weekend update


The week started at SPX 2139. The market rallied, after a gap up opening, to SPX 2154 on Monday. Then after the opening gap was closed on Monday the market finished unchanged. This sequence continued on Tuesday: gap up opening- close gap. On Wednesday another gap up opening-close gap sequence occurred, but during the FOMC statement/press conference the market rallied. The rallied continued to SPX 2180 on Thursday after another gap up opening, then pulled back to 2164 on Friday. For the week the SPX/DOW gained 1.4%, and the NDX/NAZ gained 1.4%. Economic reports for the week were sparse and mostly negative. On the downtick: housing starts, building permits, existing home sales, leading indicators and the Q3 GDP estimate. On the uptick: the NAHB, FHFA and weekly jobless claims improved. Next week’s reports will be highlighted by Q2 GDP, the PCE and the Chicago PMI. Best to your week!

LONG TERM: uptrend

Have recently come to realize there are quite a few EW counts floating around the blogosphere to define the advance from the SPX 1810 February low. We have been tracking four over the past few months, and have recently whittled it down to one with two alternates. The main count is a new bull market Primary III underway. The two alternates are basically two different views of the same irregular Primary B count. The count we eliminated is probably the most popular EW count: a Primary V underway. This count also has a few variables in the EW blogosphere. It is an interesting point in time for the stock market heading into a presidential election. New presidents seem to come along every eight years these days, instead of the customary four years. Bull markets also appear to last longer these days, than they were in the past. Connection?

Our quantitative OEW analysis suggests the bull market from 2009 ended in 2015, and it was the third longest bull market in the past 100 years. Only the 1921-1929 and 1987-2000 bull markets were longer. The bear market that followed, May 2015 – February 2016, was a bit short in time and percentage of decline. There are, however, several other quantified bear markets that were similar. One that immediately comes to mind took only six months while the market lost 17% of its value in 1984.


This week we updated the SPX weekly chart to display the preferred count, and moved the alternate count(s) to the NYSE daily charts. Since the NYSE has a similar 2016 pattern as the SPX, displaying the counts there appeared to be a good fit. Counting the February low as the end of the Primary wave II bear market, we have a Primary III bull market underway. The Primary I bull market lasted from 2009-2015. Since Primary III should last a number of years, Primary I was 6 years, we started off with labeling the first uptrend (1810-2111) as Intermediate wave i of Major wave 1. Then after an irregular Intermediate wave ii (2026-2121-1992) we have a shorter uptrend to 2194, and have labeled that Minor 1 of Intermediate wave iii. At this point it is much too early to speculate whether or not the next bear market will be at the end of Primary III, or the end of just Major wave 1 of Primary III. However it unfolds, we are currently expecting SPX 3000+ in the next 2 to 4 years.

MEDIUM TERM: uptrend an 80%+ probability

The last uptrend, which is labeled Minor 1, was five waves from SPX 1992-2194 (or 2188). From SPX 2194 a leading diagonal A to 2157, a B to 2188, then an ending diagonal C to 2120 could be counted. From SPX 2188 a simple, and short, A-B-C (2119-2163-2120) can be counted. Either way it appears the downtrend ended at SPX 2119/2120, as the NDX/NAZ have already confirmed new uptrends and have made new all time highs. Also, based upon a recent finding by one of our members Patrick M., there is a 80%+ probability that an uptrend is underway.


At the downtrend low the technicals, daily and weekly RSI/MACD, looked similar to the recent downtrend lows during this bull market. The daily RSI was quite oversold, and the MACD was negative. The weekly RSI was near oversold, just like the Br-exit downtrend low. The advance from the SPX 2119/2120 low has been a bit odd. There was first a rally to SPX 2151, then a pullback to 2131. After that there were three gap up openings that were completely closed before the latest rally from SPX 2140-2180. Will cover what this could mean in wave terms below. Medium term support is at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots.


After the apparent downtrend low at SPX 2120 the market had several overlapping rallies. The last three of the four rallies were created by gap up openings, that were completely sold off. Clearly there was a lot of positioning ahead of the FED’s FOMC statement on Wednesday.


Thus far we have the following sequence from SPX 2120: 2151-2131-2154-2136-2151-2139-2152-2140, then 2180-2164. What this suggests is that there are a series of nested 1-2’s ending at SPX 2140. Then either the third wave, or part of, ending at SPX 2180. We will track this sequence to see how it unfolds in the coming weeks. For now, the current pullback could dip to around SPX 2160 before resuming the rally. Pullbacks of 15-20 points were fairly common during the last uptrend. Short term support is the at 2131 and 2116 pivots, with resistance at the 2177 pivot and SPX 2194. Short term momentum ended the week oversold. Best to your trading!


Asian markets were all higher on the week gaining 1.6%.

European markets were also all higher gaining 2.7%.

The Commodity equity group were also higher gaining 3.1%.

The DJ World index gained 2.2%.


Bonds continue to downtrend but ended the week flat.

Crude is trying to uptrend and gained 2.0%.

Gold is also trying to uptrend and gained 2.4%.

The USD is still in a downtrend and lost 0.7%.


Monday: new home sales at 10am. Tuesday: Case-Shiller and consumer confidence. Wednesday: durable goods orders. Thursday: weekly jobless claims, Q2 GDP (est. +1.3%), and pending home sales. Friday: personal income/spending, the PCE, Chicago PMI and consumer sentiment. It is also FED speak week. Monday: governor Tarullo at 11:45. Tuesday: vice chair Fischer. Wednesday: testimony from chair Yellen. Thursday: governor Powell and chair Yellen both have speeches. Could be another day traders week. Best to your weekend and week!

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

About tony caldaro

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

212 Responses to weekend update

  1. kvilia says:

    Tomorrow SPX is up, and miners are up.

  2. tommyboys says:

    In a rare turn of events volume lower for the third day in a row on the selling😉

  3. phil1247 says:

    prepare for rip your face off squeeze

  4. rd3777 says:

    Looks like in the short term the SPX is headed to the floor @ 2108 ish

  5. mtu MTU says:

    [210pm] SPX update –
    See chart for pre-debate squiggles. See Weekly Commentary for bigger picture discussion.

  6. Also today…another legit Nasdaq H.O.135 highs 90 lows.McClellan +12.Stay tuned.

  7. phil1247 says:


    2136 target on tap

    if it doesnt blast thru ..
    taking profits on shorts

  8. micky says:

    will see if st support at 38/44 area will hold

  9. Is this a Merkle bluff?No bailout of DB?Or is she p.o.ed at everyone turning against her immigration insanity…and figures,”If I’m on the way on the way out,I’ll give them an auf wiedersehen to remember.”
    I don’t believe a word of it.If she doesn’t bail them out,the EU will.If the EU doesn’t,supposedly Warren Buffet will cheerlead it from the abyss with a token purchase of shares.
    Markets worried about Trump.

  10. blackjak100 says:

    2148 seems to be a very key level.

    • stmro says:

      Weak, but not extreme internals today (tick and nyad). Think its going to break today and its going to be followed by more weakness rest of the week.

  11. wanderer says:

    Had a dream last night: SPX down 28.75 on Monday.

  12. phil1247 says:


    see ya tomorrow

    are you going to watch the celebrity death match tonite???

  13. rd3777 says:

    The pattern looks to be finished…also the DAX and JPN225have retraced back down to there recent floors before the BOJ meeting and it looks impulsive. If it is not a X wave then I think we have made a major top.
    The market see’s something in the future and it doesn’t like it. Normalizing of interest rates? Trump? DB? crude glut widening? take your pick.
    The CB’s bullets are blanks….like a Princeton professor recently said the next QE has to be at least 4 trillion…but the IMF XDR will suffice and a shock to the U.S. banking system is coming.

  14. H D says:

    Don’t go chasing waterfalls. SPX is HWB 2149. Still looks like distribution, anything above 2177P got sold. -34. Bulls were sitting on 4 nested 1-2’s and bears a choppy B wave. Keeping everyone in the game.

  15. phil1247 says:


    still in extension shorts

    bear below……. 2150

  16. captbara says:

    Purple, they were always in cahoots.

    Nothing much will change regardless of who wins, that I can be sure of. But still, it’s interesting to see how fervent people are in this election.

    • purplember says:

      dead voters will hit all time high. Media is all in for her, even at expense of their credibility.

      • tommyboys says:

        Yep lots of the most powerful fearing losing control if Trump gets the nod. All media working overtime to discredit him as much as possible. The three or four people worldwide that control the narratives will take Hillary or ANYONE – while overlooking ANY criminal activity – over ANY “outsider” – Trump in this case.

  17. CampFreddie says:

    Bears look away now.

  18. fotis2 says:

    CL close above Friday’s high=3BR on daily good chance of 4th TL test lets see.

  19. Page says:

    End of Month trade, Bulls will be doing ‘Window dressing’ and Shorts will be doing ‘Door dressing’ which means Markets going higher, SPX will cross above 2200.😀

Comments are closed.