Weekend update


The week started at SPX 2707. After a dip to SPX 2699 on Monday the market rallied to an uptrend high of SPX 2725. On Tuesday a quiet open led to another uptrend high at SPX 2739. After that the market started to pullback. After dipping to SPX 2724 on Wednesday, it declined to 2687 on Thursday, and 2682 on Friday. Then the market rallied to SPX 2708 in the afternoon. For the week the SPX/DOW gained 0.15%, and the NDX/NAZ gained 0.55%. On the economic front the sparse reports were mostly negative. On the downtick: factory orders, ISM services, and consumer credit. On the uptick: both the trade deficit and weekly jobless claims improved. Next weeks reports will be highlighted by the CPI/PPI, industrial production and retail sales. The ECRI continues to rebound after hit a low of -6.5% about a month ago.

LONG TERM: uptrend 80% probability

We have been tracking and commenting about the foreign markets for the past several months. This week most made new uptrend highs before getting caught up in the US pullback. The Nifty (India) joined BVSP (Brazil) in its third wave up from their 2018 low. They are obviously slightly ahead of the rest of the financial world having bottomed early.

In the US the long term count remains unchanged. Super cycle SC2 low March 2009. Primary I high May 2015, and Primary II low February 2016. Major wave 1 high October 2018, Major wave 2 low December 2018. Intermediate wave i of Major 3 should be underway now.

MEDIUM TERM: uptrend

We have also been tracking five criteria to determine if this uptrend is a B wave rally, with a retest of the December low to follow. Or, the December low ended the bear market and this uptrend is the first of a new bull market. The five criteria we have been tracking: length of rally, wave structure SPX/DOW, wave structure NDX/NAZ, the percentage gain of the advance, and the NYSE percentage level of stocks above their 200 dma. Over the past few weeks 4 of the 5 have turned positive. The reason we have a long-term 80% uptrend (bull market) probability.

We are still waiting on the SPX/DOW to quantify five waves up from the December low. We now have four waves and a possible fifth wave rally underway from Friday’s low. Should the market continue to rally, and make new uptrend highs, that would seal the deal. If the SPX instead drops below 2520 before making new uptrend highs, the uptrend would be considered a three wave zigzag, and a retest of the lows would eventually follow.


For the past few weeks we have been posting what we have called a squiggle chart. It displays all the quantified smaller waves of this uptrend. It ran into a little turbulence on Friday, and in its place we post a simplified hourly chart of the SPX. This represents our quantified short term count. A rally above SPX 2708 would be a positive.

With the three day decline into the end of the week SPX 2739 now looks like it ended Minute iii right in the OEW 2731 pivot range. We had reported on that pivot being a potential short term top on Wednesday. The Thursday/Friday decline has quantified as a Minute wave iv. Now all the market has to do is get back to SPX 2739 and we have a quantified impulse wave. We noted the importance of SPX 2520 in the previous section.

Short term support is at SPX 2682 and the 2656 pivot, with resistance at the 2731 and 2780 pivots. Short term momentum formed a positive divergence at today’s low then ended the day nearly overbought. Best to your trading!


Asian markets were mixed on the week and gained 0.2%.

European markets were mixed as well but lost 0.8%.

The DJ World index lost 0.5%, and the NYSE lost 0.3%.


Bonds remain in an uptrend and gained 0.4%.

Crude remains in an uptrend as well but lost 4.6%.

Gold is also in an uptrend but lost 0.3%.

Bitcoin is in a downtrend and lost 0.7%.

The USD may be back in an uptrend and gained 1.2%.


Wednesday: the CPI and budget deficit. Thursday: weekly jobless claims, retail sales, the PPI, and business inventories. Friday: industrial production, export/import prices, the NY FED, and business inventories.

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

Added the DJ Utilities to the Charts, and moved the VIX to the last page.

About tony caldaro

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671 Responses to Weekend update

  1. garstall says:

    Thanks Tony. Great update!


  2. Hi,thanks Tony

    wave from 2016 didn’t seem impulsive


    “could” retest 58/60 ST


  3. Jordi G says:

    Hi Tony, I’ve realized that if V=i, then the target zone is a very special zone….casuality?


  4. Cut, dry, and to the point. With specific numbers to look for. Thanks Tony for your excellent detailed analysis. Have a great weekend!


  5. cj32 says:

    Cr. to CBZ


  6. jobjas says:

    Thanks Tony.
    why wave 4 may not be over


  7. I like the adjustment you made in this update. It certainly does look like minute wave iv may have completed intraday yesterday and SPX is currently trading in minute wave v. I should underscore may because:

    1. minute wave iv is a bit shallow. A 23.6% or 38.1% pullback of minute wave 3 would call for additional decline to complete minute wave iv. I know it doesn’t have to be as you made specific mention of the minute waves ii and iv’s decline (red) and you have a question mark by iv.

    2. I have a concern about the one week sideways activity the third week in Jamuary…could that count as a mintute wave iv and SPX may have completed or is close to completing minute wave v? The approx. 18 point rally with a green close may have invalidated this analysis.

    I guess we’ll see this week but as usual, your analysis will prove to the prescient one.


    • We are not in wave v. It is still iv and will be for a while. The reason for it is that wave ii was fast so wave iv will probably be slow (few weeks long?). So I expect spx to move in a range (2740-2680?) for a while. Then wave v will start – IMHO


      • I think a thrust above 2740-2741/200dma will prove that Wave 4 is over.
        However, I remember clearly last year when there was a surge past 2743 to 2755 and then a drop to 2720, so nothing is written in stone as “must happen” or else. Just have to watch price and play with trailing stops in case it turns down.


  8. quickrick38 says:

    Some of the most balanced and objective analysis I’ve ever seen. Great job Tony!


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