weekend update


The week started off at SPX 2175, then spent the entire week trading within the two week, 20 point/1% trading range, until it nudged above it by one point on Friday. In the end the SPX made an all time high at 2177. For the week the SPX/DOW lost 0.45%, and the NDX/NAZ gained 1.30%. Economic reports for the week were negatively biased. On the downtick: Case-Shiller, consumer confidence/sentiment, durable goods, the Chicago PMI, plus weekly jobless claims rose. On the uptick: Q2 GDP, new/pending homes sales. Next week will be highlighted by monthly payrolls and ISM.

LONG TERM: uptrend

For the past few months we have been following two specific counts. The NYSE Primary V count, and the SPX Primary B count. For now both counts suggest higher prices ahead, at least in the medium term. A third count, introduced last week and posted on the DOW charts, suggest much higher prices ahead. But we will leave that for another time.


The Primary V count in the NYSE has been underway since the Primary IV February low. Thus far we have observed a Major wave 1 uptrend, then an irregular Major wave 2, and currently a Major wave 3 uptrend underway since the June low at 9919. Primary V should consist of five Major waves, plus the NYSE should at least make a new all time high. Currently it is still about 4% below the 11,285 all time high made in 2015.


The Primary B count in the SPX has been underway since the Primary wave A February low. Thus far we have observed a Major wave A uptrend, then an irregular Major wave B decline, and currently Major wave C underway from the June SPX 1992 low. Primary B should consist of three Major waves, and oddly enough the SPX has already made all time new highs.

There is also the possibility of counting the three wave advance to SPX 2121 as Major A, the decline to SPX 1992 as Major B, and now another three wave advance for Major C. These last three waves could coincide with Majors 3, 4 and 5 in the NYSE. Should this occur these two indices would be back in sync, and the bifurcation will have ended as both decline in bear markets. However, should SPX 2335 be exceeded before all of this unfolds, then the Primary B count will be abandoned in favor of the alternate DOW count. Lots of possibilities in the months to come, while the indices work their way higher.

MEDIUM TERM: uptrend

After the February SPX 1810 low the SPX had a 301 point uptrend (1810-2111), an 85 point downtrend (2111-2026), a 95 point uptrend (2026-2121), then a 129 point downtrend (2121-1992). During this uptrend we have been focusing on the first uptrend (1810-2111) for comparative purposes.

That first uptrend advanced in five waves [1810]: 1947-1891-2075-2034-2111. The first wave was 130+ points, the third wave 180+ points, the fifth wave was 70+ points, and the two declines, waves two and four, were between 40+ and 50+ points.


The current uptrend started off strongly enough but has been weakening as of late [1992]: 2109-2074-2177 so far. The first wave was 110+ points, the second wave 30+ points, and the third wave 100+ points so far. This uptrend has been less volatile than the first, smaller pullbacks, and the third wave has yet to exceed the first. Thus far clearly a bit weaker. Nevertheless, we are maintaining our upside target for this uptrend between SPX 2250 and 2280. Medium term support is at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots.


This uptrend, as noted above, has thus far advance in three waves. The first two waves were quite swift with few subdivisions. This third wave has been subdividing into five clear Minor waves: 2109-2089-2176-2159-2177 so far. Minor wave 4 was quite a trading range ordeal, as it remained in a 1% range for about two weeks. With Friday’s tick up to SPX 2177, we were able to accept the Minor 4 low at SPX 2159 this week.


With the fifth wave underway for Intermediate wave three we can make some Fibonacci projections. These projections at +/- 2 points: 2180, 2193, 2214 and 2248. Since our target all along has been the OEW 2212 pivot, that appears to be the most probable area. When Int. three does conclude the market should have its biggest pullback since Int. wave two (35 points) for Int. four. Then higher highs should follow for Int. five. Short term support is at the 2131 and 2085 pivots, with resistance at the 2177 and 2212 pivots. Short term momentum ended the week slightly below overbought. Best to your trading!


Asian markets were mixed on the week for a net gain of 0.1%.

European markets were also mixed but gained 0.4%.

The Commodity equity group was also mixed and lost 0.7%.

The DJ World index gained 0.9%.


Bonds appear to be in a downtrend but gained 0.5%.

Crude is in a downtrend and lost 5.9%.

Gold is still in an uptrend and gained 2.6%.

The USD appears to be in a downtrend and lost 2.1%.


Monday: ISM and construction spending at 10am. Tuesday: personal income/spending, the PCE, and auto sales. Wednesday: the ADP and ISM services. Thursday: weekly jobless claims and factory orders. Friday: monthly Payrolls (est. 180K), trade deficit and consumer spending. Best to your weekend and week!

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

About tony caldaro

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132 Responses to weekend update

  1. How fundamental analysis can influence immediate trend decisions. Since it’s pretty clear now that the earnings news will not disappoint nor will the future expectations I turn to the biggest drag so far, Manufacturing. Low and behold we had 2 big reports out today and they confirm a BIG surge in future orders. Whether its a blip or sustainable remains to be seen. It certainly can only bolster the cause for future earnings growth. This report could be the catalyst needed for business spending to pick up. that’s has been a big drag for over a year now. if they start improving along with continues consumer spending I can easily see GDP hit over 4 percent by year end. No stretch to assume that.

    I am sure there will be many that glance at the 2 reports and find reasons to be pessimistic but in truth it has strong forward implications. I mentioned for I saw a spurt in spending by consumers months before the data was in. I am seeing the same set up fro business spending.

    Take it for what it is worth. For me it only reinforces the bull case and long trend. Not a determinate on immediate action but rather longer term.

    PMI Manufacturing and ISM Manufacturing reports – a must read. Throw in the Gallup Consumer Spending Measure to support continued spending on their part.

    On a daily move? What is holding this very long very tight sideways move? Can’t remember when it stayed this tight for this long? Anyone have stats on possible trend based on past experiences? Are we going to correct here or break out to higher ceiling? Is OIL going to cause the next drop? I have lots of questions with littler answers.

    • Gary, with all due respect, I cant see anyway we get to a 4% GDP. Bulls have been saying that for years. With the election around the corner, China PMI at 49.9 Brexit, Europe banks I could go on, but I wont. I cant see corporations spending at that rate any time soon. I believe the US market is the safest place to be and money looking for yield. With a current shiller PE of 25.2 this could end any time. This market has been build on buy the dips and short squeezes when it ends so does the bull market. The US is in the best shape of 99 percent of the markets, but China, Europe etc will brink us down. Like we took them down in 2002 and 2008. Question is when. Not looking for an argument just don’t see the glass half full as you do. Appreciate your comments. I see tonys B wave as still most probable, ending this at around 2250. best of luck.

      • In 2012 and 2014 we had 4 percent. There is a strong correlation to the slump these last 2 years relating to China and EU. The result was business spending contraction. Not only does the latest spending by consumer seem to be revamping up, but a strong anecdotal evidence that manufacturing pickup like this will result in 2012 and 2014 levels. If you think we can’t get back to those levels than by all means stay on the sideline or wait for the crash. I not only think we will achieve 4 percent but have my eye on 5 percent as more likely. I base my supposition on fundamental data and trends. I made the same supposition on consumer spending 3 months ago. Too much bias and not enough pure analytical decision making. I never interpret the debt saturation level as ominous. I never anticipate based on generalities. There is always specific events that precipitate a marked change in trend. I see the US economy as just starting to take off. No one seems to extract the energy crash, China crash, and EU contraction in the equation going forward. All negative events in the past seem to be accepted as the norm in the future. All positive seems transitory. We generally maintain a negative pessimistic attitude. I suppose that’s ingrained as humans from our genetic past.

        All I know is that 7 years already went by and we are now just breaking out to new all time highs. I call that an extraordinary long term bull move. The FED has allowed this to happen whether you agree with their methods or not, whether you think it’s sustainable or not. Me, I look at actual data points to tell me if it is sustainable. So far we are showing expansion, not contraction in all the important segments of economy.

        • I appreciate your opinion and best of luck

        • johnnymagicmoney says:

          First I thought you were Holly. Then I thought you were Janet. Now I think you are Jamie

        • CB says:

          Gary, re: expansion….that’s prolly why Dallas Fed’s Kaplan said last night that a September rate hike “very much on the table” . Dudley said something similar too, ..Everything is awesome =)

          • Your interpretation of my attitude is absolutely wrong. I look exclusively on the stock market and what will keep it going. Economically the consumer was thrown under the bus the first 5 years of this bull market. The opposite is occurring now and the result should offset business drag from EU, China, strong dollar. if spending stalls so does the market. I only interpret the most likely scenario. Emotional bias causes anger and a feeling of much needed retribution. the market is a machine and doesn’t care how people feel and it certainly doesn’t keep score on what is just or not. Only interpreting what I believe the market uses to drive forward. I have not been wrong all thru the cycle. I anticipated a stretched cycle from the beginning based on the extremely stretched bottom. I place no moral barometer on the market behavior. Once you do you lose objectivity on placing bets.

            • CB says:

              wasn’t doing that. Just mentioning what the fed said which is of interest to traders. Understand/agree with the facts you’re mentioning..Agree w/you no need to get emotional , Gary =)

              • But betting is emotional. Like playing black jack or craps. You base your bets on calculated odds but the thrill is there after you have the money on the table. Way too long holding back on my bets and it was a timely decision in hindsight. Need to get in the game but haven’t figured out the immediate pattern. “Everything is not awesome” . Dudley and Kaplan speech was very muted with an expectation of 2 percent GDP going forward and stronger consumer spending. That is NOT awesome. It’s YOU that got emotional on their speeches which was boringly similar to prior speeches. We are still below normal baseline interest rates and an additional 100 basis point move would barely get us to normalization. Can you clear up my misconception on their neutral stance on the economic conditions? Their speeches are so darn long and I believe I got the gist of what they implied. Awesome 2 percent GDP?

            • CB says:

              Gary, nice talking to you and thanks for all your well thought-out insights about markets & the economy. I agree with you, btw, those speeches tend to be somewhat boring =). Also, if you want to fight with me about economics, get in touch with me on Twitter as this is an EW blog, OK? =)
              Briefly, then, here are my thoughts, after reading those Fed headlines yesterday (didn’t read the speeches, of course..). What is “awesome” about the fact that they (both Fed members) mentioned rate hikes again is that, short-term, which is what we’re mostly interested in, it affects money flows in/out of stocks & other asset classes. Ideally, the basic mechanism, as I’m sure you well know, is as follows.
              Mentioning rate hikes is ” awesome,” because it tends to cause the following:
              >> increased gov. bond selling
              >> improved yield differential, which is favorable for financial companies
              >> money flows out of bonds (and gold) and into stocks.
              RE: 2 % growth. Everything is relative as you well know. Example: China, is growing at approx 7% a year. We’re not China (for us , a mature economy, not an emerging market, 2 % is OK, or ,as Cramer would say it “good enough.”
              So, yes, “everything is awesome” (it’s a song, Gary ). So, cheer up!🙂
              RE: “emotional gambling.” It’s a well-known fact that once we’re in a position, we are no longer objective about it. And yes, as you say “betting is emotional.” So, knowing that, before we open a position, it’s our job to know exactly what we’re going to do when X, Y, Z happens. And, following our plan is the only way to eliminate emotional decision-making later on.
              Gotta run. Nice talking to you, Gary.

  2. Page says:

    Oil going higher from this point …

  3. phil1247 says:


    its funny that everybody was talking about the rising wedge on cl weeks ago

    but now that the wedge has broken
    and the expected collapse from wedge breakdown is in progress
    i dont hear anything about it ……….

    • fionamargaret says:

      …liquidity problems + in the Saudi markets last night……. .derivative problems in the UK…..opened up late…do well guys x

    • fotis2 says:

      Phil I think the ones that traded that setup are keeping quiet now.

  4. vivelaamo says:

    3rd time in the last 3 days the S&P has bounced off the 18 Day MA. How long can it hold?

  5. mjtplayer says:

    captain obvious says – energy stocks are totally breaking down today. CVX & RDS.A are in big trouble, breaking down and out of their uptrend channels. XOM is holding on by the slimmest of margins, but must hold the $86 area, otherwise down she goes.

  6. Vemala Siva says:

    now s&p below 21666 could go to 2159 today

  7. phil1247 says:


    trade above 41.05 could start a short squeeze

    possible double bottom

    sold 1/2 of SCO position
    initiated pre july 4th
    near /cl 40.75

  8. gtoptions says:

    Thanks Tony
    SPY ~ Tested WPP @ 216.76 ~ Next WR2 @ /217.95
    Key Resistance YR2 @ 219.42 & MR2 @ 220.38
    GL All


  9. This is a brilliant assessment, filled with numerous intelligent, factual arguments, about why the stock market is unsustainable at these levels:


  10. nsteve24 says:

    good a day as any to ring the bell
    (note to complacent bulls, especially retail: that bell ring will not be shared)

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