weekend update


The market started the week at SPX 2096. After hitting SPX 2098 in the first hour of trading on Monday the market dropped to 2064 by Tuesday. A rally followed into Wednesday on the FOMC meeting, and the market hit SPX 2086 minutes after the FOMC statement. Then the market pulled back again, gapped down to open Thursday, and hit SPX 2050 before rallying to 2080 into the close. Friday saw a lower open as the market dropped to SPX 2063, then bounced to close the week at 2071. For the week the SPX/DOW were -1.05%, and the NDX/NAZ were -1.90%. Economic reports for the week were again mostly positive. On the downtick: industrial production, capacity utilization, housing starts and weekly jobless claims rose. On the uptick: the NY/Philly FED, the NAHB, building permits, the Q2 GDP est., export/import prices, retail sales, business inventories, and the CPI/PPI. Next week’s reports will be highlighted by FED chair Yellen’s semiannual economic report to Congress, Durable goods orders and more Housing reports.

LONG TERM: neutral

For the past few weeks we have been commenting about an OEW bifurcation between the futures driven SPX and the cash driven NYSE indices. The long term pattern for the SPX suggests the bull market lasted between 2009-2015, ended, and the SPX, plus the three other major indices, are currently in bear market rallies.


The long term pattern in the NYSE suggests the bull market is still ongoing with only Primary III ending in 2015, Primary IV in 2016, and Primary V underway now.


If one of these two distinct patterns is displaying an aberration we would expect it to be the NYSE. After all we have four separate indices all displaying the same pattern, SPX/DOW/NDX/NAZ, and only the NYSE displaying the P5 pattern. Which offers us a third pattern, that we vaguely alluded to last week.

While we have been debating the merits of both of these patterns the market has entered an inflection point. This should make it easier on our analysis as it appears the market will make the decision for us. For the past 2.5 months the market has been trading within a SPX 2026-2121 range. This range was entered after the market had a strong 200 point rally, within 1.5 months, from the SPX 1810 mid-February low. The inflection point is simple. A market breakdown below the SPX 2026 suggests a resumption of the bear market. A market breakout above the SPX 2121 suggests a more bullish outcome longer term. Until this range is pierced one could say we are neutral-neutral longer term.

MEDIUM TERM: uptrend under pressure

The two month uptrend, from mid-February to mid-April, was quite explosive: SPX 1810-2111. Depending upon which metric we use it can be counted as corrective (bearish metric), or impulsive (bullish metric). The short one month 4% correction that followed was clearly corrective, and the market entered another uptrend.


Thus far this uptrend has been quite short, SPX 2026-2121, made a marginal higher high, and has already retraced about 80% of its advance during this past week. Certainly it looks nothing like the previous uptrend. Regardless of either metric noted above, the market has set up an inflection point. Should the market breakdown through the range, these three waves can be counted as an a-b-c up to complete Major wave B of the bear market. Should the market breakout of the range, these three waves can be counted as a 1-2-3 with a more bullish outcome. A ninety-five point range that may be easily swayed by the result of Britain’s Brexit vote this coming Thursday. Should they vote ‘leave’ we could witness a 2011 event. Should they vote ‘stay’, with the US economy improving over the past few months, it certainly can kick off a wave 3. Should be an interesting week. Medium term support is at the 2070 and 2043 pivots, with resistance at the 2085 and 2131 pivots.


As noted above, both uptrends can be counted as corrective/impulsive depending upon which metric we use to define the count within the trend. We have been labeling both uptrends as corrective because the overall pattern suggested an ongoing bear market. Medium and long term trends are quantified, so there is only one parameter/metric.


Currently this uptrend has rallied 95 points, SPX 2026-2121, and this week pulled back to SPX 2050, retracing nearly 80% of that advance. This is quite odd for an ongoing uptrend, suggesting possibly a new downtrend is underway. The key levels to watch naturally are SPX 2050 and SPX 2026. The first in the upper range of the 2043 pivot, and the second the upper range of the 2019 pivot. A breakdown of these levels could suggest a retest of the low SPX 1800’s again. Quite a serious decline. Should the market rally above SPX 2086 this steep pullback may be over, and a resumption of the uptrend is then likely. Best to your trading this upcoming week!


Asian markets were mostly lower on the week for a net loss of 2.5%.

European markets were also lower losing 2.4%.

The Commodity equity group were mixed losing 0.8%.

The DJ World index lost 1.7%.


Bonds remain in an uptrend and gained 0.2%.

Crude is also in an uptrend but lost 0.7%.

Gold confirmed its uptrend and gained 1.5%.

The USD remains in an uptrend but lost 0.4%.


Tuesday: FED chair Yellen testifies before Congress, and FED governor Powell gives a speech. Wednesday: the FHFA and existing home sales. Thursday: weekly jobless claims, and new home sales. Friday: durable goods and consumer sentiment. Best to your weekend and week!

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

About tony caldaro

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331 Responses to weekend update

  1. cj32 says:

    SPX and GOLD, cr. to CBZ


  2. blackjak100 says:

    If a 5th wave is going to complete above 2101, it should start right about here & now.


  3. Jack Sparrow says:

    did we just form a LD to the downside after completing C this morning


    • fionamargaret says:

      …expand please…


      • fionamargaret says:

        ..and consider INO……yes?


        • Jack Sparrow says:

          what just happened – a substantial drop..


          • Jack Sparrow says:

            LD is a precursor for a move further. this time it was to the downside..


          • fionamargaret says:

            ..look at INO Sparrow…I bought some…I liked your C idea at the weekend…clever clever…but where to now….x


          • Jack Sparrow says:

            4 of this is already in 1 region if one were to assume this was 3 up…that doesnt bode well for the upward count…this move from 2050 seems like a correction


          • vivelaamo says:

            Smart money? (Whatever that means).


          • Jack Sparrow says:

            ok i thought you were gonna say me smart- when i do get it right its to the tick…i just need to start some light speed paid services..

            Liked by 1 person

          • fionamargaret says:

            You have possibilities with your line drawings..send stuff out during the day…and if you are good, you will get subscribers….


          • Jack Sparrow says:

            i was just kidding – i have just taken a break from private equity domain after been in it for 20 years – so i am trying out this new dark underworld in my mini break in my life as the third phase in my life…buying out companies is up my alley….iron ore sounds good..


  4. Ajay Singhi says:

    SPX tgt of 2100 given last week hit today. Came a day late. I was expecting it on Friday but the previous wave unexpectedly went down quite deep.


  5. magnus1234 says:

    Just finished watching a channel 4 interview with mr Farage. The referendum is not an election it is an IQ test.


  6. learnedmylesson25 says:

    Just a middle of the day observation on gold,that may be a little early.Considering
    that equities everywhere are rallying on anti Brexit attitude,gold sold off as expected.However,it’s come back–silver is up in fact.So this looks bullish.Just read a Benzinga article that proclaims”gold will drop $75 if Brexit fails.”It’s possible if gold rallies into the green today,it doesn’t care about Brexit–and will rise no matter what.
    On the bearish side…July 1st has the possibility of initiating a short term 6 month reverse of this uptrend.I explained this before.Looking back at the last bull market in gold,I counted at least half the time January,July were susceptible to corrections on or close to the first of those months before resuming the uptrend.
    Be prepared.Good luck all.


    • phil1247 says:


      daily extension longs holding

      targets 1328 and 1334

      i expect the monthly short at 1480 to eventually be tested


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