Weekend update


The FED turns dovish and the market rallies. The week started off at SPX 2633. After a gap up opening on Monday the market rallied to SPX 2674. Tuesday had a gap down opening to SPX 2656, but the market reversed and rallied to 2683 by the close. Wednesday had another gap up opening as the market surged to SPX 2744. Thursday another gap down opening, this time to SPX 2723. But the market rallied to SPX 2754 before pulling back into the close. Friday had a quiet open, but rallied to SPX 2761 just before the close. For the week the SPX/DOW gained 5.05%, and the NDX/NAZ gained 6.05%. Economic reports for the week were mixed. On the downtick: Case Shiller, consumer confidence, new/pending home sales, plus weekly jobless claims rose. On the uptick: personal income/spending, the CPI, and the Chicago PMI. Next week’s reports will be highlighted by the Beige book, the payrolls report, and the ISMs. Best to your week!

LONG TERM: downtrend probable

The strong FED induced rally now has a number US indices in confirmed uptrends: TRAN, SOX, R2K, NYSE, HGX, XLB, XLF, XLI, XLP, XLV, and XLU. It might have also contributed to confirmed uptrends in the following foreign indices: Brazil, Canada, China, Hong Kong, India, Japan, Singapore, S. Korea, Spain, and Switzerland. This would suggest that Intermediate wave B is finally underway in the big four US indices. This weeks WROC signal, which sometimes occurs prior to uptrend confirmations, suggests the same. Meanwhile the ECRI continues to slip.

Our long term view remains unchanged. Primary wave I ended in 2015, and Primary wave II ended in 2016. After that Primary wave III was underway. The bull market from 2016-2018 was Major wave 1, of Primary III, and a bear market Major wave 2 should be underway now. Thus far the growth sector has taken the brunt of the selling, down 16% at the low. While the SPX was down 11.5% at its low. Once this potential uptrend concludes the market should decline in an Intermediate wave C to end the bear market.

MEDIUM TERM: uptrend potentially underway

With this weeks strong rally and WROC signal there is a good chance the Int. B uptrend is underway from last Friday’s low. So far we have one wave up and we would expect three, or something more complicated, before the uptrend ends. A normal retracement of Int. A would put the SPX right back around the 2815 area.

B wave retracements, in recent years, have been stronger than normal. This would suggest possibly the 2858 or 2884 pivots. For now let’s take it one pivot at a time. After Int. wave B concludes, Int. wave C should take the market to new lows for the bear market before it ends.


The one wave noted above, on a much shorter term basis, is actually nine waves up, and looks impulsive: 2672-2653-2754 (2674-2656-2744-2723-2754)-2733-2761. The waves within the parenthesis are the subdivisions of the third wave. All of the pullbacks during this rally have only been about 20 points.

With five waves up, a negative divergence on the hourly chart, and overbought on the daily chart, it’s possible for a bigger pullback early next week. Short term support is at the 2731 and 2656 pivots, with resistance at the 2780 and 2798 pivots. Best to your trading!


Asian markets were nearly all higher on the week for a gain of 1.7%.

European markets were all higher and gained 2.1%.

The DJ World index gained 3.2%, and the NYSE gained 3.5%.


Bonds continue to uptrend and gained 0.3%.

Crude remains in a downtrend but gained 1.0%.

Gold remains in a choppy uptrend and lost 0.3%.

The USD is still in an uptrend but lost 0.1%.


Monday: ISM and constructions pending at 10am. Tuesday: auto sales. Wednesday: ADP, ISM services, and the Beige book. Thursday: weekly jobless claims, the trade deficit, and factory orders. Friday: monthly payrolls, consumer sentiment, consumer credit, and wholesale inventories.

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

About tony caldaro

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439 Responses to Weekend update

  1. travis01 says:

    Thatโ€™s it…Iโ€™m going pro and starting a Twitter handle!๐Ÿ˜†. Lunker, dead on call at 2708 sir. Nice


  2. aahmichael says:

    Days like today only happen in bear markets:


  3. stan911 says:

    stan911 on December 3, 2018 at 10:18 pm
    I have this as int A at 2603 a of int B 2817 b of int B 2625 now weโ€™re in c of int B so we could go to at least 2684-(2702-11-20)and then upto 2880-2898


  4. CampFreddie says:

    ….. Just shakin’ the trees.


    • phil1247 says:

      agree freddie
      2697 es is stopping my shorts from getting to 87 target
      i cant hold them over 2 days
      so token shorts only for me on thur am

      love to hate chart for spx
      still bullish ………….
      till it isnt ๐Ÿ™‚

      already shorted bonds
      take a look freddie will show chart tomorrow
      much more technical

      Liked by 1 person

    • kvilia says:

      Well, I hate to hold over two nights myself. Bought before the closing in anticipation of a bounce but 6.18% line did not produce one, so down a couple of hundreds. Will have to close AH ๐Ÿ˜ฆ


  5. searchme2017 says:

    Minor b of Intermediate B has bottomed (DOW 25,2021.00). Minor c of Intermediate B in progress to above 26,000.00.

    S&P looks similar….2702.00 should be it!


  6. fxaprendiz says:

    Just came back from day job…
    Wave 4 of a scratched. One day wonder, wave b of c of B done in a day an a half. 0.618 held as it should. SPX still going with the program, and yes still going up in a wave c of c of B, to the 2870-2900 area.
    Perusing quickly through some posts it seems like emotions are running high again, so I better not comment more as to not add fuel to the fire. Always use SL folks. Mine is still miles away down ๐Ÿ˜‰


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