Weekend update


Another wild and volatile week on wall street. The market started the week at SPX 2641. After a gap down opening to start the week on Monday, the SPX hit 2554. Rebounding with a gap up opening Tuesday the SPX hit 2619. A gap down opening followed on Wednesday, dropping the SPX to 2574 at the open. But the market reversed and rallied nearly 100-points by Thursday to SPX 2672. Then another gap down opening started a Friday decline to SPX 2586, before ending the week at 2604. For the week the SPX/DOW lost 1.05%, and the NDX/NAZ lost 2.20%. Economic reports were biased negative. On the downtick: ISM manufacturing/service, ADP, monthly payrolls, consumer credit, plus jobless claims and the trade deficit rose. On the uptick: construction spending, auto sales, and factory orders. Next week’s reports will be highlighted by the FOMC minutes and the CPI.

LONG TERM: uptrend

After nothing more than a 3.3% correction over a 15 month period, the market has made up for that calm with, thus far, a two month volatile storm. After hitting an all-time high at SPX 2873 in late January. The SPX dropped 11.8% in two weeks, rallied 10.6%, then dropped 8.9%. Our analysis suggests this week’s Monday low, SPX 2554, could have ended the Intermediate wave iv correction.

The Major wave 1 bull market from February 2016 continues. Intermediate waves i and ii completed in the spring of 2016. Minor waves 1 and 2, of Intermediate iii, completed in the fall of 2016. Minor waves 3 and 4 completed in the spring of 2017. Then Minor wave 5, and Intermediate wave iii, completed in January. Intermediate wave iv has been underway since then. And, may have bottomed this week in a flat.

MEDIUM TERM: downtrend may have bottomed

Intermediate wave iv began in late January, with a large three wave decline to SPX 2533 in February. This was followed by a complex three wave advance to SPX 2802 in March. Then a five wave decline to SPX 2554 bottomed on Monday, April 2nd. At that point there were daily RSI positive divergences on all four major indices. Usually a good indication of a significant low.

The market then rallied 118-points (2554-2672) over three days. Despite a 40-point gap down opening in the middle of that rally. We counted five waves up on the one-minute chart [2554]: 2619-2574-2672-2650-2672. And, quantified it all as one wave up too. Friday’s 35-point gap down opening started, what we thought was, a wave 2 pullback. It could still be. But the decline, 86-points, was quite steep. Medium term support is at the 2594 and 2575 pivots, with resistance at the 2632 and 2656 pivots.


As noted above, the five wave rally was: 2619-2574-2672-2650-2672. There was a weak 5th wave, so support could be between the wave 1 high and wave 2 low (2574-2619). The Fibonacci support levels did not hold during Friday’s selloff: 2599, 2613, and 2627, as the SPX dropped down to 2584 before rebounding some into the close.

Should SPX 2574 be broken to the downside, then this recent rally is probably just part of an ongoing Int. iv correction. The SPX will need to get back above the mid-2600’s to turn things positive again short term. Short term momentum ended the week quite oversold. Best to your trading!


Asian markets were mixed and gained 0.2%.

European markets were mostly higher and gained 1.1%.

The DJ World index lost 0.6%, and the NYSE lost 0.8%.


Bonds are uptrending but lost 0.1% on the week.

Crude is uptrending but lost 4.4%.

Gold is in a downtrend but gained 0.7%

The USD is uptrending and gained 0.4%.


Tuesday: PPI and wholesale inventories. Wednesday: the CPI, budget deficit and the FOMC minutes. Thursday: jobless claims and export/import prices. Friday: consumer sentiment.

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

About tony caldaro

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597 Responses to Weekend update

  1. xuwu99 says:

    Wow, what a weak and lame rally we had today. Given the good news and overall external environment, a 60+ S&P points would be normal and adequate. However, the rally was so wedgy and zigzagy, and there is no way that this is the “3 of 3” as I envisioned. In fact, the very ending sets up a gap-down open tomorrow. If this is NOT 3 of 3, and esp. since the 2672 was not taken out, the extended fifth of C (crash leg) is still viable. (sold all my calls with good profit, and prepare for the bear side tomorrow).

  2. Quite a standoff this afternoon.
    What is not said is that if the perma bulls don’t get this market going up very soon, something else will happen. And I don’t think that means “sideways“. We just did that.

  3. What a whippy day. No sustained rallys. Needed to be quicker than me to grab the rings.
    Still up 0.65% overall, but could have been higher if I just sold at certain BB upper bands (which ATM is not part of my signal).

  4. kvilia says:

    Very lame rally. More and more feeling that bull market top was in.

  5. H D says:

    Tony, very choppy wave 3? You ok with the price action for a 3 still?

  6. Clear cut resistance on $SPX….looks like 2675….quick move up to close gap…and….touch the fade spot @ the 50 day…..or…….blow out move towards 2750-2800, but I personally don’t think we bust 2875

  7. stan911 says:

    2663 gap filled

  8. Theodore Lerts says:

    The immediate bearish setup was just too god to be true….

  9. stan911 says:

    Wouldn’t surprise me if they dropped this back to 2624 gap then run it back up to 2663 to fill gap above

  10. tommyboys says:

    Pivot time 2656…which way will she break…mmm

  11. rd3777 says:

    Another day…another phony distribution rally…

  12. phil1247 says:

    upon further review ..

    there was an illegal shift by the bulls before the snap on the fumble play
    the ball has been placed at the 46 yard line
    and the bulls still need to get to the first down marker at the 65 yard line

    reset the clock please………………………

  13. Billy says:

    On the bigger drop which came just after the hour mark on a, yes, Tuesday YM and ES found support right at the 50% retrace (YM in particular was picture perfect) of the move up from yesterday’s late session lows. In the overnight session one could argue a possible 5 waves up to the 10.30am highs then followed by a 50% retrace (still holding) “should” offer the opportunity for at least one further higher high. A plausible assessment but difficult to have high conviction on any near term outcome in this market at present.

  14. phil1247 says:

    Bulls came within 2 yards of the first down marker at the 65 yard line
    but the ball was ripped away by the linebacker causing a fumble
    the play is currently under review but if the call on the field stands
    it looks like the bears have the ball again

    see ya !

  15. gary61b says:

    ES, rising triangle is containing nicely so far, a drop out the bottom or a push out the top, many magnets to choose from. https://gyazo.com/6bd858bc1f8915971dfbb1b92080e0cc

  16. Holly Silver says:

    A reprieve over Trade Wars but it will happen. China trying to be conciliatory over everything but High Tech transfer to their country. Trump insistent they sign a pledge not to seek high tech. never going to happen. Their 2025 program will not be stopped. US hard line on this ONE issue will result in tariffs in next 45 days or so.

    Current move not impressive. Big swings again today means there is no traction. 2672 has to be reached soon. Turned back twice recently. This still looks like we haven’t finished the recent drop. I expected today to be a breakout event. Earnings season upon us. if that doesn’t do it abandon ship.

    This is the most confusing frustrating market to interpret. Big battles drawn with no clear winner.

  17. Billy says:

    The YM drop stopped just short of the 61.8% retrace of the rally that started 9am, ES just over the 61.8%. The HODs on INDU/SPX closed the gaps left from last Thursday’s close. Overall still a trendless crap shoot. According to Fed Kaplan he expects no resolution to trade issues for months at a minimum and, in regard to some sectors, possibly years. So expect volatility to rule for some time and remember, pigs get slaughtered.

  18. E says:

    Doesn’t there still appear to be something wrong brewing in the market with VIX continuing to stay so high despite these massive rallies over the past two days?

  19. mcgcapital says:

    If this is a bear market, FTSE is right back where I’d expect the rug to get pulled. 7250-7350 key resistance with the downward sloping 200 day just above that range. I’d expected it to rally back to retest here, but just surprised the SPX is so far back as I thought we’d be at 2800 by now. Maybe US markets aren’t going to go up, tech bubble bursting and a big sector weight. Anyways shorted FTSE at the close, will see where it goes from here

  20. Jack kendo says:

    DJI sudden drop 145 points in 3 min
    11:43 24504
    11:46 24359
    a news came in, possibly related.
    well, news not allowed here, or be banned.

    • jobjas says:

      Project and not react with EW.
      Place a limit order just below your target price and get filled rather than chase the price with a market order after the event.
      News , views and events are good for discussion later on and there will be a large crowd following you .

  21. pooch77 says:

    Was going to remind you of high call tomorrow

  22. phil1247 says:

    hris Carolan

    2h2 hours ago
    The “combo” chart combines the Solunar Model with tidal data. It’s been nails in 2018. And it turns bearish again mid-week. This chart is updated through mid-June in the subscriber area. Caveat – when markets become rational again, it will stop working.

    BIG props to Chris Carolan
    his tidal charts turned the ” tide ” against those calling for a crash

    but now the turn is at hand
    be sure to read his caveat again

    thanks Chris………… you rock !

  23. Flag pattern break out on the 1min and 2min.
    +12 pts measured move = 2672

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