weekend update


The market started this choppy week at SPX 2165. After a gap down opening on Monday (DB related) the market declined to SPX 2142 by Tuesday’s open. After that it rallied to SPX 2173 Thursday morning. Then sold off (DB related) to SPX 2145 by Thursday afternoon. After a late day rally on Thursday the market gapped up on Friday (DB related) and hit SPX 2175. For the week the SPX/DOW gained 0.25%, and the NDX/NAZ gained 0.25%. Economic reports were mixed. On the downtick: Case-Shiller, the Q3 GDP estimate, pending/new home sales, plus weekly jobless claims rose. On the uptick: Q2 GDP, consumer confidence/sentiment, personal income, the Chicago PMI and the PCE. Next week’s reports will be highlighted by monthly Payrolls and ISM.

LONG TERM: uptrend

The month of September started off with a high of SPX 2188, then a decline to 2119/2120 by mid-month. Then while we were expecting a new uptrend to get underway, all the market could offer was lots of choppy activity. As every rally was sold. If the SPX/DOW are indeed in an uptrend, we cannot envision it being anything more than a B wave within a Minor wave 2 correction. It is just too choppy.


The long term count remains unchanged. Primary wave I ended in 2015, and Primary wave II ended in February 2016. A Primary III bull market began at that time. Thus far we have observed an Intermediate wave i uptrend, and an irregular Intermediate wave ii. Then a Minor wave 1 uptrend, followed by a Minor 2 downtrend. When Minor wave 3 gets underway it will be quite obvious. And the recent activity is not it. Nothing to add to the alternate counts, as they have not accomplished much of anything recently either.

MEDIUM TERM: uptrend/downtrend looks correctional

After making an all time high in mid-August the SPX ended its Minor 1 uptrend and headed into a correction. The market declined into early-September and hit SPX 2119. The low at SPX 2119/2120 could have ended the downtrend, and a new uptrend was underway. However, as noted earlier, the advance since then does not look impulsive at all. It is certainly not a Minor 3 wave, and looks more like a Minute B wave of an ongoing Minor 2.


Reviewing the daily chart you will observe Intermediate wave ii unfolded in three trends. A Minor A downtrend, a Minor B uptrend to a slightly higher high, then a Minor C downtrend. This is called an irregular correction. Irregular in that it made a higher high during the correction. It is possible we are witnessing a similar event underway now. Only on a wave degree of one lesser scale. In other words the SPX could make a marginal all time new high, and then head right back down to complete an irregular Minor wave 2 correction.

This possibility would fit with the recent uptrend confirmations in the NDX/NAZ, and the 80% uptrend probability noted last week in the SPX. In either case, uptrend gets confirmed or does not, the most probable scenario suggests a retest of the 2116 pivot or lower in coming weeks. Medium term support is at the 2131 and 2116 pivots, with resistance at the 2177 and 2212 pivots.


After the mid-September low at SPX 2119/2120 we observed several rallies that were immediately sold off, but not fully retraced. Then there was a spike up to SPX 2180 post the FOMC meeting that was also sold off. In a broader sense we can see a double zigzag from SPX 2120: 2154-2136-2180. Then a drop to SPX 2142. This is currently followed by another potential double zigzag: 2173-2145-2175 so far. It would appear the SPX 2142 level is key support for this pattern to continue. And a rally above SPX 2180 should offer the potential to hit the 2194 all time high, or even the 2212 pivot range.


Overall it appears the market may be just marking time until earnings season approaches. Short term support is at SPX 2142 and the 2131 pivot, with resistance at the 2177 pivot and SPX 2194. Short term momentum ended the week just above neutral.


Asian markets were mostly lower on the week losing 0.9%.

European markets were all lower losing 0.9% as well.

The Commodity equity group were mixed losing 0.2%.

The DJ World index lost 0.4% on the week.


Bonds continue to downtrend and lost 0.2% on the week.

Crude is in an uptrend and gained 8.5% on the week.

Gold is in a choppy uptrend and lost 1.8% on the week.

The USD is in a choppy uptrend and finished flat on the week.


Monday: ISM, construction spending and auto sales at 10am. Tuesday: the ECB meets. Wednesday: the ADP, trade deficit, factory orders and ISM services. Thursday: weekly jobless claims. Friday: monthly Payrolls (est. +183K), wholesale inventories and consumer credit. 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.

101 Responses to weekend update

  1. fotis2 says:

    CORN CH validation today.

  2. 156 new highs 105 new lows on nasdaq.My thought on GDX is that 25.14 will trigger a +div and a rally.But two things are not meshing here.The H.O. for Nasdaq says –further selloff…and by inference,SPX AND GDX.
    OR,the +div on GDX takes effect with or without SPX.We’ll find out in the next couple days.I’m sticking with GDX(30%) until 25.14 shows me it’s not holding.Good luck all.

  3. captbara says:

    Looks like tomorrow’s WikiLeaks announcement will trigger a wave 3. Which direction, you decide 🙂

    • vivelaamo says:

      no way this is crazy stuff. Will Assange end up in an ‘accident’ between now and tomorrow? Who needs movies.

      • purplember says:

        Bill’s son Danney Williams……wonder if he’ll end up missing

      • CB says:

        Nah, they’ll keep him alive just for entertainment’s sake – all HRC and the mainstream media have to say is that he’s Putin’s lap dog .
        Anytime you mention Trump, Putin and Assange in one sentence it’s a recipe for disaster (for Trump). Too bad Donald doesn’t seem to get it . It’s a bad idea. So there you have it….

        Lower vol. today again.

  4. fionamargaret says:

    ….check waves on oil….bullish pattern to me….UWTI..

  5. Two trends continue.GDX in lockstep with SPX.Plus,Nasdaq new highs 102 new lows 75 with 400 stocks yet to open and be noted.
    “There’s something happening here.What it is…ain’t exactly clear”.
    If it does happen to the downside,we’ve had a warning imho.Later.

  6. mtu MTU says:

    [910am] ES Update-
    It’s Q4! Scenarios around the larger structure. See chart.

  7. stmro says:

    Ftse is in a world of its own right now. Can anyone explan why as gbp goes down, the ftse goes up?

    • abchart says:

      “gbp goes down, the ftse goes up?”

      It’s logic: 1/ Oil up. 2/ FTSE traded in USD.

    • mcgcapital says:

      Huge overreaction to sterling weakness. It doesn’t make much sense just from an earnings perspective. The ftse seems to trade roughly at a 1:1 ratio with gbpusd, but whilst sterling weakness is positive for earnings it’s nowhere near 1:1 as not all companies on the ftse have dollar earnings. Reminds me a bit of the dax bubble we had in early 2015 where the weak euro was used as the reason for a big rally. Would expect at some point that the currency link will weaken somewhat and decouple.

  8. Tony: Thanks for the thoughtful weekend update by you and your group and thanks for your generosity in sharing it with us.

  9. good evening. i hope someone can answer this question quickly. what is the breakout level.on the cup and handle formation that has been forming since september 7 on the daily s&p? is it 2180 or 2187.87?

  10. blackjak100 says:

    If the S&P is going to break 2200, you would think this trendline needs to hold. I’m short term bearish like TC so it’s possible we get a false breakdown of this trendline this week.

  11. abchart says:


    Thanks Tony!

    Small up tomorrow: CAC up about 30 points, SPX up about 10/15 points. Drop from Tuesday until Friday included target 2120. Then bounce to 2145/50 (2 sessions), before new down leg to 2090+/- (October 20-25)
    Will post some charts tomorrow.

  12. Arthur Knopf says:

    SENTIMENT UPDATE: Sitting on the Sidelines

    • fionamargaret says:

      Well Arthur, after Mr. Cryan sent an internal memo saying DB was a victim of speculators.. and the German government countering with a ” don’t know whether to laugh or cry at the bank, which turned speculation into a business model, was now making like a victim”.. does seem like little sympathy from Berlin….but wait….DB top brass have left for the US for a more friendly response…..and I do see Mr Paulson in the wings…

    • torehund says:

      Think US will want Trump, giving bondholders Max 5 cents on the dollar 🙂
      Voting with where your pocket is the happiest, just ask Ivanka 🙂

  13. torehund says:


    Bond collapse will save DB (banks go BK on neg rates), its all interconnected 🙂

  14. bouraq says:

    Chart of the weekend #ES at http://www.tradingchannels.uk

  15. micky says:

    Thanks Tony.
    Short term musings similar to Abc123 count. The most recent red a and b could also be a 1 and2

  16. fotis2 says:

    Thanks Tony! Monthly 3BR SPX possible 2270

  17. locanbbs says:

    UPDATE: Perfect buy signal on all indicators (see white circle on chart) –
    Ndx (e.g.) futures hourly:

  18. mtu MTU says:

    MTU weekly commentary – Monthly Outlook Update (9/30/16)
    Stocks, Bonds, USD, Gold – key intermediate term scenarios to watch

  19. fionamargaret says:

    Global markets……thanks Colin Twiggs

    Thanks Tony …..and everyone x

  20. Ajney says:

    Thanks Tony. Markets are still dancing but not decisively making up their mind. Based on our model, next two weeks are the weeks of reckoning for equity markets. If they have go down strong, it would start soon. If despite all the stress that our model predicts, DOW breaks 18410 and sustains it, then bulls are really quite strong and have the edge this month. Energy dates on Oct. 3/4 and Oct. 7. Details at https://astroanalytics.wordpress.com

  21. stmro says:

    Interesting view here around the lack of participation from retail investors:


    Makes Yellen’s attempts to float equities seem even more absurd. Who is she desperately trying to help..the 1%?

    • tony caldaro says:

      what investors say, is not always what they do
      no different than politicians

    • mcgcapital says:

      Reading the transcript that Torehund has posted in the article below, it appears that she was asked a direct question on whether equity purchases were on the table rather than her pushing for it. I would have been surprised if she’d ruled it out as its obvious that monetary policy is going to be very unconventional in the next downturn with traditional levers close to exhausted.

      The average retail investor is unlikely to come in and start buying here. If they weren’t buying at any point since 2009 why would they start after the market went up from 666 to 2194? If anything I can see the market crashing and retail coming in to buy far too early

      • stmro says:

        I can definitely see that interpretation, but i wish she would definitively rule it out, if only to reverse course later. This kind of statement just sends completely the wrong message to investors about how they should manage risk: “don’t worry, the FED’s got your back”.

    • fionamargaret says:

      ….we are back to our question of last week Tore….what would need to happen to have stocks achieve 2550 (my number)…and another question…would you rather have money in the bank or Siemans’ shares…hypothetical….

  22. wanderer says:

    Tony, with regards to
    “Primary wave I ended in 2015, and Primary wave II ended in February”,
    I think you meant to say:
    “Primary wave I ended in 2015, and Primary wave II ended in February of 2016”.

    Perhaps “2016” was implied, but it could be misinterpreted.

  23. Thanks Tony for sharing your work and insight. This is a four hour version of what I posted yesterday. It’s no wonder the market has been neurotic as it is in the middle of two competing channels, one going up and one going down. And one favoring one side and the other the other side. But if when you look at VIX (black arrow), RSI and the moving averages, I tend to think you are correct (surprise) in believing the bias is up. But dont be surprised to see a sizable pullback on Monday as the market has often been retracing 50% of today’s/yesterday high with the most recent low. https://www.tradingview.com/x/1nvrWGCZ/

  24. stormchaser80 says:

    Big weekend update on my site, including analysis from Monthly to Hourly and all the internals, bonds and oil. The leg higher I called for Thursday came to fruition exactly as advertised on Friday. Is this pattern now complete? If so, what will next week look like? I do my best to lay out some possibilities.

    More discussion and charts here: http://navigatethemarketstorm.com

    My site is 100% free. If you are visiting for the first time, be advised that I do ask new users register for a free login. This takes 15 seconds. This is to protect myself, ensuring that everyone agrees to my legal documents.

  25. Thank you tony. Pretzel shows a possible count topping out at this range, but shows a possible decline to 1935 or lower. Would that mean the bull is over with a drop below 1990?

    • Pretzel never accepted this years move and still looks for any reason to call an end to it.
      I can see that the real die-hard bears have been hibernating of late with a few exceptions. This is the correct action. I mentioned after the BIG breakout event we were in for some boring but higher biased moves. I can’t play these daily gyrations because I am not that good. I believe sometimes its best to sit back. Next event is cumulative quarterly profits. I don’t expect a deviation in current expectations but since the forward one is so high, I believe 9 percent, the corporate announcements and guidance will be most interesting. Was away for 3 week to Spain. Loved it. No sign of depressive activity there. Eating and drinking from mid-day to midnight every single day. They walk the streets and communicate with each other and hardly a cell phone interference. A throwback to the days when we used to do the same. Granted not in my day but there was a time…

      • Wernt you expecting gdp to be 4 percent?keeps dropping like all other times, my guess is ends at 2. Still no growth, just higher PE. And a fed that doesn’t want stocks to ever go down. Doesn’t mean we don’t chug higher, but it’s the same old , no real improvement but stocks contumely move higher. Somethings got to give eventually.

        • The improvement is in the consumers health. All data points show this. Will it eventually cause a breakout momentum? With wages still low and corporate squeeze on profits I suspect we maintain a steady domestic economy but no real surge in GDP yet. The GDP figures are misleading. The consumer based numbers are very strong. Household spending rose at a 4.2% annualized rate in the second quarter. Looking at the makeup of the numbers is most telling. Business spending has been dismal for a long time now. At some point they will be forced to accelerate that spending for competitive reasons and old equipment.

  26. Happy baseball post-season .Cubs or Boston?Amazing year Ortiz had isn’t it?Lots of potential and actual -divs on at least 3 time frames for SPX.Looks like a fun October.GDX had some of the lowest volume declines of the year,this week.Previously–that led to some big up moves.Good luck all. (If the Cubs don’t win THIS year…there HAS to be a jinx…lol).Thanks Mr C.

    • tony caldaro says:

      PEDS really does enhance performance

      • Lol.Wasn’t he accused of that early in his career?This years numbers are as amazing as Bonds did at his age–and suspicious as well.Maybe Comie will investigate…lol.

        • tony caldaro says:

          Yes, positive test, but never served time.
          The 2013 world series tipped me off.
          The entire team was batting under .200 against Cardinal pitching, and he was batting over .700.

          • guavaghaut says:

            I like all the comments, and the most valuable are those OEW focused. Some weekday comments on daily stock price moves are just conclusory statements based on bear/bull attitude without EW support. I assume most readers ignore those.
            And I almost never comment. But this caught my eye.
            On Ortiz, it’s not OEW, but it’s the weekend so a bit of off EW topic is ok I sense. His own comment, to give both sides….e.g. a possible alternative count, is :
            “Mark my words: Nobody in MLB history has been tested for PEDs more than me. You know how many times I’ve been tested since 2004? More than 80. They say these tests are random. If it’s really random, I should start playing the damn lottery. Some people still think the testing is a joke. It’s no joke. Ten times a season these guys come into the clubhouse or my home with their briefcases. I have never failed a single one of those tests and I never will.”
            I greatly value this site.

  27. kvilia says:

    Thanks, Tony. Pretty simple – next selloff action will show direction. Reposting from yesterday if you don”t mind:
    “All right, Tony. So let’s take the OEW aside. Deutche has leverage of 40, Lehman had 31. Central banks are killing banking business with zero rates, Wells Fargo is another example. 2008 began with banking crisis, 2016 – ?
    So how in the world can anyone calculate high probability of expanding bull market? Isn’t bull about growth? Why do you think Trump is running for president? I just think there is enough evidence to be at least cautious going forward.”

    • tony caldaro says:

      Last I read DB had 70-80 times leverage. But that was last year.
      GAAP earnings declined for 6 quarters. Bear market 2015-2016 coincided.
      Earnings ticked up a bit in Q2.
      Energy rebounded suggesting SPX earnings improvement in Q3.
      All that is lacking is a growth oriented fiscal policy.
      One of the two candidates has that. The other has a status quo policy.
      If one is bearish you know who to vote for =)

      • rbazuin says:

        That “growth policy” is worse than the status quo. It failed over the last 30 plus years to provide improving conditions for all but the very wealthy. Trickle down economics, tax cuts, supply side economics, deregulation, U.S. Interventionism–all have led to the boom and bust cycles of the last 15 years with one more crisis to come.

        • Bill Clinton contributed to that as well…the 90s were boom/bust to the max.The problem is not tax cuts,it’s jobs leaving the country starting with NAFTA–which Perot had exactly right.That started the downward path…plus no incentive to get off welfare…and illegal immigration AND etc etc etc.

          • tony caldaro says:

            Problem is not de-regulation, it was just the repeal of one law: Glass-Steagall Act of 1933.
            Why did they repeal the law which worked quite well for decades? Lobbyists!
            Since the early 1980’s there have been two minor recessions and one bust.

            • rcun says:

              Tony- not simply the repeal of Glass-Steagall, but the hideous implementation of Dodd-Frank. Since Dodd-Frank not one “crookster” has been convicted and spent a day in the big house. Crooked politicians pockets being lined by the bankers.
              Will this latest Wells Fargo catastrophe be the end of the road for Dodd-Frank? I think Janet is shaking in her boots at the thought of a “Donald” 4 year term. Repeal Dodd-Frank and Obamacare. Sounds good to me!!!
              Thanks so much for the help you provide and this forum. Best to what’s left of the weekend.

      • Good points Tony.
        I don’t post much, and certainly don’t want to start a Political topic here.
        Folks are touchy.
        I posted this chart once or twice already.
        The Republican candidate was considered an amateur until he won votes, a lot of votes on March 1, 2016. Super Tuesday.
        Seems that’s where this rally started.
        Here’s that chart again:

        The guy likes to pour concrete.
        Seems he prefers doing that go going on vacation.
        Here’s a 10 year chart of Caterpillar.

        What’s up with that?
        Just saying, an aggressive Fiscal Policy can easily drive the market a lot higher.

        Thanks for the great blog Tony!

  28. jobjas says:

    Tony , an irregular intermediate 2 shows the pent up momentum to the upside which should be followed by an highly impulsive intermediate 3 not a subdividing intermediate 3 .May be time to consider other alternatives

  29. pkr97 says:

    GM Tony sir,

    In daily chart why can’t we assume 2120 as int I (purple) from there fall to1991 as Int II(purple)

  30. vivelaamo says:

    Thanks Tony. Newbie I love you.

Comments are closed.