Weekend update

REVIEW

The market started the week at SPX 2786. After a Monday holiday, the market gapped up on Tuesday to new highs (2808), then pulled back to 2769 before rebounding in the afternoon. Wednesday had another gap up opening, but the high was only 2807. Thursday the market traded above/below SPX 2800 all day with little upside progress. Friday had another gap up opening, pulled back, and then closed at an all-time high SPX 2810. For the week the SPX/DOW gained 0.95%, and the NDX/NAZ gained 1.05%. Economic reports were mostly lower. On the downtick: NY/Philly FED, home builders index, housing starts, building permits, and consumer sentiment. On the uptick: industrial production, capacity utilization, plus weekly jobless claims improved. Next week’s reports will be highlighted by the Q4 GDP report.

LONG TERM: uptrend

Back in 2016, with the SPX trading around 2000-2100 very few expected a SPX 3000 in the next couple of years. Our analysis, at that time, suggested a SPX 3000-3600 in the next 2-4 years. With the SPX hitting 2800 this week, a 1000 points above the 2016 low, SPX 3000 is no longer that far away.

The count remains the same. A Major 1 bull market underway with five Intermediate waves. Intermediate waves i and ii completed in the spring of 2016. Intermediate iii then started to divide. Minor waves 1 and 2 completed in the fall of 2016, and Minor waves 3 and 4 completed in the spring of 2017. Minor wave 5 has been underway since then.

MEDIUM TERM: uptrend

The current uptrend, Minor wave 5, is one of the longest uptrends, without a correction, in many years. In fact, the last time the market had an uptrend this long was in the early 1980’s. The internal structure of a Minor wave 5 is quite naturally five Minute waves. Minute waves i and ii completed in June/July, and Minute iii and iv completed in November. Minute v of Minor 5 has been underway since then.

Reviewing the daily chart above, you will note the RSI/MACD negative divergences at every significant short wave during this uptrend. You will also note that the Micro waves (org.) were previously quite clear. But not so for this Minute v rally yet. In fact, the SPX has rallied 200 points without one quantifiable short term reversal. Quite a strong market! Medium term support is at 2798 and 2780 pivot, with resistance at the 2835 pivot.

SHORT TERM

As noted above. This rally has been so strong that it has failed to leave behind the normal short term quantifiable wave markers of this bull market. We have some, then more on a shorter timeframe, then a few that look like they should fit. The puzzle; basic: 2590-2578-2658-2606; shorter 2665-2625-2672-2652-2695-2674; fit: 2759-2736-2808-2769-2810.

A number of wave counts can fit the above price pattern. It is not about short term wave counts at this time. Think it more about the wave pattern, 15-waves, and the technical indicators. Both suggest higher prices ahead before a significant correction. Nevertheless we can count five up to 2665, a decline to 2625, then nine up to 2810 so far. And have posted this count. Short term support is at the 2798 and 2780 pivots, with resistance at the 2835 pivot. Short term momentum ended the week overbought. Best to your trading!

FOREIGN MARKETS

Asian markets were mostly higher and gained 0.9%.

European markets were mostly higher and gained 0.3%.

The DJ World index gained 0.9%, and the NYSE gained 0.7%.

COMMODITIES

Bonds continue to downtrend and lost 0.6%.

Crude remains in an uptrend but lost 1.5%.

Gold is also in an uptrend but lost 0.1%.

The USD remains in downtrend and lost 0.5%.

NEXT WEEK

Wednesday: existing home sales. Thursday: jobless claims, new home sales and leading indicators. Friday: Q4 GDP (est. 3.0%) and durable goods.

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

About tony caldaro

Investor
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217 Responses to Weekend update

  1. SP chart used to decide to go short….long/SDS

  2. Bud Fox says:

    re SPX…been looking at the price rise from 2016, and the angle
    of the price rise does look pretty steep. The sharp rising pattern,
    which looks like about 45 degrees — suggest to me that we are into
    a more terminal price rise. A rise that is sooner, vs later…going to fail
    the bulls. Yes, I am a Bull on the SP, but the rate of the rise
    is concerning to me. Watching closely, for the ultimate reversal, down.

    • micky says:

      yes that is what you have been saying repeatedly for weeks or longer now.

      • Bud Fox says:

        SP500 topped at 12:53 est..but, my charts are calling the SP top
        as a W3 of 3, so looking out, the price rise is still there. I am merely,
        working on my own trading skills, nothing wrong with that….

      • Micky….I appreciate your comment, albeit impolite.
        But, you’ve made your point.
        I shall no longer post here, copy to Mr Caldaro. attn:

      • Micky…..It has been said, you can count to 5.
        Here is a great chance to show the group your
        amazing investment talent. Go for it Micky.
        Remember, I’ll be reading and taking notes on your
        investing magic….end

        • micky says:

          OK, here is some magic for you Bud.
          Throw away your momentum indicators in a trend.
          Only trade in the direction of the trend.Trends are the stuff that makes you real money.
          Support and resistance are only good if it holds.
          Do not try to impress others.
          Dont trade the very1st wave or move in any direction.
          Use TC and this board to learn,we are all permanent students.
          There are many other rules..
          Most important besides money management and position size is to have a good technical system.
          btw, counts can and will be adapted, and if you must count,be able to count further than 5.
          IMHO….end.

      • lunker1 says:

        Micky, Bud is almost as old as the spring hills in Florida. give him a break

  3. lunker1 says:

    NEWBIE WRONG AGAIN
    KABILLIONTH TIME LOL

  4. phil1247 says:

    es 2820 .. then 26 then 53

  5. torehund says:

    Biotech up 3,6 percent and Rut hovering around zero, some sectors must have taken a hit.

  6. quickrick38 says:

    Looks like silver might be breaking up.

  7. fotis2 says:

    USD/JPY Daily triple top finito currently HWB from last year Sep lows
    Weekly
    https://invst.ly/6eq4v
    Daily
    https://invst.ly/6eq5y

  8. fotis2 says:

    Many were waiting for gap down on dollar because gov. shutdown not out of the woods yet but a 3BR today would also confirm a DB on the daily get Bulls excited again.Again another example of news being completely useless in actual trading’
    https://invst.ly/6elh7

  9. Phil: I think you are referring to the fact that ABC’s chart shows us to be in micro 3. Is that correct?

  10. IMHO….the SP500 is completing a W3 of a 5 Wave advance at 2800.
    W4 down, is next to come, followed by a final 5th wave up to complete
    the up pattern. Primary price support lies at about 1775….

  11. Thank you Tony for the update, my thoughts:

  12. mcgcapital says:

    US markets up 5.4% month to date and we’re not even rallying off a correction. That in itself should be enough to think hmm could there be some profit taking into month end. Then you have a news catalyst in the shutdown. And the Dow is showing indecision around 26000 on the daily for the first time in many months. At this point a 2% pullback feels massive. Everywhere I look people are talking higher and nobody says it will go down anymore.. retail flooding in.. sentiment and RSI never been this hot before. Dangerous market to be involved in. Of all the people I follow on Twitter/social media, it’s getting hard to see who’s a good trader worth listening to and who just buys constantly. Rarely see anyone say where they would get out of longs if it goes pear shaped so have to assume they’re gambling on a trend continuing indefinitely which by definition can’t end well.

    FTSE I have no change to my view we’ll retest the breakout at 7600 then probably up again for a few months. Choppy rally off 7690 support, needs to break that for the bigger move. Above 7760 invalidates.

  13. Spencer Hall says:

    The next inflection point is the 1st week in February. I.e., fundamentals precede technicals. Pay attention, actionable trade forthcoming.

  14. torehund says:

    lol, bitcoin are for drivers.

  15. learnedmylesson25 says:

    COT chart for gold has moved into a bearish mode–almost as bearish as it has gotten the last year or so.I have a theory that gold and equities are starting to link up,short term.Gold did not stay embedded–look for a pullback this week.The political standoff has the potential to be the catalyst to scare the markets.If they don’t get a continuing resolution before the market open Monday–could be interesting to the downside.Or not …lol.Good luck all.

  16. phil1247 says:

    kvilia . RE : PUG

    he has been calling a top since august 2017 looking for a SPX 2500 peak
    needless to say he has been screwing the pooch for months top picking

    DH is the only way you are going to find the top
    Elliott wave is quite useless for trading .short to intermediate term
    since you never really know where you are
    with DH you will see the top develop in front of your eyes and there will be
    no question where you are
    longer term ew can be useful

    this is exactly what allowed me to pinpoint the TLT / bond peak
    when people were pounding the table for TLT to 165… ( and still bullish now ..lol )

    i warned that 10 year notes were the canary in the coal mine
    this canary continues to die a horrible death ….. as DH method warned .
    . even tho DH himself missed the boat again……
    as he did at the all time bond peak

    kvilia…..in summary .. dont rely on PUG or me or anyone else for answers
    you have to do your own homework
    good luck !

    • kjb0 says:

      Thanks Tony.
      Now we’re talking Phil…. Day trading aside, we are interested in your DH method analysis for the US Markets (SP500) on a short, intermediate and longer term time frame. These are the same time frames Tony analyzes. These are the time frames that most here are interested in. It would be great if you could break these down for us and give us the DH interpretation also.

    • pooch77 says:

      Has the high and mighty fallen

    • phil1247 says:

      perhaps the “melt up ” in ES will end
      when the ” meltdown ” in ZN hits target

      or perhaps sooner if BOEING should stumble
      nahhhhhhhhhhhhh. it can only go up … right ?

    • Re PUG: not to mention an extremely obnoxious individual.

    • kvilia says:

      Phil – just mentioned PUG as an example. This is a parabolic move, and I saw how they ended before. And that’s why I mentioned a couple of days ago to another gentleman that scalping is the only way I see working for me at the moment. Capital preservation is a must, and if I felt comfortable to hold a position for a week just several weeks ago, now I’m nervous holding overnight. Been there few times, and I’d rather keep my money (or as Maloney says currency 🙂 ) safe than chasing a wave. All it takes is several 5% down days to loose 20-25% of investment if you don’t have tight stops and not on it every day. That’s pretty much how a successful investor makes in a year.

    • PUG is feeling the heat tonight…..

    • Bud Fox says:

      now, he tells me. 🙂

    • Bud Fox says:

      Wow, that was a mouth full of crap…do your own homework. 🙂
      I come to this site, (1) it’s Caldaro’s. (2) info is the best,, but ya have to
      do your own research, as well (3) this site and charts have been
      fantastic, for as long as I can remember. How about the 1982 low,
      for starters. As for me, been in and out of the US equity markets
      since 1982.

  17. Hi,oil is at falling trendline of 2008-2011 highs(blue) and at rising MT trendline(black),a crossing
    Oil confirmed H&S,target ~76
    Could be easy to progress and reach the target “IF” it pass trough the crossing

    Oil
    https://invst.ly/6ehtq
    Eurusd
    https://invst.ly/6ehvb
    Dollar index seems to be in an expanding pattern
    https://invst.ly/6ehxk

    Ciao!

  18. J.Wenger says:

    Thanks Tony. Hope your recovery is going well. S&P 3000 was one hell of a call!
    Stock Market Outlook – Week of Jan 21st = Uptrend

  19. fionamargaret says:

    http://amateur-investor.net/AII_Weekend_AnalysisJan_20_18.htm
    Thanks Amateur-Investor

    http://tradingdiary.incrediblecharts.com/
    Thanks Colin Twiggs

    Thanks Tony for a great Weekend Update….you are on the mend…just believe it….xx

  20. captbara says:

    Everyone seen this yet? Oil chart moved forward 10 yrs has been an interesting predictor of the markets. 2018 (or thereabouts) will mark a top if it plays out.

    http://stockcharts.com/articles/tac/2017/02/tom-mcclellan-crude-oil-foretold-the-trump-rally-10-years-ago.html

    • fionamargaret says:

      I left the latest of McClellan’s charts last night on the Thursday Update, but I had been writing, so my mind was totally fried, and I really couldn’t figure out what he was trying to say.
      Is he really obtuse or is it just me….there can always be a connection if you look for one, backward date etc…..sorry Tom…picking horses is easier…hope someone picked Nicky Henderson’s “Might Bite” for the King George Chase…there is a great story around that trainer and horse…and he was the closest to a sure thing you could get..though what is a sure thing over sticks…..

      • STEPHEN BARTLETT says:

        Yes. He always goes the wrong way after the last. Although he won’t stay at up the hill at Cheltenham so conflicting signals.

      • Fiona…
        Agreed, chart analysis, for now. Is a very complicated ordeal.
        Chart analysis, right now. Is very confusing at the present time.
        Bud

  21. stormchaser80llc says:

    Hello everyone! My complete blog post at http://navigatethemarketstorm.com is open to the public each weekend. If you like the post, you can sign up for a FREE subscription to view this analysis daily at the bottom my blog post! To concentrate my efforts on my health and development, posting to this blog will only be done twice weekly, each Wednesday and for the Weekend.

    My proprietary Technicals Model has been up for the 43rd day in a row, the longest streak since I started calculations in 2006. Major market momentum at play here!

    As of Friday Jan 5th both of my swing trade signals are BULLISH, yes much much too late this time.

    HYG:IEF has broken October peak levels, and not far off from March 2017. Very key chart!

    SPX daily hit All Time Highs today. Negative divergences remain for RSI and ADX DI during the past week. Countless Hindenburg Omens have occurred since this past summer. Still feel its likely that the next top will be a SIGNIFICANT TOP. At the All Time Highs, SPX hourly shows negative divergences back to late November for many indicators, therefore I am expecting SPX to turn lower soon.

    My proprietary Technicals Model was higher for the 43rd day in a row, with a positive divergence at 9/1’s peak vs. SPX, foretelling of this bullish run. On 11/30 it fell just short of making a Technicals Thrust. The Cumulative version of the Technicals Model made a new All Time High 1/17. My statistically driven Volatility Model is contracting but for how long, nobody knows.

    VIX finished much lower, on a hourly MACD SELL signal. Negative divergences seen at the recent top on the hourly chart and especially the 15-min chart indicating lower VIX should be coming in the short term, and it sure has!

    Market Internals, participation and breadth indicators, were mixed today. Many of these are in positive territory, yet are well off peaks from last year. SPX A-D line made a new All Time High on 1/19, obviously above its 20 dma which is rising. SPX McClellan has been positive for the 13th day in a row.

    Economically, while most talking heads are yammering about the downward trend in 10Y-2Y (The Yield Curve is flattening to 2007 levels), my work dating back to 1990 using the slope of linear regression at all maturity levels shows since 2010 the yield curve has been rising (Bullish Economy) and is well off the levels that foretold a recession in 2000 and 2007. In fact, rising to these levels, matches up well with 2005, 1997 and 1995. Not bad years for stocks, eh?

  22. tmac24 says:

    This isn’t a knock on anyone, but other than being speechless…. Not a single person can see any significant downside ahead of us. Not just here, people you talk to, friends, family.

    • ewmarkets says:

      This is not my impression. People have said a 5%-10% pullback can happen anything. Many here said Wave INT iii can end after two more waves (1 pullback wave and another up wave). This really can happen in a day.

  23. mjtplayer says:

    Hey Tony – hope you’re feeling better and recovering well

    Question: are the DOW (and S&P) monthly RSI at record overbought conditions, at 99+ each? MACD is crazy too, off the charts. With all-time record fund inflows over the past 4 weeks, the euphoria has made it’s way to main street too. Mom and pop investors have been buying over the past year but have accelerated their purchasing recently, I wonder if they are “all-in” yet?

  24. llerias7 says:

    SPX is now an Express Train in route to the 3000 station!..then a boring Int. IV after that!

  25. Raymond Shad says:

    Get Outlook for Android

    ________________________________

  26. kvilia says:

    Thanks, Tony. I’m a bit obtuse this morning. It seems that there is RSI negative divergence, yet higher prices expected. No comprehendo, por favor.

    • lunker1 says:

      still orange 3, 4 and 5

      • kvilia says:

        Thanks, lunker. It has green 3 as tentative. PUG had 2808 as a top of this uptrend. Certainly not an easy long entry to make. IV could be nerve wrecking.

        • lunker1 says:

          2808 is just another number. see pug dec 27 tweet. different numbers. and now a different count. he said 2700 then down to 2400 and then 2100. Now it’s 2800, 2600 then new highs with major 5.

          throwing darts….

          • fionamargaret says:

            Here is the chart that Pug sent to my attention…hope this helps in some way….

            • fionamargaret says:

              Click on to enlarge…2870…I do use 12358 format on occasion….I like to get into Tony’s sequences, but that can lead to quite intricate patterns….

          • kvilia says:

            Well, throwing darts, calling tops, why not? According to Fiona’s reference to Amateur investor, SPX@3000 will be the farthest from the mean ever. This will not end well, complacency isn’t a word any more. Irrational exuberance? I have a feeling, this will just need a week to go down 25% considering circuit breakers.
            Everyone should be buying UVXY and holding it until it will go to 50 or 100. For starters.

            • fionamargaret says:

              UVXY was my pick of choice a couple of days ago…I may be early…and forgetting oil until it shows a map.
              (I hold the oils through DBA which is everything, but not getting rich quick…)
              Gold is much more interesting hypothetically, as it has not really started its 3 up, and I do think GDXJ (which I believe will double) will drive us insane until gold starts moving….
              1600 is the first target for gold, but add in NK et al…. 3500.
              Nice to speak with you again Kvilia x

              • fionamargaret says:

                Sorry DBE is the oil one…DBA is the grains one…COW is livestock…DBB is base metals…DBP is gold, silver etc….DBC is the basket.
                If you feel the market is going to correct, perhaps the actual commodity will do better…or not…

  27. John Bell says:

    targets for this up movement – best guesses.
    I had forecast that the first quarter would be strong and go up as much as 10-14% by March sometime.

    A 12% gain for qtr1 puts us at 3000. We are about half way there.
    That is my target area. Not necessary the very top for first half of this year, but the target for this powerful tax cut wave. A wave 3 of some degree.

    We can get flat consolidation periods of course and that is expected. If earnings stay good and tax cut benefits are mentioned a lot in forward guidance adjustments, then I see the 10-14% first quarter gains all possible.

    WAG guess is initial top on March 1 at about 3000. Some may say later in March, but some potentially negative “stars” are aligning soon after March 1.

    I have been fully loaded for most of this fast rising climb and have some sell stops at 2970 area to begin selling some.

    tx TC for having this blog and best to your health.

    ==> Comment on technical analysis people. I see many places people declaring this is so over bought using the MACD or PMO values on daily charts. If your declaration of “normal” is from only the last 5 years, my comment to them is expand your time frame out to 25-35 years and you will see that PMO and MACD have been much higher and were often a prolonged initiation period of a coming long up trend.

  28. Kisshu2 says:

    Thanks Tony,
    could there be a vote soon in the Senate of “no confidence” in the Supreme Chancellor?

  29. vivelaamo says:

    Thanks Tony.

    Also thanks all for messages.

    Keep Safe, Keep Bullish.

  30. Thanks, Tony. The 34ma weekly started its topping process. Also longterm pitch Dow and SP500.

    http://www.traderscrossover.com/store/index.php?p=intra

  31. scottycj1 says:

    The market will never go down……..”This time is different”

  32. Thanks Tony. Hope you are getting better.

  33. Lee X says:

    Thanks Tony

    Hope you’re feeling a little better everyday.

    Ive done a little trading in the merc BTC futures these past couple of weeks , Jamie Dimon sez it’s legit so I feel safe 😉

  34. 123 abc says:

    Superb update Tony; much appreciate the detail count.

    1. In regards to the puzzle, would the below chart be a possibility under OEW theory? If so, it would suggest 11 waves up from the 2606 lows thus far.

    2. In regards to the lowest degree in OEW theory, are Pico waves the smallest or do Femto waves and even smaller waves exist in the OEW particle accelerator? 😉

  35. tmac24 says:

    T, hope you are feeling better.

    VIX divergence with SPX
    longest number of trading days without 3% correction
    TNX trying to breakout

    hard to see move past 2850 before at least 3%-5% correction

  36. learnedmylesson25 says:

    Is it possible to extrapolate from your 15 wave remark,that we are not halfway through this minute v?That another 300 points is possible?Thanks,and hopes for continued improvement for your health Mr C.

    • lunker1 says:

      Impulses are 5, 9, 13, 17… Etc. so the green 3 is a tentative orange 3, then orange 4, then orange 5 to complete a 17 wave impulse. Or could continue to 21 etc

  37. Thanks Tony,
    I include myself in those few who believed in a bull market continuity because TA indicated this, but it is surpassing my most optimistic expectations,really a strong market,so i am slightly changing some perspectives because of that
    DOW
    https://invst.ly/6ebvp
    https://invst.ly/6ebw-
    Ciao!

  38. torehund says:

    Thanks Tony !

    Cruise control modus in the markets, almost a bit boring at times 🙂 Trump is delivering on all fronts as expected from the P-III cycle he entered or created. Wonder when the grumpy democrats chooses to join the party, at that point in time we REALLY have to fine-count the waves. On ting is for sure, it will not happen for a long long time. Lets snooze 🙂

    • micky says:

      Tore, if my memory is correct you mentioned primary 3 was possible a very long time ago.And it was because of the macd reading?

      • torehund says:

        Yes Mickey, the length of the macd correction sufficed to brand it a bear market. As the oscillator lost ground at such high altitude, price-wise the losses were not that great (20 percent or so). I still compare the oscillators to price. That being said, in my nanocap world things are inherently very difficult they trade like options 🙂 I am getting more and more humble…Well my dream is to hit a multi-decade retrace on one of my stocks. Its one of the “impossibles” but home-runs have happened before in history 🙂 These stocks certainly trade more like Electrons, Dow however is a freight train.

  39. Xy Z says:

    Thanks Tony.
    Hope all is going well with you.
    Every time I think we might be peering over the top of a precipice things grind even higher. Do you have a feel for when Int iii / Minor wave 5 might complete?

  40. Hello….my comment today, is more of an “alert”…as to what
    the market is doing, and what is forming in the world news. That
    news. Is centered around the Korea’s. South Korea, and the US
    are noted to be building the B52 compliment. Now. It is clear
    something is brewing in the confrontation with North Korea. If the
    world situation continues to degrade. The the SP market, will sense
    that, and down we go. Something to take into consideration with
    trading long…..IMO

    • Bud you are so doom and gloom. What happened to your thoughts about buying and just letting it sit? Something about 2009. You are so bearish, ahhh

      • Bud Fox says:

        SP500, 2600 ish downside PO.EW….
        to bring you uptodate. I am in the process of moving to the Bear side, in the SP500 index. But, that is not to say we shall move into an extended Bear market. Expecting a rather
        severe/short term correction. My concern is, Do I want to hold
        long positions (for tax purposes) during the coming decline. If
        we can get to 2600 level, As it has been suggested. . Then,
        I can quickly get back long. You follow?

      • Trust me. Today, I keep my investment views, tight and close….
        No disrespect, to Tony and the OEW group….

  41. jobjas says:

    BTC heading to 21000 to complete primary1

  42. Thank you Tony for the work that you put into these updates. I hope you are continuing to improve. Little warmer here in the South for the next few days. I’m glad to thaw out a bit. Wishing you the best.

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