Weekend update

REVIEW

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.

SHORT TERM

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!

FOREIGN MARKETS

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%.

COMMODITIES

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%.

NEXT WEEK

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

Investor
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439 Responses to Weekend update

  1. travis01 says:

    That’s it…I’m going pro and starting a Twitter handle!😆. 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 we’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 🙂

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

    • 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 😦

  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 😉

  7. Page says:

    Can DOW close today b/w 700-800, SPX b/w 80-100 and Nasdaq b/w 250-300? YES!!!

  8. Billy says:

    ES and YM hesitated at the 50% retrace before breaking through to test the 61.8% which has held. Tech futures held the 50. Although very sharp and swift today’s drop in terms of length fits nicely for b of B. Risk/reward now leans to the long side for positioning for Minor C of Int. B IMHO.

  9. mcgcapital says:

    I thought the ‘pain trade’ was up lol. Let’s see if 2700 holds and we bounce around. Would be pretty epic if this goes to fresh lows in one go

  10. quickrick38 says:

    OK lunker, I’m posting a count now…the SAME count that I posted a couple weeks ago. You see, I just don’t get it. Even as late as this morning half the posters on this board were calling for the market to continue UP…UP! UP??? How can the market go up when we just completed the 5 wave ‘C’ wave that finishes off the larger ‘abc’ big ‘B’ wave?
    To be sure, I’m speaking for myself but there are several other people who “used to” post their counts regularly – and just like me, got criticized like there is no tomorrow. I don’t mean constructive criticism – I’m talking bashing and ridiculing.

    So here is my wave count:

    And yes, it’s the same count that I posted a couple of weeks ago. Note well that since this is after the fact, no one can argue that the forecast wasn’t a good one. My previous count:

    Now, what I don’t get is how so many on this site keep talking about crazy things – at least things that make little sense to me. The bashers say things like; I can see a contracting triangle. That’s down right funny. Then there is the talk about pivots and anchors and bollinger bands and counting the days for candlesticks up and down. And, of course there’s lots more. The worst, of course, are those who tell us what direction the market is going to go based on politics. That is absolutely hilarious. No offense but that really is ridiculous. Surely, some of you are getting killed in the market.

    LOOK at the count folks. The waves are elegantly simple. My grandson could count these waves. And yet many of you thought the market would go up AFTER we completed a 5 wave ‘c’ wave finishing off the ‘abc’ big ‘B’ wave!!! Oh, but we’re going back up to 2796 and we’re going to 2853 and…so on and so on. Where do you people come up with this stuff????
    As of this posting the market is already down almost a hundred points ES from the end of the big ‘B’ wave. What does it take for you folks to get the picture. This IS after all, an Elliott Wave site.

    I sincerely hope that not too many of you lost your ‘you know what’. As for the bashers…I’ll leave my thoughts to your imagination.

    • dad1 says:

      QR, the chart is helpful. Care to project the #s for B and C to end at?

      • dad1 says:

        My mistake, meant A and C of C

        • quickrick38 says:

          No problem. If this turns out to be an ‘abc’ ‘C’ wave…then if ‘C’ = ‘A’ (the smallest drop) then ‘C’ would end at 2469. Definitely some likelyhood that we go lower.

      • quickrick38 says:

        Dad, the ‘B’ wave is already done. The big ‘C’ wave is a long way down…I haven’t even looked at the fibs for that yet. However, just looking at the scale of the current drop, it is likely that this will be 5 waves down where we are yet to finish wave 1 down. Wave 2 pullback will be the shorting opportunity of a lifetime. Good luck

        • travis01 says:

          QR, wave 2 pullback (up) in progress now? Not sure I follow. If so, potential targets? I’d be looking at 2731 but welcome thoughts.

          • quickrick38 says:

            Travis, while an ‘abc’ down for the ‘A’ wave [IF…IF that’s what we get] ‘A could be complete. HOWEVER, I’m looking for a 5 wave wave 1 wherein we’ve only finished wave 3 of 5, would then be in wave 4 of 5 with wave 5 of 1 down still to go. I’m not sure why you both of you are looking for an ‘abc’ ‘C’ wave…most of these big ‘C’ waves down are 5 waves. Just like the ‘c’ of ‘B’ was 5 waves. good luck.

    • ewmarkets says:

      The only thing is, a B wave shouldn’t have 5 waves. A zigzag a-b-c however can have 5 waves for a. If that’s the case, we’re in b for B and there is still c of B to come.

      • quickrick38 says:

        Agreed…’b’ waves are not 5 wave structures. But within a ‘B’ wave, wave ‘a’ and wave ‘c’ can be either 3 waves or 5 waves. Wave ‘c’ is more often 5 waves. I have no idea how you can assume we are in ‘b’ wave. Granted, if we just saw an ‘abc’ A wave and assume it completed, then we could be in a ‘b’ wave. But that’s a lot of assuming. Good luck.

  11. frequent lurker and fan of content. Seems like the projected downturn to be as shallow as its currently forecasted on this blog seems to be out of place. Looking at the long-term charts average downturns lasts 2.25-3 years to find a bottom. If we count the top development at beginning of 2018 that would put us in 2020-2021 to find a bottom. Of the 2.25 to 3 years pattern, I noticed that the first year is flat and year 2 and into 3 have the 90% of the action(decline). Don’t know what price will be the bottom but I think it might be best to close up shop for 2019 and invent back in the market second half of 2020 and into 2021.

  12. travis01 says:

    Gonna park it at 2731 or 2700 for the Wed off day…

  13. lunker1 says:

    Dec ES .50 short 2794.5
    anchors 2814 to 2773.5

    1.272 target 2762.5
    1.618 target 2748.5
    2.00 target 2733

    added
    2.62 target 2708

  14. Page says:

    WOW…… Good luck if you are long, it will only get UGLY.

  15. fotis2 says:

    .618Special easy peasy short entry looks like its gonna 3BR on daily more downside on the cards

  16. retiree247 says:

    Tony’s short term support pivot @ 2731 has been hit.
    Next stop @ 2656?
    Would not surprise me at all.
    GL all.

  17. lunker1 says:

    SPX
    50% 2716
    62% 2700

    ES
    2720
    2698

  18. Harp Man says:

    FWIW, The $SPX 1 hour and 2 hour Murrey Math auto setting says support at 2725-35 area

  19. travis01 says:

    I wanna day it…PIVOT!😉

  20. Lee x says:

    Tony updated his 60 min SPX

    GL folks

  21. tommyboys says:

    ….AND – gap filled 👊🏼

  22. Lee x says:

    The good ole internet

  23. lml25 says:

    Note to Lunker:Here’s your example of sniffing the upper bollinger band and reversing 40 points in a half hour.
    Note to Phil:Above 2782, bear.
    GL all.

  24. Noah J says:

    Going long 2735

  25. travis01 says:

    Lotta flying up north today and tomorrow. Don’t see much under 2660s. What you see?

  26. phil1247 says:

    last one

    64 es target is gap closure
    bonds got within 7 ticks of target .
    . you know my motto

    see ya thursday !

  27. fionamargaret says:

    TNA….long to 86
    DWT….short oil…up to 24
    Stops

  28. hugh jazole says:

    Still not seeing a recession?

  29. gary61b says:

    ES, could easily return to 2796 and take out the attractions and still be well within 2796.25 breach level. https://gyazo.com/278431d9313e8f46adda250456bb741c

  30. cj32 says:

    Cr. to CBZ

    • travis01 says:

      I follow CB. Saw this yesterday. Literally took the quote from another guy an hour before. Sometimes I think he borrows a lot of his tweets on the market.

      • mcgcapital says:

        Lol clearly everyone following that Steve Burns.. if there was an award for the most irritating guy on Twitter he would win by some distance

        • travis01 says:

          I read sev guys on Twitter when bored on the road traveling. Most just looking for recognition but some are decent. Don’t trade off any though.

          • mcgcapital says:

            It’s not his trading advice that gets me, that’s fairly sound risk wise but there are better ones on there. It’s the constant pushing of a lifestyle to get newbies to buy his books etc. And he’s always portraying trading as the only vocation worth doing which isn’t true at all.. according to him if it doesn’t pay money for little effort you’re doing it wrong. Education not worth it, working hard not worth it, being a part of normal society etc. Imagine if all anyone did was trade and nothing else.. that’s what he pushes

  31. Billy says:

    The rally from ES 2626 to yesterday’s high occupied 19 x 8 hr candles. I have that rally as Minor a of Int. B completed. Starting at yesterday’s high we should be in b of B. b of B has so far occupied only 4 x 8 hr candles. From a time perspective this is a lopsided relationship and strongly hints IMO that b of B is incomplete and still a job in progress that will deliver lower lows this week before attempting to take out yesterday’s high.

  32. aahmichael says:

    Last week I mentioned that I saw the potential for a contracting triangle from the 10/29 low, and while that still remains valid, given the length of the rally from 2631, then abc/wxy are equally probable. Either way, the key is that it’s a corrective wave from the 10/29 low, and Sunday night’s lemmings’ rush to buy the news provided a gift to short the .618 and 20wma at 2812. From the 10/29 low, we have 8 days up, 8 days down, and 8 days up.

  33. phil1247 says:

    CL

    within pennies of 18 d sma target of 54.68
    and DH target shown to you yesterday

    time to take some money off the table

    BONDS
    still screaming
    outside the upper bollinger band and -618 target
    continue to take profits

  34. phil1247 says:

    es
    straight up above 2782

  35. Well, looks like we may get that island reversal on Tuesday….bearish. As a follow up to yesterday’s post, /ES broke the long last night…a trend change. But it has to be confirmed….. /ES “should have a counter trend rally” up the 50% SHORT at 2790, the yellow line. The gap, dotted red line is sitting right on top of the 50% short level as well. That combination increases the probability that the gap will be filled and decline off that level. Finally, if /ES opens > (-)10 points the gap does not have to fill. If /ES rallies above 2796.50 this analysis is invalidated.

    Bottom line….. /ES 2796.14 Bullish above and bearish below.

  36. torehund says:

    The first wave of rioteering actually started a few years back in France when farmers lit up due to lower agri margins. It didnt make matters better when they all of a sudden could not export to Russia. The downwards spiral just continues as fuel costs are now out of proportion. Whats next, cooling that rip them off of any products to sell. Well, bad harvesting will rise the price by limiting suppleres but not help farmers in France. Why not just leave and start planting bananas in Kongo 🤗

  37. fotis2 says:

    As per last weeks post CL slowly grinding up to Target.Gold Bullflag looking nice a matter of breaking that wee bit R of 26/10 and off we go

  38. 2 Early, to say Merry Xmass TC ? Also, wish to thank, all the folks who post
    to OEW site. I appreciate, all the investment comments. Well done…Looking forward to \
    2019 where I plan to back into the SPX trend/pattern. To all – have a great Xmass, and New Year.
    Bud.

  39. fxaprendiz says:

    I just closed my 2807 hedge short for a 37 points profit, releasing again my 2634 long position.
    This pullback may be all of wave 4 or only wave a, but it has already 3 waves and the overbought conditions are gone so I decided to give the wave 5 up a try before a second hedge short.
    Not sure what’s the most probable target area for wave 5 of a, but at a glance 2840 seems doable.

  40. lunker1 says:

    Dec ES .50 short 2794.5
    anchors 2814 to 2773.5

    1.272 target 2762.5
    1.618 target 2748.5
    2.00 target 2733

    anchors 2944.75 to 2603
    .618 was 2814 resistance
    .5 was 2774 failed support
    .382 2733.5 test support?

    • fionamargaret says:

      You might remember my girlfriend Brigitte played the Bb clarinet…yes a transposing instrument.
      My dad used to smile if I was orchestrating a piece to suit the different transposing instruments…visual math to me….but clever to him x

  41. gary61b says:

    ES, has numerous attraction levels above and one remaining below…https://gyazo.com/6d060e51a2301798c720de3cd4e2c0fb

  42. allen kimble says:

    Time is a problem here. In bear markets, the markets ONLY go up until the 10th or the 11th of December. We have four trading days left. After the 11th I expect a very swift and severe move down until the 17th. This is setting up for the collapse in Jan. Odds are high 2815 may serve as a brick wall for the markets. Did anybody see the Russell 2000 today? Sad indeed. This is the index that is signalling a huge decline in Jan(all domestic American companies). Prepare.

    One last thing, The excellent time to short after the artificially injected rally in week 17th will be around Christmas. This will be the last train before it leaves in Jan for the collapse.

    I have been right and will continue to be. Join me

  43. stan911 says:

    Tony in ABC can wave B go higher than the high of 2941 and still be classified as a ABC ?

    • fxaprendiz says:

      Not Tony but I can tell you that yes, it is allowed for wave B to go beyond the start of wave A in a flat, in which case it’s called an Expanded Flat. There’s no consensus amongst EW theorists about the maximum length of wave B beyond A, but the most typical measurements are between 0.05 and 0.382

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