weekend update


The market started the week at SPX 2047. After a rally to SPX 2072 on Monday, the market worked its way down to SPX 2026 by Thursday. Then an options expiration on Friday closed the week at SPX 2052. For the week the SPX/DOW were mixed, and the NDX/NAZ were +0.95%. Economic reports for the week were again positive. On the downtick: the NY/Philly FED, and the Q2 GDP est. was lowered: +2.5% v +2.8%. On the uptick: the CPI, housing starts, building permits, industrial production, capacity utilization, leading indicators, existing home sales, and weekly jobless claims declined. Next week’s reports will be highlighted by Q1 GDP, Durable goods, and more Housing reports.

LONG TERM: bear market

For the past few weeks we have been noting that the Tech sector (NDX/NAZ) is probably a better indication of the general market than the Cyclical sector (SPX/DOW) due to the strong rally in commodities and commodity stocks. Last week the commodity rally was somewhat illustrated by the recent uptrend in the Transports – it’s strongest since it entered a bear market in late 2014.


Another illustration of the commodity rally is displayed with the GTX. It too started to advance in January, like the Transports, and has had it best rally since it resumed its bear market in mid-2014. Some suggest commodities have bottomed. Longer term cycles suggest the recent rally is just another uptrend in a volatile bear market.


Our count and labeling for the SPX remains unchanged. The bull market lasted from 2009-2015 and completed five primary waves. Primary waves I and II ended in 2011, and Primary waves III, IV and V ended in 2015. After that late-2015 high the SPX declined 15 % for Major wave A, and then rallied nearly back to the high for Major wave B. A Major wave C decline is now confirmed and underway.

We continue to hear there is lots of bearishness, and if everyone has sold then the market has to go higher. Every week we post Investor sentiment right on the weekly chart, and update it monthly. This is an adjusted stock allocation figure displaying what the public is actually doing, verses what they may be saying every week. Since the beginning of 2013 the public has been bullish, and not once has turned bearish. That’s three plus years despite the recent steep corrections.

MEDIUM TERM: downtrend

For the past couple of months we had been counting the first downtrend of this bear market, Major wave A, as a five wave structure. However over the past several weeks we had been noting that the declining waves did not really look impulsive. They looked more corrective, which typically occurs during bear markets. As a result we have been carrying the labeling of the current downtrend, Major wave C, with both impulsive and corrective labels. Since bear markets can unfold impulsively, i.e. 2007-2009, and correctively, i.e. 2000-2002 it usually takes a couple of trends before it can really be determined which pattern fits the new bear market. We think we have seen enough now to make that determination.


As noted on the daily chart above we are updating the count to display a double three decline for Major wave A. Major wave B remains unchanged as an a-b-c uptrend. Major wave C should now also unfold as a double three to complete Primary A, of a Primary ABC bear market. Major wave A best counts as a small zigzag to SPX 1993, a zigzag to SPX 2082, and then a large elongated flat to SPX 1810. Agree, it is an odd looking pattern. We have, however, recently seen this pattern before and it was indeed corrective. Take a look at Primary wave II during 2011. At first glance it looks like five waves down, but it was not. In fact it looked like the 1987 crash pattern, which tipped us off during 2011 that it was indeed a corrective pattern. The market has apparently discovered a new Elliott wave pattern, and is making good use of it – confusing as many as possible. Medium term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots.


As we have been noting in recent weeks all the activity during this bear market has been corrective. The current downtrend is also unfolding in corrective waves. From the SPX 2111 Major wave B uptrend high the market declined in seven waves to SPX 2039. Then after a nearly straight up rally to SPX 2085 it corrected in another seven waves down to SPX 2026 on Thursday. This seems to be the pattern since the bear market began: seven wave or eleven wave movements for the larger waves.


As a result of this labeling update we have shifted Intermediate wave “a” from the SPX 2039 low to the recent SPX 2026 low. And we are now expecting an Int. wave “b” rally to be underway over the next several days. The upside target is the 2070 pivot range, but we would not rule out a run to the 2085 pivot range too. After it concludes, the recent low at SPX 2026 becomes a critical level. When the market closes below that level the possibility exists for another “waterfall” event. We will keep you updated. Short term support is at the 2043 and 2019 pivots, with resistance at the 2070 and 2085 pivots. Short term momentum ended the week below overbought. Trade what’s in front of you!


Asian markets were mixed on the week for a net gain of 0.2%.

European markets were mostly higher and gained 0.7%.

The Commodity equity group were mixed for a net loss of 2.0%.

The DJ World index gained 0.1%.


Bonds remain in an uptrend but lost 1.0%.

Crude is also in an uptrend and gained 2.9%.

Gold in an uptrend as well but lost 1.7%.

The USD is in an uptrend too and gained 0.8%


Tuesday: New home sales. Wednesday: FHFA housing prices. Thursday: weekly Jobless claims, Durable goods, Pending home sales, and a speech from FED governor Powell. Friday: Q1 GDP and Consumer sentiment.

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

About tony caldaro

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

345 Responses to weekend update

  1. Money coming out of gold for stocks.Brexit less likely.Gold correction here.Now Phil,you may get your 1190…even the 200d a possibility to shake it out.If it’s a new bull,1160 should be the ultimate buy area.How quickly is the key.Plus the dollar needs to turn in June (with no rate hike?).But today looks like a long drag down for PMs.BBs about 22.70 on GDX (now at 23.10).Last time it dropped below the lower band was January.

  2. el matador
    when is the fireworks gonna start in crude?

  3. fotis2 says:

    Going to try a 1/2 short here with stop just above highs and add another 1/2 if it closes bellow 46.70 on daily think it could test TL next couple days

  4. mjtplayer says:

    With less than 1hr to go before the close, the SPY is well on pace to print the lightest volume day of 2016.

    40m shares traded as of now; lowest volume day is 62.18m shares from May 2nd.

  5. avkanoi says:

    This move ended @ 2058 will be confirmed only below @ 2025?

  6. while most are looking for one more push to 2070-2090. I’m shorting right here. no way I’m holding any long over night. Hoping just once, this market throws the bulls a hard curve ball across the plate. Not letting anyone in to add to the shorts at a higher level. watch tomorrow be a gap and go 30 point day. Good luck everyone enjoy your 3 day weekend coming up.

  7. A teeny bit of wax on, a teeny bit of wax off. Down to the trim.

  8. simpleiam says:

    I know how much this really matters (or not) to some, esp. BJ… LOL!
    TRIN was at 2.01 this morning, with 58% strong buy; it’s now at about 1.10 with 0%, at Hold.

  9. ibra76ig says:

    MMM is forming the second descending peak at daily time frame.

  10. simpleiam says:

    Opinions on this article are welcome. I want to retire during the next (or present) Bear market; hopefully near the bottom.


    • aahmichael says:

      The article has many flawed assumptions, the worst of all being that the risk in stocks and bonds remains at a constant level and never changes. The article also assumes that it’s impossible to time the market.

  11. mjtplayer says:

    Wow, it doesn’t get much more boring than this. Sideways day, tight range and no volume, ZZZZzzzz….

  12. In the yellow caution zone of a “Game Over” signal on this chart: http://schrts.co/gtNf85

  13. Heard from the ESF “Whoa Nellie”, as the derivative teetering Tower of Babel sways in the breeze.

  14. simpleiam says:

    More Contractors leaving here at the end of this week. Whittling them down to almost zero.

  15. H D says:

    About 10 hours of SPX at or near 20(55), maybe the summer BOTs already running.

  16. ABchart says:

    I will not be surprised if the SPX closed at 2050 +/- 1 point tonight. No volatility.
    Tomorrow will be more interesting with a possible Range of about 20/25 points (2040> 2064).
    I think we will have à 40 points range for the week. Buy near 2040, short in the 2070/80 area.
    See you tommorow!

  17. Watching GDX…the last two times it dipped below the 20d SMA,it stayed under at most,3 days.Today is day 3 of this move..20d about 24.70.Would need dollar weakness vs euro..we got it vs yen.We will see.

  18. mcgcapital says:

    Tony, if we don’t manage to get a rally going here, would this favour a similar count to MJT Player’s below? I.e. 2111-2026 minor A, the rally from 2026-2058 being minor b and a move through 2026 for minor c of int A

  19. Page says:

    I think today is the last chance for bulls to exit.

  20. frommi2 says:

    Russel 2k has finished a clear 5 wave impulse (wave c of a running correction) from the low 3 days ago, I think we have started wave C down now, should see at least see a 3-5% downmove this week.

    • cosmos77 says:

      Looks like you made a great call frommi2. Our colleague, Nagid Gulam has the RUT in a short-term uptrend in an overall bear market. I thought I had shorted too early, and was hoping the red 34 ma would contain the uptrend. I was really concerned today because the RUT was the strongest index, but the the (-D) in the RSI has given me hope (lower top in the RSI). Let’s see what transpires tomorrow.

  21. mjtplayer says:

    Daily VIX BB now at just 307bps width – simply amazing. Tightest band width in years, they just keep getting tighter and tighter – a coiled spring

  22. argento1 says:

    We had a very strong March and April, now a lot of pundits are expecting another strong wave up….seasonals and cycles down from here, given we see some topbuilding into end of July and then the bulls will get smacked again!

    Thanks for the analysis Tony, also seeing a very similar top building on our market going back to 2011 and your view confirms it!


  23. ABchart says:

    Oil live $47.50, target this week maybe toward $50.

    SPX support 2038/40 target this week maybe toward 2080.

  24. mcgcapital says:

    Europe behaving like it wants to go down. It’s possible that the rally through Thursday and Friday off the low was just positioning ahead of opex. Got my eye on whether this unwinds today.

    • ABchart says:

      After a drop of about 1% this morning in Europe, the CAC and DAX did a higher high. So te SPX will drop at the open then a higher/Friday, or do a higher/Friday then drop toward 2040/45.
      Algos are the same in London and the New Jersey lol

    • Was considering this too. Put/call ratios were high almost every day for weeks, and we still saw a 6 or 8 week low the day before expiration. They ended the week up by the smallest up amount (for a positive week) since November, and basically pinned SPY around 205 for expiration. The 205 pin was basically what Rachel Shasha pointed out last weekend as a confluence target for expiration.

      But like you are suggesting, I’m really wondering if Thursday and Friday were just OpEx positioning to save that pin.

      This was the first time since at least 2011 that three week highs into expiration fell in week 2 (at 2085) and three week lows fell in week 3 (expiration week). Not sure what it means other than that this looks to be pointing down unless 2085 is somehow taken out quickly.

  25. blackjak100 says:

    Could this be the longest recovery ever? Next recession due 2019-2022????

    • Everyone sees what they want to see…Companies ‘drowning in debt’ despite almost $2 trillion in cash http://www.cnbc.com/id/103654200

      • blackjak100 says:

        I don’t want to see the longest recovery ever believe me. I just read charts and it supports a big wave 3 coming

        • blackjak100 says:

          When I see more and more commercial and residential structures going up, I know the expansion is continuing. I’m still seeing this today and it’s ruining the great twin cities area IMO.

          • Bob Sagget says:

            Are the commercial and residential structures being occupied?

          • johnnymagicmoney says:

            BJ – numbers show the Midwest is the strongest right now but out west numbers are declining …..what you are seeing is not indicative of the whole country

            • blackjak100 says:

              I get that, but I haven’t even seen slowing here…know what I mean? Seems to be picking up.

            • ABchart says:

              What is the Midwest?

              • zvyezda says:

                AB, we use the term variably, and it could technically be termed Mid-East at times, but anything that drains into the Mississippi River. West of the Appalacian Mountains but stopping just East of the Great Plains at the base of the Rocky Mountains.

              • ABchart says:

                Thank you Zvyeda! So it is a region in the USA. Found a Wiki page about Midwest after your answer.

              • zvyezda says:

                The soil is richer in that area than the Great Plains and with more rain, so it is more profitable to use that area for growing crops ( & some livestock) versus primarily raising cattle as in the Plains.

          • Dex T says:

            Maybe… or maybe they are overexpanding and will be left holding the bag

    • cosmos77 says:

      It is not clear to me, from reading this article, why this expansion’s peak must reach 126.0. Why not top out here at 123.9? All the previous expansion peaks ended at various levels. Although they have been progressively higher, I see no reason that this peak has to be higher Also, the article doesn’t address bear markets, which is my concern right now. Not all bear markets end in a recession. We could have a bear market now while the Fed keeps the economy propped up enough to avoid an official recession. The article leaves some questions unanswered.

  26. jp7972 says:

    Hi Tony
    Thank you for you awesome updates. I’m normally one of the 99% who observe without comment but I have a question that I hope you might answer. I was expecting that major C would make a lower low than Major A, to conclude Primary A. However, with intermediate a at 2025 and intermediate b, potentially targeting 2085, won’t intermediate c need to be 3 or 4 times the length of int a to make a lower low? I know you mentioned a waterfall type decline in your weekend review, but would this fit?
    I know you don’t have a crystal ball, but am just interested in whether int c needs to or should make a lower low than a.

    • ABchart says:

      So what do you suggest for intermediate “a”? 1968 or only 1980/90? 😂

    • 123 abc says:

      In regards to Major-a wave, Intermediate-c = Intermediate-a * 2.5 (approx).

      In regards to Major-c wave, assuming Intermediate-b ends at the 2070 pivot, then Intermediate-c = Intermediate-a * 3 would end Primary-a at 1812 creating a double bottom with Major-a wave. However, OEW expects Primary-a to end at the 1699 pivot range, which would be Intermediate-c = Intermediate-a * 4.382 (which is quite a waterfall!)

    • tony caldaro says:

      welcome JP
      You are correct.
      Int. A was only 85 points, so Int. C would need to be 250+ just to reach the February low.
      Quite a huge drop to project ahead of time. So let’s see what unfolds.

    • cosmos77 says:

      Great question JP and thanks for the answer Tony. The next couple weeks are very important. The plot thickens.

    • gokalg says:

      JP I think Int c may not be one shot but can drag out

  27. magnus1234 says:

    DAX 30 continues in wave V. It is now 13 months since DAX peaked at 12223 April 10th 2015 and bottomed at 8696 in February 26th 2016. That is almost at 30% decline in 10 months. Now in a uptrend on the daily chart since begining of May.


  28. locanbbs says:

    UPDATE: Spx (hourly) –

  29. ABchart says:

    Breaking: Bayer (Germany) offer $62 billion for Monsanto (USA). 20% premium. All cash bid.

  30. ABchart says:

    Before (May 1st)

    After (May 20)

  31. ABchart says:

    Thanks Tony!


    • fionamargaret says:

      Thanks AB.

    • ABchart says:


      We will see, but since The next drop could be about 400 points from 2111 (Major “c”), I think your intermediate “a” is still too short (only 86 points). Intermediate “a” of Major “a” was 110 points for a major “a” shorter than “c” (294 points vs 400?)
      So I suggest the next lower low, toward 1968 or only 1980/90, as the intermediate “a”,
      followed by a sharp bounce of about 80 points as Intermediate “b”. Before intermediate “c”

      • Praveen Vishnu Shamain says:

        @ABchart, Even If I assume that your roadmap is possible, I have questions on the time taken by your Intermediate waves “a” & “b”. Intermediate “a” is from mid April to first week of June and Intermediate “b” takes only 1 week? Howz that possible? Are ‘b” waves supposed to be lengthy, time consuming ones?

        Your view, please. TIA.

        • Praveen Vishnu Shamain says:

          Aren’t ‘b” waves supposed to be lengthy, time consuming ones?

        • ABchart says:

          1/ Intermediate “b” in one week is enough. Pullbacks can be done quickly and sharply.
          2/ On the chart, I wrote that I expect the drop from late June, early July. So 2 weeks distribution between 2040/50 and 2070/80.

  32. locanbbs says:

    Nikkei breaking down in futures, carrying with it ….?

  33. Sid @ His blog posted free May 20 hurst cycle prediction May 27-31 to August 2017 SP 500 target 1100

    Might be same as Tony’s prediction!

    Interesting read and charts. http://elliottwavepredictions.com/http:/elliottwavepredictions.com/sp500/hurst-analysis-of-the-sp-500-starting-at-the-year-1966-high/

  34. simpleiam says:

    New charts from Dr. Boom, as of May 20.

  35. simpleiam says:

    When a person tells you who they are, and are willing to go to the matt to prove it, you need to believe them. Granted, he isn’t Yellen, but The Fed has clearly signaled, they will raise the rate in June.

  36. Arthur Knopf says:

    Was Last Week an Accumulation Week?
    Last week’s trade alert stated a shorting target from a high of SPX 2070/80, but I was expecting it at the end of the week not on Mon so I missed that one. My expectation was the opposite of what happened, but I got the whipsaw right. What we saw were declines every day after Mon that looked like the bottom was going to drop out, only to see miraculous recoveries by the end of day. What actually happened is more likely accumulation pointing to higher prices ahead, while I was expecting distribution pointing to a top.

    We have three big events over the next month that will determine were the stock market goes. The first week of June is the job report and should be weak given the rising initial claims (see the 1-yr trend at research.stlouisfed.org/fred2/series/IC4WSA). A weak jobs report raises questions about a Fed rate hike so expect a positive response (my target is SPX 2085). Next on June 15th the Fed announcement where a “No” vote will likely see the SPX up to 2100. Finally, the Brexit vote on June 23rd where a “No” vote will likely see the SPX up to the previous ATH at 2135. Different outcomes will likely not be positive.

    Sentiment is virtually unchanged for the week both intermediate (2 to 6 months) and short term (2 to 6 weeks).

    more at sentimentsignals.blogspot.com
    * short-term charts, conclusion, trade alerts

    • jhjoyner says:

      Concensus Bullish sentiment is 71 and was 72 in June 2015. We know what happened in August. May want to look at the charts for that period.

  37. fionamargaret says:

    I know what you do Vive…….!!

    • fionamargaret says:

      …answer to the very last comment on the update …..don’t quite know how it ended here…sounds quite ominous, but not…

    • Jack Sparrow says:


      • fionamargaret says:

        ..that’s plain silly….

        • Jack Sparrow says:

          I thought Vive does something in Vancouver_ is that not so

          • fionamargaret says:

            I don’t know Jack, I was answering his reply to my suggestion that “waterfall” suggests July 4th, hot weather, folks in tubes paying no attention…..and then fireworks. He said he thought I was English…..and I said but I know what you do.
            Now what did you decide about oil, the market etc., I have a really interesting twist…..but will wait to see how the numbers work out from last week…x

  38. blackjak100 says:

    Wonder if the miny gap at 2040ish from fri gets closed tomorrow to form very nice RS of IHS???? It would also correspond to 50-61.8% retrace for a wave ii of c. What a wonderful opportunity to get long or close shorts if it happens.

  39. ibra76ig says:

    Hi Tony, I have posted several charts for 3M, but they didn’t appear.

  40. rd3777 says:

    Just my guess since this last down move in some stocks was a B down and the late toppers finished 1 down. I think we rally along with crude to possible SPX 2084 or so to put in a wave C. Crude will also be up in it’s final C and that should be enough to run the shorts out and reset everything for the big wave down. Now it could fall out of bed here and not complete what to me is a needed rally to set the 27-28 day analog. I’m sure if we pop up into the 2080’s eveybody will scream the correction is over and then the hammer falls.

  41. Interesting story in my morning paper today:
    “Slumping profits mean tax revenues will decrease”.
    Estimates for Michigan were too rosy-by 174 m dollars.Two reasons:Retail sales are down and corporate profits are down the last two quarters.Revised estimates
    for 2017 and 2018 are also lower.
    What to make of it?Various views of a growing economy worthy of interest rate increases are wishful thinking–at best.Michigan is a pretty good bellweather and their fiscal experts reporting such numbers are to be believed more than stock market analysts.

    • I would also add, that e retailers like AMZN don’t pay their full share of taxes? Correct me if I’m wrong.

    • EL MATADOR says:

      Our brightest Govt/Fed heads believe that by their ability to communicate their policy intentions/plans (i.e. interest rates) to the markets/investors/consumers that they can keep the optimis alive and humming, hence preventing a relapse of their 1936-37 mistakes that lead to market waterfall of 1937…… lot of similarities between back then and now

      • EL MAT,it’ll be interesting to see how yen/dollar interpret the public argument between Lew and the Japanese treasury rep.You’d think Lew would win that one–meaning dollar lower-yen continuing its uptrend.Maybe wishful thinking,but hope not.

        • EL MATADOR says:

          Gold still point down MT and U$D still point up MT
          Pay very close attention to monthly closing candle as it will inform us of just how much deeper gold will decline and how much higher U$D will rally

  42. I’ve had a tangential connection to the development of Apple’s new Mother Ship campus, and I can’t help but wonder if the ‘Skyscraper index’ idea may prove to be a sign for Apple, i.e. the construction of magnificent, record-breaking facilities portends a looming major decline. I know they have $200B in the bank, but still…I always thought this concept was interesting…


  43. torehund says:

    Age of sophistry gone wild…Western politicians are nevertheless still in some sort of a waining state of control, still. But when the snake-oil man isn’t drinking his own oil anymore, thats a problem (glare of BELIEF has left their eyes).
    As truth is sufficiently subverted, next step is coercion or a mental of physical revolution. Lets hope for a mental revolution, it takes no more than all of us calling a spade a spade. Is that so scary ?

    • Ask yourself – is this really appropriate for an EW board? Does your right-wing tin-foil-hat-wearing conspiracy theory political nonsense have anything to do with the near-term direction of the S&P 500 and its possible Elliot wave counts? Does it really?

      • torehund says:

        RS, thanks for you reply:
        I would not post it if it wasn’t relevant. Maybe not tomorrow for all the day traders, but we are definitely close to an economic and societal upheaval.
        Look no further than the enormous international currency moves that are in front of us in Elliot Wave terms….something fundamental has to trigger it. When and by what ?
        What drives a storm in currencies; CONFIDENCE. Question is, at what threshold does loss of confidence break a currency ? If we can anticipate a turning point, thats what investing and not only currency trading is all about.
        I don’t know if it was ever possible to short the Venezuelan pesos; but being vigilant could have saved the Venezuelans from now sitting with worthless pesos.
        Many would say that the EU is different from an end stage Marxist regime, and it still is. However we can already see the contours of societal and economic breakdown evolving.
        When cracks appear politicians conceal the truth and dip the lies with snake oil to extend a system upon which they thrive.

        • torehund — Good reply. Your concerns remind me of many comments made on the https://www.billcara.com/ Blog (barely functional now) re Capital Markets & Social Equity

          • torehund says:

            Thanks Kyle, stock trading encompasses nearly everything known to man, mathematics, political and social science, psychology, astronomy and many more subjects + philosophy (which is a summation of them all).
            Elliot Wave is complex geometry, the inflection points can otten be foreseen by EW, but from there on its mostly flip a coin (in my opinion). Would it not be great to reenforce Elliot Wave theory by a little philosophy. Heck I don’t know if it helps(maybe its a waste of effort), but I am trying to turn every stone.
            Philosophy is politically neutral; therefore right and left wing views may be used interchangeably, and should be of no offense to anybody.
            The bull becomes a bear and socialism can turn tyrannical. All good old intentions turn sour after a while, shelf life 🙂

            • TH – That was my 1st post on this blog. In fact I didn’t know there was a Caldaro Comments section until a few weeks ago. Although I have been following his Daily & EOW Updates since Nov 2013, I’m more of a Volume-Profile trader myself, but I appreciate more of the HTF (Higher-Time-Frame) views.

    • Where did this BS come from…

    • vivelaamo says:

      What the hells he talking about!?

    • zvyezda says:

      Torehund, excellent video. It is extremely relevant to not being short-sighted in investments nor life.

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