Objective Elliott Wave update on the financial markets: Tony Caldaro

Folks, here's Tony Caldaro's update of his Objective Elliott Wave analysis of the financial markets - his site is at Elliott Wave Lives On (always in the "other sites of interest" at the right side of the page here, and his updates also come in through his site feed, lower right side of the page):
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the ELLIOTT WAVE lives on
Market analysis using proprietary Objective Elliott Wave techniques
August 01
weekend update

REVIEW
The big news for the week was Q2 GDP improving to -1.0% from -6.4% in just one quarter. Despite the improvement Q2 was the fourth consecutive quarterly decline. Something that has not occurred in 60 years. The other positive reports were Chicago PMI, new home sales and a slight uptick in housing prices. On the downside weekly jobless claims were higher, durable goods orders and consumer sentiment declined. For the week the SPX/DOW were +0.75%, and the NDX/NAZ were +0.45%. The Asian markets were +2.8%, Europe gained 1.35% and the Commodity equity markets were +0.75%. Bonds gained 0.8%, Crude added 2.1%, Gold rose 0.3%, and the USD declined against the Eur/Yen/Cad.

LONG TERM: bear market
A quick review is in order. Bear markets of this degree typically unfold in three Primary waves: ABC. From the Oct 07 SPX 1576 high the market declined in a detailed zigzag into the SPX 667 low in Mar 09. We labeled this complete wave as Primary A. A couple of days after that low we projected that Primary wave B was underway.

Historically, Primary B waves retrace either 50% of the entire Primary A decline, or rally 50%, and last for at least five months. This projected an upside target between SPX 1001-1122 some time in August. We also expected Primary wave B to unfold in three Major waves. Major wave A ended in June at SPX 956, Major wave B in July at SPX 869, and Major wave C is unfolding now. On Thursday July 30th the SPX hit 997, within a few points of the minimum 50% rally level, and Monday is August 3rd. We can now state that the minimum projection from the March 09 low has been met. The next objective is to determine the actual end of Primary wave B. After Primary B concludes a larger downtrending Primary C will get underway, which will either retest the bear market lows, or go lower.

MEDIUM TERM: uptrend
Primary wave B completed Major wave A in June at SPX 956. The entire wave took the form of a zigzag: Intermediate wave A SPX 833, Intermediate B SPX 780 and an extended Intermediate C to SPX 956. The entire wave was 289 SPX points. Major wave B also took the form of a zigzag, but was a much shorter 87 SPX points or 30% retracement. Since Major wave A formed a zigzag, we are expecting the current Major wave C to also form a zigzag, to complete a double zigzag Primary wave B. Fibonacci analysis suggest two potential targets: at SPX 1014 C = 0.50A, or SPX 1047 C = 0.62A. These levels also align with two OEW pivots: SPX 1018 and SPX 1041.

We also reviewed two of the three historical events that contained Primary B waves for time relationships. The first was the DOW 1929-1932 bear market. That Primary B wave between 1929-1930 took exactly five months and two trading days. The second was the NIK 1989-1992 bear market. That Primary B wave took exactly five months and eleven trading days. These two historical references suggest that Primary wave B should end between August 10th and August 21st. We now have some Fibonacci price targets and historical time targets for the conclusion of Primary wave B.

SHORT TERM: Support for the SPX remains at 961 and then 935, with resistance at 990 and then 1018. Short term momentum remained around neutral on Friday. Since we are expecting a zigzag to unfold during this uptrend we must first identify Intermediate wave A. Thus far the rally from the SPX 869 low appears to be a five wave structure that might have ended at 997 on Thursday. When this rally does conclude we expect a much larger pullback than the recent 13-15 point pullbacks. The previous uptrend had pullbacks of about 50 points as it unfolded. Should the OEW 990 pivot hold a pullback to the 935 pivot would be quite normal for this uptrend. Then we could get another surge to the above mentioned Fibonacci targets, within the timeframe noted. Best to your trading!

FOREIGN MARKETS: The Asian markets were all higher this week for an average gain of 2.80%. All these indices are uptrending.
The European markets gained 1.35% on the week, and both the FTSE and DAX are uptrending.
The Commodity equity markets gained 0.75% on the week, and both are uptrending as well.

COMMODITIES: Bonds gained 0.8% on the week as they continue their uptrend.
Crude as usual, a volatile and difficult market, gained 2.1% despite a drop of over 8% in one day.
Gold gained 0.3% on the week and is close to an uptrend confirmation.
The USD made new lows for its downtrend -0.6% on the week, while the Eur (+0.45%), Yen (+0.3%) and Cad (+2.1%) gained.

NEXT WEEK Monday kicks off the week with Construction spending and ISM at 10:00, then Auto sales in the afternoon. Tuesday we have Pending home sales and Personal income. Wednesday we have the ADP employment index, ISM services and Factory orders. Thursday the usual weekly Jobless claims. Then Friday Non-farm payrolls, the Unemployment rate, and Consumer credit. As for the FED, Foreign exchange rates will be released on Monday, and then testimony from FED governor Tarullo on Tuesday regarding bank supervision (surely they jest). Best to your week!

CHARTS: http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1606987