Weekend update


The week started at SPX 2718. After a gap down opening on Monday to SPX 2699, the market rallied for the rest of this holiday week. Tuesday’s gap up opening carried the SPX to 2737. Then after a pullback to SPX 2713 by Tuesday’s close, the market gapped up again on Thursday. By Friday the SPX had hit 2764, then ended the week at 2760. For the week the SPX/DOW gained 1.15%, and the NDX/NAZ gained 2.4%. Economic reports for the week were mostly positive. On the downtick: the ADP, Payrolls, plus jobless claims increased. On the uptick: ISM manufacturing/services, construction spending, auto sales, factory orders, and the trade deficit improved. Next week’s reports will be highlighted by the CPI/PPI and export/import prices. Best to your week!

LONG TERM: uptrend

Trade and tariffs have in the news for weeks and months. In fact, the POTUS started this whole series of events back in January: https://www.nytimes.com/2018/01/22/business/trump-tariffs-washing-machines-solar-panels.html. Initially most stock markets fell: Dow Jones Global index dropped 11%. Since then most world markets have stabilized, except one: China. Since its January high it has dropped 24% in one continuous downtrend into a bear market. S. Korea, which is also mentioned in the article is only down 14% from January. And the US is currently down only about 5% from its January high. China is the clear loser in any trade war with the US.

Nothing has changed with the long-term view. Super cycle low 2009, Primary I high 2015, and Primary II low 2016. Primary III has been underway since then. Primary III is dividing into five Major waves. The first Major wave bull market is currently in its late stages. Major wave 1 has divided into five Intermediate waves. Int. waves i and ii completed in the spring of 2016. Int. iii then subdivided into five Minor waves. 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, completing Int. iii, took 10 months to unfold and completed in January. Since then a complex Int. iv has been underway. When it concludes Int. v should take the SPX to new highs.

MEDIUM TERM: downtrend probably underway

Last weekend, with the SPX at 2718, we expected the market to continue to decline until it hit the 2656 or 2632 pivots. The market opened on Monday at SPX 2699, but then immediately rallied after that and ended the week 2% higher at 2760. No decline, and no downtrend conformation. The choppiness continues.

We  continue to carry the triangle scenario on the SPX daily chart. Should/when we do see an OEW downtrend confirmation, then we can be relatively certain wave e, of the triangle, is underway. Until then this market is still in an uptrend, and only about 1% from a higher high (SPX 2791). It has been that kind of market. Medium term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots.


Last weekend we posted this count on the hourly chart but spent little/no time discussing it. On Wednesday we noted that the SPX 2690’s were providing support, while the rallies had been topping at lower and lower levels: 2746, 2743, 2737. On Thursday the SPX hit 2738, before closing at 2737. Then on Friday, the market opened at SPX 2738 and rallied all the way to 2764, before closing at 2760. Clearly the short term pattern changed over the past two days.

What this suggests, is that a continuation of the uptrend is back on the table if SPX 2791 is exceeded. Other than that we are still expecting lower lows (SPX 2692) this month. Short term support is at the 2731 pivot and the SPX 2690’s, with resistance at the 2780 and 2798 pivots. Short term momentum ended the week extremely overbought. Best to your trading!


The Asian markets were mostly lower and lost 1.3%.

The European markets were mostly higher and gained 1.0%.

The DJ World index gained 0.9%, and the NYSE gained 1.3%.


Bonds are uptrending and gained 0.2% on the week.

Crude continues to uptrend but lost 0.5% on the week.

Gold continues to downtrend but gained 0.1% on the week.

The USD remains in an uptrend but lost 0.1%% on the week.


Monday: consumer credit at 3pm. Wednesday: the PPI and wholesale inventories. Thursday: the CPI, weekly jobless claims, and the budget deficit. Friday: export/import prices and consumer sentiment.

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

About tony caldaro

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602 Responses to Weekend update

  1. E says:

    I think we just witnessed a 5-3-5 4th wave correction between last night and today. The rally should resume tomorrow and exceed 2800 in the coming days.

  2. aahmichael says:

    My response to a few comments I read today:
    1.) Someone said that markets have evolved, and therefore backtesting doesn’t work anymore.

    I couldn’t disagree more. At least speaking for SPX, I don’t see one iota of change in the last 70 years that I’ve backtested. Of course, it all depends on what you’re backtesting. Garbage in will give you garbage out. However, if you backtest sound patterns and trading rules, everything that worked before continues to work exactly the same. In addition, EW is the measure of human behavior, and that certainly has never changed, otherwise, EW would have stopped working long ago.

    2.) Speaking of EW, someone posted that what you read in EW books doesn’t apply to the reality of the actual market.

    Once again, I couldn’t disagree more. People who think that the rules of EW that are found in Prechter’s book and/or Neely’s book are meaningless, are the same people who post charts that consistently violate one EW rule after another. They post invalid counts. I have never seen a count that violated EW rules that turned out to be the path that the market ultimately followed. At some point, every one of those kinds of counts gets tossed into the trashbin.

  3. emuntrader says:

    Using RSI to determine trend. One of my lagging indicators, but the read still says “sideways to downward movement”

    • CampFreddie says:

      “sideways to downward movement” ??? … call me old fashioned, but your chart clearly shows higher highs and higher lows and that is an uptrend , is it not ?

  4. emuntrader says:

    Yesterday, I preferred upward impulsing, after the futures and downtrend today. I think the triangle is 50/50. if we breakdown tomorrow morning. It would appear we are impulsing in a downward direction. Demark still signaling exhaustion levels.

  5. alexh110 says:

    Think the market’s probably entered a choppy downtrend now for the next week or so. Should be fun for day trading!

    • extremely tough call here.
      over 2780 bullish under 2767 bearish. was im hoping last 30 minutes break 2767 IDK

      • Ashley says:

        Covered at 2776 making the last two days of trading a total waste time and maybe netted a little LOL But I’ll sleep well tonight anyway, GLTA

      • alexh110 says:

        Hourly momentum on the Dow hit a medium term resistance level just before today’s decline: so I think it will play out something like the chart attached below (and something similar for SPX).

        • Ashley says:

          And of course the bearish close but Im spooked, held that 2774 short for 2 days and got close to even, don’t trust the overnight “news” with all thats going on and no doubt PPT has a watchful eye and a FAT wallet should the need arise (or if they think they have enough shorts to BBQ going into the end of the week and “earnings”….

  6. fxaprendiz says:

    Guys, it’s really easy: stop feeding the political troll.
    I tried to engage him/her a week ago, trying to make him understand this is not the place for political rants. He replied with another long rant not related at all to what I had said to him. It was then I saw he’s just a troll, and trolls thrive with attention, no matter if it’s negative or positive feedback, for they are craving the attention no matter what kind.
    I then told him I would stop reading his posts and have actually just done that since then. I simply skim over his posts whenever I see his a avatar.
    But now I’m seeing many of you are getting distracted by him and engaging him. That will only make him stay for longer. There’s only 2 solutions. Kick him out or stop feeding the troll. Tony apparently doesn’t want to do the first, so it’s up to you guys to ignore him.
    Now, before you say his political views are valid, I don’t care if they are or not, I’m not here for politics neither are you all.
    He may be a good trader or even a great one, only he knows that as I told him, but that’s not the point, the point is that his posts do nothing to help you trade.
    And Vivelamo is right that Leibowitz needs help. He slipped once and mentioned he has OCD, so if you try to reason with him and persuade him to stop he won’t do it, his compulsive posting is pathological so he can’t help it. I’m sorry for the guy but he needs medical help and we won’t give it to him here.
    Just ignore him and he will slowly fade away without your feedback. Pity him if you want to but stop feeding him or you’ll endure him for months on end until Tony bans him again.

    • H D says:

      TBH, It’s an interesting conversation. Interesting enough for Tony to comment on his POV in the weekend update. For once gary was actually on topic.

      We the people, USA, owe China $1.5T if you think there is a clear winner or loser now-IMO the real negotiating hasn’t even begun. Oh well. It’s just a blog and just 1 topic. Let’s revisit in a few weeks, months.

  7. H D says:

    I would also point out this is one of the rare times OEW can not quantify whether the SPX is impulsing 1-2 or in a corrective triangle? Very rare. It’s either choppy or not usually.
    Interpret as you see fit.

  8. kvilia says:

    Is this leg down on CL going to continue? I got it wrong this morning…

  9. 1:35 moving window plus or minus 15 minutes is approaching. Move it higher and then dump it into the close would be my guess

  10. England make it to world cup final. Ftse rallies 100 points. You heard it here first.

  11. Anne Day says:

    Is this stock market being manipulated with a heavy hand?

    I just have to bring up this point. I feel that the administration is actively trying hard to keep the market moving up STEADILY. When the market is getting a bit too hot, they throw a piece of negative news at it (e.g., yesterday). When it is too choppy or something, they throw a positive one (e.g., the zero tariff stuff). Basically, all I can see is that they are trying to manipulate the market in a way so that they can take maximal credit when the election comes.

    • Anne Day says:

      This reminds me of Bernie Madoff’s return curve: always going up steadily. Anyone checks the volatility of his curve could readily see a huge anomaly.

    • mcgcapital says:

      They can’t manipulate a $20 trillion market, otherwise bear markets would never happen. It won’t hang around up here, we either break 2800 or reject it and go right back down

      • learnedmylesson25 says:

        When is the last bear we had?10 years ago.They’ve learned a lot.Countries (Japan,China)buy their own stocks!ECB has a multi billion dollar fund to move markets.All they need to do is let the traders know a certain level will not be allowed to be breached–like the old currency days–it’s called intervention.They create money out of thin air to pull this off.Brexit and Trump’s election were two huge examples.International events like trade wars gets them involved in some way–either dollar buying,SPX futures,whatever it takes.Since 2008,the big boys like Chase,Wells,Merrill all are complicit.In Europe,the banks do whatever the ECB wants.

        • fxaprendiz says:

          learnedmy, I think both you and mcg are actually right.
          The market DOES get manipulated, only not to the degree one might think is possible. In the very short term, an open manipulation like jawbowning or releasing some news at a particular time, throws day-trading off. In the medium term, covert manipulation like buying/selling bonds/stocks/currencies by CBs and goverments can move the markets by longer time and bigger swings.
          With all that said, the market is indeed too big to be permanently and actively managed ala illuminati style. In regarding to EW, said manipulation can stall a progression or cause a short term counter-trend move, or accelerate an ongoing trend already on its way if the manipulation was on the same direction. In the medium and long term though, EW always wins the battle as they, the manipulators, don’t have (yet) enough weigh to overthrow the whole market.
          I used to trade forex so I regularly saw the prints of manipulation especially in the USD/JPY and EUR/USD pairs, but the market would go back to its regular trading within hours, because it’s a much bigger market than stocks.
          I see stock markets as easier to manipulate precisely because they are in a smaller scale compared to forex, so the intervention effects are bigger and last longer, but eventually stocks go back to their trend they had before it. Anyway, one more reason I don’t day-trade or pay much attention to news.
          Trade the medium and long term swings and waves and you can forget about manipulations, interventions and real/fake news.
          Just my 2 cents

    • jobjas says:

      Used to think like that once , then realized it was lame excuse for not being able to read price chart !

      • jobjas says:

        That was about market manipulation

        • learnedmylesson25 says:

          I’ve seen enough of your predictions go wrong to make a comment about YOUR chart reading–which I’ll skip..To dismiss my view of market manipulation is naive.There’s a lot of corruption out there–some gets uncovered–most doesn’t.The government is not immune to corruption (understatement)”for the good of the system”.Good luck on your chart reading.

      • Anne Day says:

        I tend to do a lot of back testing.

        My main concern is that the market evolves. What held in past may not be holding now (in a manipulated market).

  12. learnedmylesson25 says:

    …and just like that,GDX breaks the 10 and 20 d.Feeble.

    • Ashley says:

      “King Dollar”, might go looking for some Silver/Gold soon if I can find anyone selling physical…. I hate GDX, one of my biggets mistakes was getting trapped in it and becoming and “investor” =(

      • learnedmylesson25 says:

        The +div took GDX to the upper bb,where it collapsed,instead of continuing up(which would’ve been bullish).That’s it for that trade.

  13. jobjas says:

    SPX and CL on its way down

  14. I apologize for the head of criminal division of DOJ being confirmed. His nomination is still on the senate floor. So obviously until he gets confirmed there will be no firing of Rosenstein. Countdown will start the day he does get confirmed. now that is a big deal, bigger than anything we have seen so far. Since a good many Senators and congressman know a lot more about what Mueller knows I will assume trump knows as much also. if my assumptions are correct trump and the GOP have nothing to lose by firing Rosenstein and stopping the investigation. I am sure this is the intent of current confirmation hearings. The GOP gave up their soul with Moore. They are all in.

    I would look at this one event as the catalyst for a crash.

    • jobjas says:

      just a thought ….really wonder why Tony would allow his platform to be used to vent out political hate for so long

      • Do you think the firing will be met with a complacent market again? I bring possible events that could devastate the world markets and you see this as a Democrat verses Republican issue? if the truth hurts so much ignore it, most have. How did the reunited 5 year old’s go? not so well? Shocking. If you can’t take criticism of FACTS you should ask yourself why you allow those facts in the first place. We are in an historic event that rivals, or equals, anything seen since we became a nation. Most never see the devastation in real time. Only after events are people aware. No amount of divisive or distorted counter arguments can mask the truth. It’s there for all to see if they have their eyes open. How many wanted 3,000 children to be permanently separated from their mothers just because they want a better life for them? if you don’t want to hear it then make it go away. Have I presented a false argument? Surely words written on a blog can’t harm you in any way or take away your ability to listen to PHIL. if we block all that we don’t want to hear we prefer biased information to guide our investments. I commend Tony for allowing my voice. If he deems it harmful to his blog he will dismiss me.

        I still see a minimum of 11 days on this uptrend till possible trouble. This is day 9.

      • vivelaamo says:

        I’m amazed he has allowed it for so long too. Some of the stuff this guy posts is beyond belief.

        He needs help. We must offer it to him. It’s the humane thing to do.

        • micky says:

          He’s making it very unpleasant over here.

        • aahmichael says:

          How about just ignore the posts and posters that you don’t like to read? No one is forcing you to read and reply to any post.

          • vivelaamo says:

            I can’t help reading his posts even though it makes my blood boil. Maybe I’m hoping he will change his view. He is a troll and I’ve taken the bait. 😂

            • fionamargaret says:

              Vive, there are trolls and trolls…at least he has content. (backgrounding is important and that is what he does).
              He is not seeking attention for himself every two minutes and really clogging the blog..
              I would like him to stay….we are not all the same…
              If there is a limit during the day, it should apply to all….

              • vivelaamo says:

                I would like to him to stop any Hitler comparisons and constant talk of children without parents. There’s other places for that discussion don’t you think? I don’t care about the number of posts it’s the hatred and constant digs at Tony that riles me. As I said. I wish I had Tony’s patience.

                You then have the likes of Aahmicheal telling me if I don’t like what he posts then not to read or respond to it. Yet he does the exact same thing to Phils market related posts every other day!!

              • fionamargaret says:

                …and while I am on my high horse (again), we have Tony giving his analysis on Wednesday and Saturday.
                Let the man have the floor…we are all students..in EW and in life.
                Perhaps he should have room on his blog for answering questions, without attention seekers pushing him aside.
                This is just politeness.

              • vivelaamo says:

                Emotional evening. Its not coming home and dosent deserve to be either.

                I know you don’t like Phil. That’s between you and him.

                But watch out for Gary’s subtle digs at Tony. Really hope you don’t condone it.

                Goodnight Fiona, god bless.

            • aahmichael says:

              vive, so you want someone banned because you don’t have the self discipline to not read his posts. Got it.

              • vivelaamo says:

                I don’t really care if he’s banned. I just want him to realise he shouldn’t be posting such vile hatred on a trading blog. Maybe a ban would do that. Similar to how you probably feel Phil should stop posting what you perceive as phantom trades. You see me questioning your posts?

              • aahmichael says:

                This is Tony’s blog. He sets the rules. We all have the right to ignore the posts that we don’t want to read. Try it. It works.

              • vivelaamo says:

                Have the courtesy to do the same in ignoring Phils posts before you shoot your mouth off.

              • aahmichael says:

                Like I said, I ignore the posts I chose to ignore, and reply to those I choose to reply to. I’ve never asked for anyone to be banned.

            • fionamargaret says:

              Vive, I don’t make considerations based on personal feelings.
              I do not dislike Phil…I just don’t like what he does, and don’t think his behaviour would be condoned elsewhere.

      • tommyboys says:

        Tony cut him once. He’s lost his mind.

    • Trump just TWEETED we are losing 151 Billion with EU trade and his dumb audience believe it! He got the amount right but the balance sheet is in OUR favor. And you think the market can anticipate trumps next move? ABSURD! Crash is near. When? One week, one month, three? Firing of Rosenstein will set up the crash.

  15. emuntrader says:

    Preferred short term count. finding more support at the 2767. 2774 is .886.

  16. emuntrader says:

    Sorry for the late post. Busy morning. Demark still calling the turnarounds.

  17. tony caldaro says:

    “they look only at profits without trying to understand just how trump can and will derail the economy”
    if the market even thought that was a possibility it would not be where it is now
    investor sentiment drives markets

    • 40 percent think Trump is a hero and giving the world the middle finger standing up for USA other 40 percent think he is literally pissing off the world. Probably why we have been in this range for 5 months. Other 20 percent dont know or dont care. Its what makes this a very difficult market in my opinion. investor sentiment can change fairly qickly with a few tweets good or bad. is what it is, tough market

      • schizo1688 says:

        how tough it can be ? the market is range bound..and the pattern is there

        • if market is so easy, due tell.does 2767 break and we going straight down in a C wave or are does that level hold and we going back up to 2800 level.

          Cause im not smart enough to know if the last up wave was an ABC or a 123 with 4 underway and 5 yet to come. Appreciate your crysat ball sharring with us all

    • Sorry but the acceptance of trump and his outrageous behavior is now the norm. Did they anticipate a world wide trade war? Breaking away from our allies? Anticipate the GOP supporting trumps actions? Assume the EU trade war is capped at these levels? no. It’s called complacency and a false understanding that heads of state are rational. We continue to excuse his actions by finding a narrative to justify it. That’s called a false sense of security. If markets were rational we would never have crashes or absurd exuberance. You place too much faith in a system that in the end is run by emotional mass investing. The 1930’s? Dot.com? The mortgage debacle? How was their anticipation of events that logically should have been seen before it crashed. No, markets are not rational at the extremes. we are in a fog about great profits going forward and nothing YET has derailed that thought.

      • well easy enough to know what 40 percent you and tony are on. LOL
        Is what it is man. Move adapt or die basic laws of science. As far as the market goes. time will tell. Sorry for all the post. bored, since i have no positions at the moment .

        Good luck all

      • mcgcapital says:

        Good post re historical precedents. We’re in a trading range.. just as likely to break 2500s as it is 2800, just because we’re near the top of the range doesn’t mean we’re breaking through it. Often markets make it back to the top of the trading ranges just before large moves down. See October 2007 marginal new high and July 2015 retest of the high as examples. Potential is definitely there for a big move down.. let’s see what happens if it starts making lower lows sub 2700, could become a very sharp break lower at that point. Alternatively above 2800 is bullish.. just adjust to what the market does

    • learnedmylesson25 says:

      The market has the vision of Mr Magoo imho.Many times they ignore circumstances until its right on them–then sell in a panic.At SOME point,a continued ramp up of tariffs would do some damage.When that happens is anyone’s guess.If this is all a “negotiating ploy”,which only the insiders know–then the market should ignore it.We “outsiders” don’t have the inside info to decide–and we never will.The only way we can analyze this, is going back to 2002–and what happened in a tariff war then–and how the market reacts now.One thing is for sure:It’s never too late for the big boys to sell their stock and catch the rest of us holding the bag.

      • Number crunching is easy. they can figure out the total amount of all goods being tariffed and decide the total loss in GDP. that’s the easy part. Realigning by nations and companies to lessen the pain is not known. Punitive measures, future loss of capital due to new trade agreements between other nations. How the dollar gets affected? How inflation gets affected? How permanent trust and trade agreements gets derailed? Most important is security thru cooperation. How willing are nations being attacked economically willing to help in a military action? in preventing one? Just look at North Korea, need I say more? No peace prize for trump.

    • H D says:

      Hi Tony, agree. the stock market loves deregulation & wild deficit spending for tax cuts,,, until reality catches up, aka 2007. Market loved that too. It’s coming. History rhymes.

      • Ashley says:

        Markets are still here because unlike the bonds they are pricing in the inflation we all live with thats criminally under reported with all the BS stats our gov publishes, reality is we will see more huge stagflation here and soon the “consumers” (debt slaves) will be tapped out as the debt crank stops turning…

        • H D says:

          I’m no economist and value Tony’s opinions on this. The market, and Tony, didn’t think it was possible in 2007 either.

          • vivelaamo says:

            A lot more technical detoriation of strength back then though before the drop don’t you think?

            I’m not saying it can’t and won’t happen again. But if 2007 is anything to go by there would be loads of cues to get the hell out.

            • mcgcapital says:

              If we hold the range for a few more months the 200dma will flatten and the moving averages will probably bunch around 2700. 50/50 which way that breaks into year end. If that happens then we can’t say we haven’t had warning as it would have spent the whole year being volatile and failing to break up. Above 2800 and the picture changes though, but can’t see it happening yet against this backdrop

            • H D says:

              Like I said vive, nobody, including Tony thought the market would fall in 2007. “technical deterioration?” Like 7 months of sideways chop. No way is this part of the same ’16-’17 wave.

              • vivelaamo says:

                Still above the 200 dma and made a higher low at every pb since Feb drop. Starts trading below or makes new lows and I’m outa here.

              • H D says:

                :mrgreen: I’m sure everyone will trade it perfectly. No doubt there. I am more interested in the macro argument Tony is suggesting. “no possibility” comment that we have a similar environment that could start major 2.

          • Ashley says:

            I “retired” at 39 in July 2008, cashed in the company stock after 20 years and went into a money market paying more than 5%, didn’t know shit from shinola about markets but I knew we were done…. Bought a bunch of bonds and I started buying SPX on the downside at around 800 and rode out the 666…. Started selling out in 2014 and RAN fast from the communist state of Illannoy to the great state of South Dakota where land and real estate was cheap, payed cash…. Im much more of an investor than a trader, problem is there is no more value anywhere I see so for now so Cash is King ATM and you still get robbed…..

      • tony caldaro says:

        Need a reason for Major wave 2

  18. Bill Manscoe says:

    Thanks for the info guys. It does seem that the unelected powers to be are a problem world wide. Maybe the shadow elite do rule the world.

  19. Pretty obvious the market doesn’t see much collateral damage to profits down the line no matter what China’s response is. Short sighted but that’s been the theme so far. I believe this is day 9 of uptrend. I assume they have also considered the EU, Canada, Mexico situation as well. Not many companies announcing forward looking problems with streets earnings assumptions.

    I wonder what it would take to stop pretending we don’t have an unhinged president willing to take everyone down with him. I guess that comes later. Will the street shrug off a constitutional crisis when he fires Rosenstein and stops cold the Mueller report? Seems possible given the last 6 months of market behavior. they look only at profits without trying to understand just how trump can and will derail the economy.

    It also seems short sighted to dismiss our break from G-7, NATO, Canada and Mexico. No economic impact from all this? We shall see. Me, I still give the market room to rise from here given the extremely shallow response to the 200 Billion additional tariffs.

    Happy Days are here again! This is setting itself up for a crash and one that will most likely surpass the start of the drop in January. Till then play the daily EW counts.

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