I don’t believe in truncations.

    Bears should be cautious as I mentioned last week that yen could have already printed 5 waves down. If not yet then it is in 4 of 5.

  12. Page says:

    Looks like vive… is covering his shorts. I will wait for SPX 2100 then short.

  13. avkanoi says:

    Bearish count….. Out of the window!

  14. phil1247 says:


    is now at 1.618 extension of wave from sunday low

    2.618 is es 2080

  15. phil1247 says:


    nice call on apple last week!!

    looks like a false breakdown now …

    looks great above 92.45

  16. johnnymagicmoney says:

    As been the case since 2111 every time the market gets oversold on the hourly’s the price is lower (again today). Also, VIX is basing out and hanging in there on a big day. The headline on Reuters TOPNEWS is Buffet’s Apple stake. That just goes to show you how desperate bulls are. China missed on every data piece over the weekend btw

  17. Scott C says:

    Commodities didn’t get the memo about helping the spx did they… was it sent this afternoon?

  18. Dex T says:

    91% of S&P reported for Q1 2016- the blended earnings decline is -7.1%.


  19. kjb0 says:

    As I read through the posts (which I do for laughs), I noticed that a lot of the bickering is about day trades or short term swing trades. This blog is not, and has never been about day trading. Tony knows, as do most serious traders, that about 90% of traders lose money trading this way. Day trading makes your broker rich and you poor. How is it working out for you so far? Did you ever hear of a brokerage firm claiming ” Come trade with us, our day traders have an 80% day trade winning ratio?” Why do you think there are thousands of indicators, chart patterns, strategies and trading systems out there? They are all illusions to confuse you. They are there to make you think that you can beat the system and make a lot of money if you just find the right combination.
    You can not………….but you keep trying anyway.
    Trading longer term is simple. Listen to Tony. He is here to help, as was the purpose of this post.
    PS. No offense to all the millionaire day traders on the blog.

  20. rd3777 says:

    Short squeeze as crude trys for $50. By my count we should see a reversal today…who knows…

  21. johnnymagicmoney says:

    Gartman, I mean Vive please go long so I can feel good about my shorts

    Much appreciated

  22. fionamargaret says:


    OIL and $SPX…….I know Tony doesn’t like oil, but…….check the chart…

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