weekend update


The market started the week at SPX 2099. After Monday’s holiday the market reached SPX 2103 on Tuesday. Wednesday the market declined to SPX 2085. Thursday the market rallied to SPX 2105, then returned to 2085 by Friday morning before ending the week back where it started at 2099. For the week the SPX/DOW were -0.2%, and the NDX/NAZ were mixed. Economic reports for the week were numerous and generally positive. On the downtick: the Chicago PMI, consumer confidence, construction spending, auto sales, monthly payrolls, ISM services and the Q2 GDP estimate. On the uptick: personal income/spending, the PCE, ISM manufacturing, the ADP, factory orders, plus, the unemployment rate, trade deficit and weekly jobless claims all improved.

LONG TERM: neutral

While OEW continues to quantify medium and long terms waves successfully, it still requires the observer of the wave patterns to interpret them properly. With 120 years of historical stock market data as reference, this is generally not that difficult. What we present here, in this blog, is an opinion of the current wave pattern that is unfolding in the market. It should not be taken as a recommendation, or investment advice. It is only an opinion that is subject to change, and sometimes wrong.

We are in an unprecedented era of Central Bank market intervention. It started off simply enough in late-2008, and then expanded dramatically in early-2009, when the FED started buying debt instruments from their primary dealers (QE 1) to increase liquidity in the US banking system. This was followed by QE 2, Operation Twist, and finally QE 3 which ended in late-2014. The goal has been to improve the economy by what is termed the Wealth Effect: higher asset prices, creating more consumer spending, that would eventually trickle down to the rest of the economy.

Europe’s ECB eventually entered this liquidity/wealth effect scheme in 2011 with their LTRO version, and subsequently a full scale QE of their own which is still ongoing. In fact they are currently buying corporate and government debt. In recent years China and Japan have not only bought debt to increase bank liquidity, but admittedly have been buying stocks in their own stock market to fuel the wealth effect. Historically this kind of Central Bank intervention is unprecedented. US banks, for example, are now sitting on $2.4T in excess reserves. While historically the most they have ever had in excess reserves was $19B in 2001. The build up in Central Bank balance sheets has created massive worldwide liquidity.

While the Central Banks have been building their balance sheets, they have been intervening in various assets classes. Government Bond and Mortgage Backed security purchases are the most obvious, as they have been the foundation of the FED’s QE programs. Currency market intervention occurs on a regular basis, and is eventually reported some months later. Stock market intervention is generally never reported, with the exception of China and Japan’s recent admissions of directly buying equities to prop up their stock market. The FED, however, never reports direct stock market intervention, even though most market pundits know they were given that authority in 1988: https://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets. This is the fundamental opinion, the following is the technical opinion.

For the past 60 years the SPX, and past 50 years the NYSE index, (both from inception), have moved perfectly in sync with the DOW on a long term basis. Their bull markets have been synchronized and their bear markets as well. Even after stock index futures became popular in the 1980’s these three indices remained in sync. There had been no exceptions, until 2011. When we first observed this deviation, we thought it was not a problem and these indices would eventually re-synchronize again before the bull market ended. Then another deviation occurred in 2016. And, this is where we are today.

We are now observing a bifurcated market between the futures driven SPX/DOW and the cash driven NYSE. Our OEW model is projecting a bear market in the SPX/DOW, which we track closely, and an ongoing bull market in the NYSE, which has received a lot of attention lately due to the strength in market breadth (NYAD). The only thing that can account for these deviations is periodic central bank intervention in the futures market. The FED can easily prop up the futures driven indices with futures purchases. But can not prop up the $24T NYSE cash market without derivatives, as it is too large to manipulate.

As a result of this market manipulation we now have two quantified counts with opposing views. The futures driven SPX/DOW, (NDX/NAZ as well), in a bear market. And the cash NYSE still in a bull market. Impossible? Actually very possible according to the OEW model.


The NYSE quantitatively counts as four waves with a potential fifth wave underway. Five waves create a bull market. The SPX/DOW counts as a completed bull market in 2015, a large wave down into 2016, and a large wave up underway. These two large waves can be counted as waves A and B of an unorthodox bear market. Unorthodox in a sense, that the SPX/DOW can potentially make all time new highs while in an ongoing bear market. Historically, this has occurred before and in EW terms is considered an irregular B wave.


Irregular B waves can make marginal new highs, or even move much higher. Typically these B waves have a price relationship to wave A in multiples of 1.382, 1.50, 1.618, or even 2.0 times wave A. As a result of this observation we are forced to go to a long term neutral opinion. With a structural bear market in most of the indices, and a bull market in the cash index, there is no telling when, and from where, the bear market will impact all indices. Until then the futures indices and cash indices remain out of sync. Only when the bear market reasserts itself will all these indices realign again. The OEW model is still working, even though the Central Banks are manipulating the markets on an unprecedented scale.

MEDIUM TERM: uptrend

For the past couple of weeks we had been noting that the downtrend, SPX 2111 – 2026, had been weakening and a new uptrend may be underway. This new uptrend was confirmed this week. As a result of this uptrend we have updated the count to suggest Major wave B did not end in April at SPX 2111, but is still underway and subdividing. We now have Intermediate wave A at SPX 2111, Int. wave B at SPX 2026, and an Int. wave C uptrend underway.


With Int. wave A just over 300 points, and Int. wave B only 85 points, Int. wave C can travel a long way before it concludes. This would suggest new all time highs in the SPX even though it would be within the context of a bear market pattern. For the NYSE, however, this type of advance should be enough to eventually end its bull market pattern. At that time, as noted previously, all the indices, cash/futures, would be in alignment for the bear market to get underway. In the meantime it appears we have a rising Major wave B in the SPX still underway, and a rising Primary V in the NYSE. Medium term support is at the 2085 and 2070 pivots, with resistance at the 2131 pivot.


With a simple and short double three concluding the downtrend at SPX 2026, the market reversed and turned higher. During the downtrend the 2043 and 2019 pivots supported the A and C waves, with B wave ending at the 2085 pivot. Quite an organized decline, despite the fact that it took a month to unfold.


After that SPX 2026 low the market rallied essentially straight up, with small pullbacks, to SPX 2103 on Tuesday. After that, however, the market became quite choppy within a 20 point range: 2085-2101-2089-2105-2085. It currently looks like an irregular flat consolidation. Since Int. wave A looked like a quite extended double three: three Minor waves with three intervening Minute waves, we are going to label Int. wave C with the same pattern. Currently it looks like the SPX 2103/2105 area ended Minute wave a of Minor wave a. Short term support is at the 2085 and 2070 pivots, with resistance at SPX 2111 and the 2131 pivot. Short term momentum ended the week around neutral.


Asian markets were mostly higher on the week for a net gain of 0.7%.

European markets were nearly all lower for a net loss of 1.8%.

The Commodity equity group was mixed and lost 0.2%.

The DJ World index gained 0.6%.


Bonds rallied big on Friday, are uptrending, and gained 1.3% on the week.

Crude continues to uptrend but lost 1.9%.

Gold rallied Friday also, gained 2.3% on the week, uptrend may be underway.

The USD lost 1.6% on the week but is still in an uptrend.


Monday: FED chair Yellen gives a speech at 12:30. Tuesday: consumer credit. Thursday: weekly jobless claims and wholesale inventories. Friday: consumer credit and the budget deficit.

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

About tony caldaro

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

640 Responses to weekend update

  1. scottycj1 says:

    Too much resistance at 2116….down for awhile

  2. Dex T says:

    I think the market is going to spend the next couple of months just trading back and forth within range- Whatever event comes that will cause it to finally drop still remains to be seen.

    I doubt Yellen will raise rates in June but the Fed is going to raise 1 more time.

  3. Cash 2108 now becomes the critical overlap to determine if wave (v), upward, is over. We have not overlapped it downward, yet. It would be wave -i of v of (v).

  4. johnnymagicmoney says:

    VIX up pretty much all day


  5. johnnymagicmoney says:

    626 comments today on 6/6/2016 when the S&P is up .6% closing in on 2016

  6. Scott C says:

    so what the heck are we following now… the spx or the nya? are you going to use the nya to report for us — because it looks like we dont return below 2070?

    we are in a global melt up like everyone else thinks?

  7. Our May 8th forecast edition had this chart. Not rocket science to count waves and fibs

    • micky says:

      No not at all, like when I told you that you cant count. It was when you counted impulsively down , before you changed your mind.

  8. mrtraderguy says:

    On this significant day, may we have a moment of silence for the bears on this board. They have had nothing but pain and losses for the past three or four months. May they have better days ahead. If anyone can offer them advice at this time, please do so (we have all been there at one time or another but these guys have lost a ton of money, clients and respect). If you guys can hang on, eventually it is likely you will be right.

  9. Ajay Singhi says:

    Short at 2117(spx)…

  10. stmro says:

    We broke 2111 – if there were any humans in the market that should have been good for a stop run to the upside for a few handles but clearly, there aren’t.

  11. micky says:

    I have SPY st target in the 213 area

  12. vivelaamo says:

    How come S&P prints a new trend high while DOW nowhere near?

  13. phil1247 says:

    2113 is next target es

    going to sell out there …

    its getting late and the boyz may want to pull the rug overnite

  14. NEWBIE says:

    Everyone is getting bullish, perfect recipe for the end of a b wave or wave 2 up.

  15. vivelaamo says:

    Brexit odds have been slashed big time!

  16. Bobo Wilson says:

    NYSE breadth broke above the late April highs about two weeks ago. Not sure why so many people in the blogosphere have been trying to top-pick ever since. Makes no sense to me.

  17. scottycj1 says:

    The United States government has just issued a new Mandate. In order to generate continued prosperity for the country it is ordered the stock market shall rise at the stated rate of 8% per month —each month of the year. With this new Mandate all citizens can enjoy a higher standard of income and the resultant related higher standard of living. Downward movements in markets will become non-existent. Monthly profits when harvested from accounts will be entirely tax free. This will lead to calm, peaceful citizens and a new American Way.

  18. cj32 says:

    • fishonhook says:

      Wasn’t coolbiz bearish last week. Hard to keep up

      • cj32 says:

        he had this last Friday

  19. captbara says:

    captbara on May 26, 2016 at 10:43 am

    The relentless grind up of int iii – maj 1 of P5 begins. Expect to see extended riding of the upper BB.

  20. Jack Sparrow says:

    time to go short between now and the close of the day….seems like the wave structure is almost complete (perhaps one more push -unless it extends)

  21. Pretty darn clear we broke out already. Why people are still looking for a top indicates a rigid inflexible mind. The market behavior at these levels is simply amazing. Any drops should be used as buying opportunity. Most technicians with any weight has acknowledged this. If you can’t change emotional stubbornness get out. Not about ego or pride. Be good at this craft rewards you regardless of moral position. Separate the two. A stall here without much breakdown suggests only one thing, a powerful move to come. Not getting below 2060 and its up and away. Staying above 1990’s and its still an upward bias.

    We should enter soon another big rally that defies most assumptions.

    • Chris C says:

      I agree but the last downward sloping trend line on the daily is 2121 at the moment. If that breaks then off to the races. I would wait for that to be a buyer. Crazy market we live in. 0 f***s given. Market could care less about macroeconomics as long as the world currencies are stable everyone is happy lol

      • They care simply because earnings are NOW critical. People have made excuses how companies managed to reward shareholders all these years. Now that the reverse has happened due to higher domestic costs and overseas contraction you can be sure spending has got to accelerate. Risk reward. Money will not flow into equities if they see more slippage in earnings going forward. Watch for signs of spending acceleration. It should be a continual upside surprise in the data.

        I do not subscribe to the notion that the world market is blind to such risk. Nor do I believe any nation can fix the financial markets to placate investors. Wild swings were not by design. The doomsayers didn’t believe energy could recover nor did they look at past pricings to understand how things work. valuations will be justified going forward. in fact we should see an acceleration of earnings and GDP before the year is out.

        All the world economies should be in sync soon. I do not however believe eventually we don’t have another major crisis relating to credit. Just not on my 6 month horizon.

        • Chris C says:

          The Put/Call ratio if we close near the highs today will be as bullish as it was bearish at 2025. It is the only indicator that seems to have been working for me lately. I would wait for a pullback before buying.

    • cmucha68 says:

      Well said. It’s never to low to sell and never to high to buy. “Jesse Livermore”

  22. phil1247 says:


    nothing has changed

    target 2218

  23. SP500 5-min .. there’s the higher high of the day .. wave (v) validated.

    • captbara says:

      Looks like subdividing waves up. I wouldn’t be surprised if 2 was already in at 2085, like your AI generated chart showed.

      • The odds of (2) or (B) at the 2025 low, are now greatly increased by the new high above 2111.05, and therefore the expectation would be for only “three waves down”, not five waves down when this upward movement breaks.

        • captbara says:

          Right. I have been trading under the assumption that (2) was in from 2025. Well, not exactly trading but just continuing to sit on longs from way lower.

  24. ajaysinghi says:

    No new high on spx. Not even 2120.

  25. Amazingly,on the DXY hourly chart (10 day),a huge positive div.Wont add GDX today.

  26. stmro says:

    Still the same picture. No one really wants to buy, including the institutions, but no one has the courage to short either. V-shaped recoveries every single time.

    • mjtplayer says:

      When you have low volumes and low participation by retail investors, the bots can push the markets to extremes in both directions. This is why we’ve been getting straight direction loves, up and down.

      • stmro says:

        I don’t think retail ever came back after the crash. It’s the institutions and funds that aren’t participating.

  27. rd3777 says:

    Looks pretty good for a double top…..actually lost count of the tops in the 2100+ area Bull markets die hard…!

  28. SPX is extremely vulnerable to crash. This can happen anytime now. However, I still consider 2122.1 as final shot. Small short could be opened but large short to be opened at 2121.4. Stop at 2146. SPX will go down 110 points in a flash.

    • NEWBIE says:


      Tell me more about your thoughts on a crash. I’m loaded to the gills with volatility and would very much enjoy it.

  29. simpleiam says:

    Listened to Auntie’s speech. Sounds like she really wants to raise rates, and will do so, July, at the latest. This month would not surprise me though.

    • phil1247 says:

      she is irrelelvant
      she will follow when the market raises rates
      as the fed has done every other time

    • EL MATADOR says:

      they want inflation beyond desperation. How do you sell an inflationary cycle to the public?

      • phil1247 says:

        dont worry EL MAT

        the inflation the fed wants
        it will eventually get

        bonds will be crushed

        be careful what you wish for

        ECRI future inflation gauge is at a 96 MONTH high…..(not a typo)

        • ewmarkets says:

          As far as I know looking at my grocery bills and other bills and house prices, money has lost 1/4 of its value in the last few years. So I don’t buy the “no inflation” thesis.

  30. rigged09 says:

    CNBC Headline – “Fed’s Yellen: Don’t overreact to jobs report”
    Bloomberg Headline – “Yellen: May U.S. Jobs Report ‘Disappointing’ and ‘Concerning’”

    Go Figure lol

  31. aahmichael says:

    oops: posted this on the wrong update page:

    aahmichael says:
    June 6, 2016 at 11:50 am
    Just doubled my short position at 2105. I’m now maxed out short at 2096 average.

    • Foolish. Entering the strongest rally leg yet. if we don’t crack 2075 or lower this week we will ZOOM up. Shorts are getting crushed soon which will amplify the move. To deny the domestic economy is doing well is to pretend homes, jobs, income, savings, and consumer comfort are all in reverse. Wait till earnings. That will decide it. The signal is clear as day. we have already broken the bear cycle assumption. Very strong buildup. Any drops should be used to add long positions. Can’t be static in bets. Go with the flow.

      • EL MATADOR says:

        Then why did market plunge in 1937 and in 1957? The macro-econ view at the start of those two years was just same as your just describe above so please enlighten us why the markets plunge

      • Gary, Just because I have opened small short, I am not siding with Aah. But, we will have resolution very soon. Stock prices are not dictated by homes, but by FB, GOOGL, AMZN, NFLX. Now there is “some” element of vulnerability in all 4 stocks, which? Yellen will be helpless…and that is leading to total chaos…take it from me…

      • aahmichael says:

        Gary, I’m a system trader. I take every trade that my proprietary system generates. I would only be foolish if I didn’t take every trade. Also, while I share the entries and exits of my trades/positions here, I don’t debate them. That also would be foolish. I will tell you, however, that this is the 7th time that this particular sell signal has been generated by my system since 5/29/15. The previous 6 times resulted in a net profit of 425 S&P points per contract. 5 of the trades were winners, and the other one was a 15 point loser. The 2 largest winners (160 and 125 points respectively,) also had the largest open drawdowns (23 and 19 points respectively.)

        I’ll also say that it’s absurd for anyone on this blog, or anywhere else for that matter, to think that they can give trading/investing advice to another person. There is no single way to profit from the market. Each individual will surely have his own trading/investing goals, his own risk tolerance, and his own time frame for which he trades on. In fact, what may be the perfect price point for one person to go short, is also the perfect price point for another person to go long. Best of luck to you.

  32. Four-hour Crude Oil .. likely in a very beautiful fourth wave triangle. Wish I could show you the chart, but I can’t because I’m a man of my word.

    • phil1247 says:

      a running triangle pray tell????????????

    • H D says:

      “Just be aware that when someone chooses to ignore the rules and guidelines, then it ceases to be Elliott Wave in any form.” Careful folks, this is how cults get started. All in good humor but trader joe you are coming off a little arrogant. If all those methods and books only get you “50:50” and then put you long right before they pull the rug “sub-wave iv of (v) now completed” maybe you need to scale back your insults toward research based best practices of Elliot Wave that some of us practice. Nobody owes you an apology for having a different EW/ market view.

      And have a nice day.

      • I’d like to, but I don’t know what they are. No one has showed them to me yet. And on one owes me an apology for a different market view. They owe me an apology for being belligerent .. just like you are being. For example .. what makes you think anyone “put me long”? That is a complete and total assumption on your part. Did I miss wave iv of (v) by 4 S&P points? Yes, absolutely. We are now in v of (v), up, and it ‘can’ fail if it wants. I don’t ‘make’ the market .. I just try to count it .. in near real time .. something I have not seen you do unless I missed it. Until this attitude stops .. no charts.

        • H D says:

          belligerent? Ha… dude, we go way back. I’m telling you as just another market commenter, you come across as arrogant and that’s why you’re getting the replies you are getting. None of us “make the market.” You are the only one completely dismissive of everyone else’s work though.

          BTW, I just suspect that if you take the time to post a view, chart, and 4 paragraphs of page numbers and explanations that you are also taking the trade. If not then why be so grouchy? Be well. I have no beef w you. A discussion of the EW is always welcome.

          • I have no beef with you either. But your reply shows how much of my stuff you have not read. Why would an Elliottician “go long” in (v) of 5? That is profit-taking time. Not “going long” time. Why would an person who has posted a paraphrase of Ira Epstein’s Rules for Trading on his blog be going new long so close to the upper daily Bollinger Band? That’s where the “Smart Money” usually exits? I’m not grouchy. It is you who cast the first aspersions in this thread. Look at your own behavior and criticize ‘it’. I’ll try to handle mine.

    • What word is that? My internet has been out for a few days. What happened? Well anyway you have great charts so I hope some silliness here didn’t dissuade you.

  33. vivelaamo says:

    Look at May 19th and June 23nd 2015 SPX and DJI. Then compare it to the the last two months…..

  34. phil1247 says:

    johnnymagicmoney says:
    June 6, 2016 at 11:33 am
    doesn’t matter what she says


    the market …….not the fed

    will raise rates when it is time

  35. phil1247 says:

    Trader Joe

    we both posted on the wrong update (friday)

    are you following me ??? 🙂

  36. johnnymagicmoney says:

    its amazing how timid she is and how the market controls every little innuendo and phrase and tone – she is a sad sad sad reflection of independence

    • CNBC headline says “Yellen omits time frame for rate increase”.”Jobs report disappointing”.”Jobs slowdown bears watching”.
      Gold dipped from $6 up to $1 up,then back to $3.40 up.After she’s done,lets see what the dollar and gold do.

      • johnnymagicmoney says:

        funny thing is she has said numerous things which keep saying wage pressure wage pressure wage pressure – whether or not the market wants to trade on that remains to be seen. You can sell the market off on wage pressure, slowing of economy or both – or the market can bid itself up on doveishness or economy is better – everything is there to go either way

  37. johnnymagicmoney says:

    doesn’t matter what she says – market will spin her blah blah blah in a positive way

  38. Mr C…if there’s a Brexit-the euro drops bigtime.Is that a correct assumption?

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