Friday update

SHORT TERM: market drifts higher, DOW +45

Overnight the Asian markets gained 0.8%. Europe opened lower but gained 0.1%. US index futures were higher overnight, and at 8:30 Q1 GDP was reported higher: +0.8% v +0.5%. The market opened two points above yesterday’s SPX 2090 close, then rose to 2097 by 11:30. At 10am Consumer sentiment was reported lower: 94.7 v 95.4. After a pullback to SPX 2092 by 2:30 the market rallied to 2099 and closed there.

For the day the SPX/DOW were +0.35%, and the NDX/NAZ were +0.60%. Bonds lost 12 ticks, Crude ended flat, Gold dropped $9, and the USD was higher. Medium term support remains at the 2085 and 2070 pivots, with resistance at the 2131 pivot. Monday is a national holiday in the US.

The market opened slightly higher today, rallied to SPX 2097, pulled back to the opening level, then rallied to 2099 where it closed. Overall a positive day on extremely light volume again. The market has traded on the lightest volume since Christmas Eve three days this week: Monday, Thursday and Friday. This rally that started about a week and half ago has travelled 73 points without one notable reversal. If it continues to move higher we are likely to get an uptrend confirmation soon. Implications will be noted in the weekend update. Best to your three-day weekend!

MEDIUM TERM: downtrend weakening

LONG TERM: bear market rally


About tony caldaro

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87 Responses to Friday update

  1. torehund says:

    We are in the Zone, a time when sentiment flips in either direction. Do we really have the guts to face reality, call a spade a spade. Rid ourself of how we “wish it should be” compared to “how it is”. If we aren’t yet ready, take a pill and enter the age of collective delusion. It sure works; Scientology, Jehovas witnesses and many other authoritarian sects define the current truth and expel the non-believers as madmen, freeze them out, ridicule and silence them in order to uphold the hierarchy. Punched out, the diverging minds can hardly discern right from wrong; the majority decision always define sanity…
    This applies to the market too, reaction always lags the first astute observer. But that doesn’t mean you are wrong, market and group psychology is all about timing.
    If there is no good alternative at hand its maybe better to pretend all is sound, then problems may disentangle all by themselves…
    How far can you stretch the truth, should we believe the Norwegian police sold 50 tons of marihuana to infiltrate the criminals. Then, what about 35 ton of Heroin imported “legally” in 2009 and sold by the Norwegian police in order to confound two “criminals” from eastern Europe (the plot didn’t even put them behind bars).
    An expelled undercover police officer has been accused, and promises to speak openly as he has nothing to loose. The trial is being postponed and mass media is now attempting to build a credibility wall in front of the trial (as I see it).
    Lets see what happens to all the European currencies; confidence HAVE to be wearing thin by now, but I sure have been wrong before🙂

  2. Hi everybody
    for trader joe who is at the top

    is what you could put a graphic
    in daily and weekly because it gets complicated
    I thank you in advance

  3. Hi Tony
    Have been following your blog for a few year as its a more sensible version of elliottwave. I enjoy how you count often lines up with the key fundamentals.

    I think the bearish case is strong, Chinese banks have a large short USD swap position which is rolling every 3 mths and requires liquid USD to maintain the margin with JPM, C and GS & the European IB’s. Any further USD strength will force them to devalue the USDCNY. US listed earnings growth are negative when you add back one offs, global trade is shrinking look at the stats. for all the major economies, VIX is back at its lows investors have no fear. Don’t forgot bank regulation is forcing banks to reduce their balance sheets which is a form of credit tightening.

    I think the Chinese reserve stat’s due on 7th June should trigger some extreme volatility in the USDCNH which will trigger some extreme global risk aversion. Don’t forget if the FED tightens in June that is a interest rate hike for all those emerging countries which borrowed 7 trillion in USD unhedged over the last 7 years.


  4. fotis2 says:

    Crude nibling at shorts here having been stopped out at previous entry lets see ..

    • phil1247 says:


      if its a wedge it should collapse but….

      consider this…
      .dollar is surging and oil goes up

      massive oversupply and oil goes up

      bullish above 48.47 CLN6

      target 50.85

  5. R D. says:

    Anyone thinking that there is a large up move coming or a breakout ought be hedging your bets.The VIX & VXO = Bollinger Bands are telling quite a different story.There are too many
    conditions in the Markets that say a Top is imminent .

  6. Just noticed XJY filled its 90.25 gap I’ve been watching…and bounced.Not a lower low.Perfectly executed by the algos.Now up to gap 94–taking gold with it,hopefully.Short term stuff.Good luck all.

  7. rd3777 says:

    I looked @ this NDX futures chart and said….that;s it…it’s finished. The 40 week cycle is due 5/30 and the 7.5 year cycle is due 6/1 and there is plenty of history for a top on June 1 +- 1 day

  8. Bob Sagget says:

    “Earnings fall at fastest rate since the Great Recession”

    “After selling assets, cutting capital expenditures and buying back their own shares at a record pace in recent years, companies are now clearly struggling to produce any kind of growth.”

    • phil1247 says:


      refer to tonys study of decades of earnings and markets

      they basically dont matter

  9. Ajay Singhi says:

    A follow up to my previous post: I was expecting a fast rise this week. Counts from 1810:

    A) 1810-1931

    B) Triangle finishing at 1931

    C.1 1869-2009

    C.2 2009- 1969

    C3. 1969-2111

    C4. 2111-2025

    C5. going on. We seem to have finished C5.3. There should be a retest of 2065, early next week, followed by a higher high above 2100(ideally should be about 2105). I am expecting a failed 5th wave scenario, i.e. 2111 will not be crossed now.

    Irrespective of whether the short term moves play out exactly as outlined above, we are in Primary B and the low of 1810 will either be tested or breached in August but will certainly break by January 2017. No hard fall in June(should be about 5% and ideally we should break 2009 once).

    We are about to enter a long bear market, which will not bottom out in 2017. It will be much longer and will probably end sometime in 2019-2020 near SPX 1300.



    • AB: If you say you did something, then as far as I am concerned, it is an indisputable fact.. However I am concerned that you continue to expect the market to top out at 2100. Cela ne se produira pas. This is still a bull market and i do not want to see your children go without food.

  10. Jack Sparrow says:

    fiona_ what am I looking for in wednesday update- thx

  11. cosmos77 says:

    Thanks Tony. Tough corrective market. I am looking forward to the weekend update, which I hope will clarify the recent OEW posts.

  12. Just my strategy for gold that I’ll repeat if anyone is interested.The last bull in gold started in a similar way.Got $140 over the 200d…came back down all the way to test it before taking off for 3 1/2 years.If 1160 holds,we have a probable repeat of 2008.If not,and the dollar goes to the moon,our 4 months of fun are done.Good luck all.

    • EL MATADOR says:

      Ding ding ding 🛎🎊🎉 …. Any price retreacement within the 50-75% retreacement zone will do the trick … 1160 is in side that zone …. Prefer to see retracement near 75% but doubt we will see it

  13. Bob Sagget says:

    Are the Bulls Back?

    “This isn’t a rally that should embolden investors to take on more risk, but rather consider “selling into it” as we head into the seasonally weak period of the year.

    But that’s just me.

    One note though. The markets have not made a new high within the past year. What does history suggest happens next? 77% of the time it has evolved into a bear market. ”

  14. mjtplayer says:

    Wow, there you have it. The equity put/call ratio closed at 0.51 today, that’s the lowest reading since late July 2015 (0.50) which was 3 weeks before the Aug plunge.

  15. TMF says:

    The Fed is going to make the cost of $ more expensive to get the velocity of $ up and it should work.

    If you keep hearing low rates why rush to purchase ? Raise rates and there is more of an urgency. This behavior could cause an economic inflation surge. Gold is signaling it.

    • That’s a hilarious piece of logic there.

    • CB says:

      True, even though it’s not been happening as fast as they’d like. They’ve been quite good at coordinating their rate-hike talk with the seasonal pattern in home sales recently. Long -term rates bottomed in Feb 2015 and peaked last July. This year they bottomed in Feb as well. Smart kiddos…

    • magnus1234 says:

      I agree. And that is why we will not see any collapse in the indices. This type of thinking will start to sink into a broader investment community and the “hot money” who have thrived in low interest rates will lead the pack and change tack quickly.

  16. Gary Lewis says:

    Implications?? Oh my! P5 finally?

  17. rd3777 says:

    Here is a great example of the last leader standing AMZN and a daily chart that shows the continous move up since the Febuary low. Is it done….could be but it could have another day or two to go. Anyway I count it 11 waves up and the last wave is subdividing a,b,c,d,e….this chart is amazing and it’s a wonder what Fed money can do in the hands of the big paper traders. Short the %$^& out of this one…no recommendation.

  18. hohoho598 says:

    I feel a change in the in the wind… are we about to get the big bull call?? If we do guess what I’m doing… GRRRR

    In the mean time thank you Santa..

  19. Bob Sagget says:

    Thanks Tony. Quick newbie question.

    “If it continues to move higher we are likely to get an uptrend confirmation soon.”

    Does “uptrend confirmation” = “Bull Market?” Or does “uptrend confirmation” = “uptrend within a bear market”

  20. blackjak100 says:

    CPCE = .51. Anyone know last time we saw this reading or lower??

    • “The entire Western financial systemic, complete with USDollar-based foundation platforms, is breaking down. The breakdown is in full view, very noticeable, in almost every arena. What happened in 2008 with the Lehman Brothers failure event is currently underway with almost every single financial platform, structural entity, financial market, banking structure, and arena. In response to the Lehman killjob event, where JPMorgan and Goldman Sachs strangled the victim firm (by denying Lehman proceeds on countless asset sales), the entire Western financial system has been lashed together, tied together, and connected among its many member parts. The main parts are the big banks, which use derivative contracts to lash themselves together. They believe there is strength in numbers, which is true to some extent. But the consequence turns out to be that all will fail at the same time in a cascade of insolvent marred by illiquidity while steeped in corruption and market rigging.” … Jim Willie PhD

  21. Sandra Dons says:

    If we’ll make new highs I’m totally ruined..I hope TC is right

    • mjtplayer says:

      I feel your pain, it’s been a soul crushing experience.

      I might have to stop drinking Italian red wine and switch to Miller High Life – “The Champagne of beers”

      • Who would of imagined being a bear in this market would be so painful. Current PE of 24. 3 quarters in a row of declining revenues and earnings. 1st qtr gdp at .08. Japan negative interest rates, which is not working. China, beleive what you want. Greece, well 250 billion a year should keep them going. Puerto Rico default. Britain exit, us elections, why go on. Seems as if it’s rigged. Every down turn is haulted by a central banker or a rumor of oil. even if market dropped 50 percent PE would be 12. No clue on counts, lots of talk of a 5 percent pull back next week, we shall see. Looking forward to Tony’s weekend update.

      • ABchart says:

        So sorry for you Vive! are you forced to return to factory? 😂😂
        But we discussed together, since early May, a bounce toward 2100 late May.

        • vivelaamo says:

          We did indeed. How high will it go? No ifactory to return to as I’ve never worked in one. ATH’s will wipe me out and put me on the streets.

    • ABchart says:

      Every time the market moves 50 points you’re ruined! You should stop trading and start from the beginning by learning about risk management.

  22. Credit Northman Trader aka Northy — Despite an over $60 trillion increase in global debt and massive central bank balance sheet expansion several key global market indices are in downtrends with lower highs and prices actually below 2007 highs: $NYSE, Global Dow Jones index ($DJW) and the $FTSE All World index ($FAW):

  23. stmro says:

    It took 4 days to get us back to long-term resistance. The only thing the bears have going for them right now is the fact that we got here on 2 huge back to back gaps. I can’t imagine we go through ATH with those unfilled.

  24. 9pin says:

    thanks fish, good laugh on that one… good way to start the long weekend!

  25. nsteve24 says:

    Hilarious, another busted call on the way, unreal

  26. Page says:

    Thanks Tony. Have a nice weekend and delete the trollers’ posts.

    • fishonhook says:

      He just deleted mine for asking what uptrend or downtrend confirmed actually meant. Meanwhile your constant drivel saying’ last day to sell and get out’ or ‘buy gold today. before it’s too late’ stays.
      I am very disappointed Tony that you just want to be surrounded by mediocre yes men/women.

      • Page says:

        if you don’t know what the uptrend or downtrend confirmed means then you shouldn’t be trading, this market is not for kids.

        • fishonhook says:

          Please enlighten me and tell me what it means. It seems to nail the bottom and tops from what I can see

          • Page says:

            have a nice weekend fish… enjoy the long weekend🙂

            • He has a point though.
              The building of a trend as per Dow Theory is 100 years old and every method used today is a variation of that theory.
              We are in a sideway action since a year in a relative narrow range.
              There is no downtrend to be seen nor an uptrend. OEW does not to seem go well in that areas as we seem to be faked out on the top and at the bottom (expecting new highs in the last months of the last year and new lows at this time of the year)

              Only a break of the sideways action will tell the next move, all “confirmations” of non existing trends is just guessing, IMO

              The problem lies in the terminology.
              I understand that this blog is no trading advice and I appreciate the work done here.

              Then on the other hand, if I use the wording “downtrend confirmed”, I have to give a point at that the downtrend is broken and this cannot be done by changing views and counts.
              IMO these statements lead to wrong balanced trading among the readers of the blog. As when people read “downtrend confirmed” they will open shorts as they feel getting a confirmation for the targets given to come. That leads to unbalanced position fueling squeezes.

              • captbara says:

                People are using this blog for trading advice. But in the end you have to be responsible for your own actions, right or wrong.

          • ogdenfripp says:

            Maybe try the basic stuff, like HH and HL, down-trend line being broken (looks like somewhere at around 2070?), no retest of this break as Tony has been talking about the last few days ………. “The market needs to drop into the 2070 pivot range to get some selling pressure going”. That sort of stuff is on those T/A 101 sites. Or just wait till TC’s weekend update.

      • Buy Silver. One of the last opportunities before its expensive.

  27. rd3777 says:

    Well one wonders what the hell kinda animal this is bull or bear…..and the answer is both. IBM & GS are the perfect example of stock in corrective waves up. I have changed my labeling a tad as this wave continues to zig zag up. This market is now in the final C up subdivision and should end soon. The $VXO was down 3.14 today @ 12.12 which was a low for over a year ago and looks to be a capituation move down. The OPEC meeting is next week so crude will likely make a wave 2 top then. You have to have brass balls to short this market….but when the top comes the move down will be historic. btw the stocks i,m short topped back in January and a few weeks ago…so I’m resolute. Good luck and Tony thanks.

  28. gtoptions says:

    Thanks Tony
    Enjoy your Memorial Weekend

  29. A couple of comments regarding next Tuesday and Wednesday. Remember Tuesday would be the last day of the month which is often “window dressing” for funds (they will sell their losers and buy the winners at the end of the month to make it ‘look’ like the portfolio is in the right stocks). Then, Wednesday would be “the first day of the month” in which dividends from mutual funds, 401k’s, and company bonuses often get ‘reinvested’ into the market – which sometimes makes for a good pop on the first. (This is not trading or investment advice, but it potentially fits with a wave (iv) and wave (v), below). Here is another reminder of The Eight Fold Path Methodology for Counting an Impulse.

    SPX - Intraday - May-27 1624 PM (30 min) TC

    Have a good weekend all.


  30. The NYSE A/D line continues to surge to New Highs.
    It appears that only staunch EW Bears have been the one’s to ignore it… at their own peril.

  31. 123 abc says:

    “The market has traded on the lightest volume since Christmas Eve” —Any guesses as to what happened after that?! Yep, it was making the end of Intermediate-b and the beginnings of the ferocious Intermediate-c wave.

    Thank you Tony et al, look forward to the OEWcc (coffee-club) thoughts this weekend. Best wishes to friends & family this extended weekend.

  32. mjtplayer says:

    Thanks Tony! Max pain for those of us in the bear camp😦

    At least the 3-day weekend will be behind us come Tuesday, though we’ll have to contend with month-end and markets awaiting the ECB meeting on Thursday and jobs print on Friday.

    Happy holiday weekend to everyone!!

  33. Holly Silver says:

    I’m back…….. Please forgive the early intrusion but I do believe we will hit 2100 early Tuesday. Perhaps a bit cocky? This is some bear market. I hate to see a bull market react any better. But you can keep placing arbitrary stops to this run with those zillions of alternative alphabet placements.

    Assumptions based on cynicism and pessimism always produces misguided analysis. Even Pretzels Charts acknowledges the duality of this and proclaimed his bias from the start but showed examples of two very different possibilities

    The beauty in the charts is in the eye of the beholder. One sees clear skies while the other a bottomless pit. Most people using TA have a terrible track record. It doesn’t work simply because you don’t let it. Most predetermine where we will be in 3 months and look for any signs in current market to start that process going.

    Used fundamental analysis here at this critical transition. Made good money on equities rally off FED announcement and Drop from Gold. For me it was a slam dunk call and I tried to warn everyone but my insufferable hubris just ruined it. Like getting 2 aces in blackjack as the dealer showed 6. Then you received 2 more aces and split to a 4 hand bet. Not many opportunities but when you get it POUNCE.

    Some suggested that the next drop will be well within the last double lows and that is mine as well. I made this assumption however months ago. I didn’t need a chart telling me we were in a continuation of the secular bull. Most people fail to make money because they predetermine market positioning. I am guilty of said charge but being a pessimist by nature helps me to scope out all the angles when in a bull posture. To be perfectly clear my macro structure for the last 6 years is intact and I predicted this last phase would happen exactly as it is. Never could figure out when it would start but clearly this is it. We should see strong domestic economic data along with surprises on overseas recovery. This one two punch will accelerate the process much faster than anyone believes possible.

    To never include real world data in your TA process prevents you from seeing alternative structures. Unfortunately most have rigid minds unable to grasp this concept.
    I love my visual “intuitive” method but have to use some good TA for the timing since I play the short term moves. BUT SPX of 2112 breaks the back of the bear even though some suggest 2135 will. No matter, since BOTH should clear before we have another decent drop. 2170 should be to top of this run.

    Everything is set for a big expansion domestically. GDP over 3 percent by end of year. KISS. Good jobs, tight labor, wages, discretionary income, low inflation and easy borrowing. This will translate into profit growth.

    • Holly Silver says:

      BTW all the techies out there might want to give Rick Ackerman a look. His proprietary system based on momentum potential should fit in and add to your analysis. he has a free chatting site, in which I am banned, and he is a perma-bear that sees a crash around every corner. His system however does work on both sides of the move. His course is pretty expensive and most of his analysis is hidden from public view. As you can tell I was insufferable all those many years when I was the ONLY BULL in a camp of Armageddon bunker type mentalities. He can attest to my Macro view and exceptional calls. BTW his free chart has SP500 and the potential of a move to 2170. There is a specific target that has to be hit before he can declare the whole structure a strong potential. Today we just broke above his important target by a small amount late in day.

      Any info that adds to ones odds of making the right bet can’t hurt, can it?

      • Holly Silver says:

        What to look for in immediate future. Gold has not had a capitulation style drop(s) yet. It should and no later than 10 more trading days. The bet is a good one. it only has to show a strong dollar and bond yields holding up. Equities can drop or rise. Money should be exiting Gold into the more favorable alternatives. Equities could have stalled here but my best guess is it powers thru 2112 before any sideways to down action. My best bet is a pretty steep move higher from here breaking 2112 and possibly 2134 in same run. The huge outflow and shorting is reversing. What was good for the push down is great for the rebound springboard affect. The only caveat to all this is if we get great economic numbers. A sharp acceleration is not wanted right now. Upward strength without blowout numbers like in housing.

        Will be gone till Tuesday and you will not have the pleasure of listening to my rants. Good luck to all.

        • sactax911 says:

          I recall prior post (S). Very nice insights then and now. Based upon the above comments, I good bet would be to accumulate gold on the next sell off(s) for the mid/long term. Is that your view? Thanks

    • Good, Holly, SPX at 2101 as I am writing…Japanese PM is coming on TV with some sales tax proposals…and don’t think about “early intrusion…” Attack and destroy. PS: I am extremely pleased and happy with verbal fights going on this board. I also see people decalring that leaving the board and re-appearing in 2 min…that’s the spirit..Once again, attack and destroy.

    • CampFreddie says:

      Holly, very good posts, please stick around.

      • Holly Silver says:

        I post on differing sites as a diary or log of my bets and the thinking process at the time of those bets. When I fail badly I review these posts and try to correct things that I catch as bad habits. I also post my bets to keep myself honest. Making a bet and posting means it has to be with solid thought process behind it. Exposing oneself to failure makes you a better player. It also prevents you from remembering in a kinder light.

        Current bets made this Friday was based on immediate assumptions on strength of the move. I take a percentage of my winnings and bet the long shots only when dealt 2 aces (blackjack). Transition times are the most volatile and best betting scenarios. Short duration with sharp trajectories. I already did very well up to now and have no exposure to a crash or runaway move. My bets for the most part are rational and conservative. When I see fast action I have to bet for the homerun. You can’t make money in the long run without the big gains.

    • Quite a bold call that we’ll rise an additional 94 cents by Tuesday morning…cocky indeed…balls as big as church bells on this one, ladies and gentlemen…

      You are sounding like one Glenn Beck, who proclaims that academics are teaching everything wrong and you shouldn’t listen to history lessons…but…let me…be your history teacher…I’ll teach you the “right” history. Hubris indeed.

      Re-read your last paragraph, and tell me that we weren’t in the exact same place at the end of every bull market ever.

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