First I would like to take the opportunity to express my sincerest condolences to the Caldaro family as Anthony Caldaro, the father and master of Objective Elliot Wave (OEW), passed away Monday February 11. See here. This is a sad development for the entire market forecasting- and Elliot Wave community as Tony has been a guiding force for many. He was a true gentleman; humble, kind, and compassionate who possessed and passed on knowledge and wisdom far beyond the daily numbers the stock markets give us. He was therefore a true teacher and I am honored and proud to have been his apprentice and to be part of his OEW group.
The last conversation I had with Tony was a few days ago when he asked if he should take over the OEW updates on AMD and GDX (see here and here), which I had been doing for him over the last year or so. Because of my own paid-for forecasting services and Hedge Fund activities I could no longer do those (conflict of interest) and thanked him for taking over. I also took the opportunity to thank him for where I am now (own full-time market-forecasting services and operating my own Hedge Fund), which would not have been possible without him. His response is shown below:
We discussed a lot of other things, such as socialism and saeculum cycles which Tony was well-versed in to say the least, and knowing I put a big smile on his face days before his passing and that he left us knowing how successful his teaching, mentoring, and guidance has been for me -and many others!- is a small gratitude as he will be missed.
As the markets continue their relentless march forward, I am sure Tony would like us to continue to analyse it and I would like to provide you with my insights despite his passing. Namely, last week I showed the NASDAQ100 (NDX) looked like it was about to complete a picture perfect five wave impulse up. See here. Although there were technically enough scribbles in place to count it as such, unfortunately, I was wrong as what I had originally counted as (green minor) wave-3, 4 were only one-degree lower (minute) waves: wave-iii, iv of wave-3. The market did drop right after I posted my update, but is now marginally higher.
Using the NASDAQ this time we can see these minor waves 3, 4 clearly following a nice Fib-extension and retrace pattern, and wave-5 of v of 1 is now underway.
The technical indicators are now starting to diverge, and although divergence is only divergence till it isn’t; they do line up with a final 5th wave higher (less momentum). Note for example the Money Flow Index (MFI14) peaked mid-January right at the height of the 3rd wave (red intermediate wave-iii) and has since been declining: less money is flowing into the market as price goes higher. This is as far as I know typical 3rd and 5th wave behavior.
If we zoom in on the NASDAQ, see below, we can see that price should ideally do one more push higher for minute wave-v of 5 of v of 1 to complete the impulse. But it is not required. Hence, why betting on a final 5th of a 5th wave is never the most lucrative of trades. A move below Monday’s high from current levels ($7344) will mean the NASDAQ has most likely topped. Of course it can always sub-divide so we will need to see a move below last week’s low (green minor-4) at $7225 to know for sure a larger correction is underway (black major wave-2) to IMHO ideally around $6900 +/- 50. From there I expect at least an equally large rally, if not an entire five wave impulse up. Get ready 🙂
With this I would like to thank you for your time to read my update, and please don’t forget there’s a lot more to life than the markets, making money, trying to become rich, etc. All are important, and worthy goals to strive for, but if Tony taught me one thing it is to be kind, humble and compassionate. Be yourself, think for yourself, don’t follow somebody else’s ideologies; be objective. And love one another and take good care of each other because live is short.
Founder and President Intelligent Investing, LLC
Vice President and co-Founder NorthPost Partners, LP