Weekend update


The week started at SPX 2767. After a lower open on Monday and a trade down to SPX 2749. The market gapped up on Tuesday, and then hit SPX 2817 midday Wednesday. A gap down opening on Thursday took the SPX down to 2755, where it was trading on Monday. Then a gap up opening on Friday rallied the SPX to 2798 early morning, which was sold off for the rest of the day. For the week the SPX/DOW gained 0.20%, and the NDX/NAZ lost 0.65%. Economic reports for the week were mostly positive. On the downtick: housing starts, building permits, existing home sales, and the Philly FED. On the uptick: leading indicators, the NAHB, industrial production, retail sales, the NY FED, business inventories, plus jobless claims and the federal budget improved. Next week’s reports will be highlighted by the beige book and Q3 GDP. Best to your week!

LONG TERM: downtrend probably underway

Despite a volatile week not much has changed from last weekend’s report. The market traded above last week’s SPX 2711 low, and well below the SPX 2941 all-time high. The range for the week was SPX: 2749-2817. And the SPX gained 1 point for the week.

The SPX weekly chart displays the Major wave 1 bull market count from February 2016 to October 2018. Notice the five wave rise from the Primary II bear market low at SPX 1810, to the Major wave 1 high at SPX 2941. Five Intermediate waves, with five Minor waves creating a subdividing Intermediate wave iii. Intermediate ii was an irregular zigzag, and Intermediate iv was a flat. Minor 2 was complex and Minor 4 was simple. Alternation on every level. Same can be said for the DOW, NDX and NAZ chart patterns. They all mimicked each other, while at times not completely in sync.

MEDIUM TERM: downtrend

While the last uptrend left a lot to be desired as for impulsivity. It was still tracked as Intermediate wave v, and expected to be the last uptrend of the bull market. We had noted months ago. If the uptrend surged it could pass SPX 3000 easily. If the uptrend struggled and took lots of time it would probably make only marginal new highs. The uptrend took six months, and exceeded the previous all-time high by only 2.4%. The DOW only exceeded its high by 1.2%.

Thus far the market has dropped from SPX 2941 to SPX 2711. We had thought that could be an important low, and so far it is holding as such. We labeled that low Minute wave A in dark green on the charts. The rally that followed has thus far risen to SPX 2817 for nearly a 50% retracement. We have labeled that with a tentative light green Minute B. So far the decline is moving along generally as expected.


With Minute A SPX 2941-2711 (230 points), and Minute B reaching SPX 2817 (106 points), we would now expect Minute C to decline either 0.618 Minute A (2675), or 1.0 Minute A (2587). There are pivots at 2656, 2632 and 2594. Once the market does hit one of those lows it should end this Minor wave A downtrend. Then we would expect a Minor B uptrend retracing 50% to 61.8% of the entire decline. After that we probably won’t be seeing those levels again for some time as the bear market begins to make itself more widely known. If things really get carried away. Which is possible considering the multiples. The FED will be forced to intervene: MM4ME.

Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Short term momentum ended the week just above oversold. Best to your trading! It’s a day traders market.


Asian markets were mostly lower for the week for a net loss of 0.7%.

European markets were mixed and gained 0.3%.

The DJ World index lost 0.1%, and the NYSE gained 0.1%.


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

Crude appears to be in a downtrend and lost 3.7% on the week.

Gold remains in an uptrend and gained 0.6%.

The USD is also in an uptrend and gained 0.8%.


Wednesday: new homes sales and the Beige book. Thursday: weekly jobless claims, durable goods, and pending home sales. Friday: Q3 GDP and consumer sentiment.

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


About tony caldaro

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625 Responses to Weekend update

  1. llerias7 says:

    Positive divergences seen in 5 min chart:…https://snag.gy/IrMx4N.jpg


  2. Page says:

    This is the capitulation.


  3. I sold all my Puts. Made another 50K. That’s 100K in two days. I am NOT confident that we continue the slide tomorrow. I also didn’t see any panic just a continuous slide.

    I am still expecting a nice 3 to 5 day rally but not sure if it starts tomorrow. I will be inclined to buy CALLS if the market seems to agree with me.


    • Mike Corrada says:

      Excellent trades and patience Gary


      • I sold too early. Didn’t see the last 20 minutes as capitulation mode. It was and I think we found the bottom. I’ll take the gains. I think regardless of how the market opens tomorrow by the end if that day it will be in positive territory. I am also guessing that 2780 is the next target to reach for. If we see no relief from downside pressure tomorrow I throw away my assumptions.


        • fionamargaret says:

          If you notice my posting below, numbers are pre-emptive (before a situation)….check the timing of my posting below, and what happened after…..


  4. Lee x says:

    Hey it hit a pivot


  5. Peter Sliney says:

    I’m pretty sure Mark Cuban will be blaming the speed traders for this.


  6. Tony C. If you see this post before you write your Wednesday update, I wonder if you would comment on the possibility that your green minute labels being 1 degree larger. Where you have minute wave “a’ could that be minor wave “a”. Green minute wave “b” actually minor wave “b”.
    My rational for asking this question is:

    1. the initial leg down is pretty significant.
    2. If you are looking at 2500 or so for the print low…the SPX is more half way there are we still have minor, and intermediate degree corrective waves o complete.
    3. Finally I think it was lunker1 that posted your 2011 daily chart of SPX…minor 1 declining into minor wave 2. That correction was about 95 points, 7% and took about 1 month to complete.

    I know historically wave 2 usually corrects 50% – 61.8% of wave 1 but 2011, was much less significant. Could it have been a huge bear market from 2007-2007 that distorted the charts?…or Bernache’s QE programs? If I understand you correctly you are expecting a <50% correction for minor wave 2.

    Not trying to pin you down, just trying to understand your rational for your call. I want to scale back into this market at some time in the future for a long term trade. Been waiting for this time, for a long time.
    Would appreciate any additional color to your analysis (excuse the pun on words)…thank you.


    • tony caldaro says:

      Have been considering that possibility too.
      My initial thought is that this bear would take about 6 months to unfold in a double three pattern. It may not have to take that look and it may be a much simpler pattern.
      There appears to be many heading for the exits in the last two days.
      Something to keep in mind, and will mention it this weekend.


  7. stan911 says:

    My sequence 2670-2755-2619(07)-2814-2505 to 2484


  8. kvilia says:

    Tony’s pivot 2675 is in play (+- 7 points). Let’s see.


  9. kvilia says:

    Phil, CL tanked again.


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