Another reason I like pivots so much is that this tool is working on all asset classes: stock indexes and individual stocks (especially higher volume stocks), bonds, currencies and commodities. Let's look at bonds. Depending on your focus you might be looking at TLT, the actual interest rate vehicles like TYX and TNX, or the bond futures ZB and ZN. Let's check them all!
To start here's a weekly chart with long term pivots only (year and half year). After droping sharply in 2013 with the rejection of the 1HP and YP in early May, TLT first recovered a long term pivot level in early 2014 and rallied from there. Eventually it recovered its YP and had a huge run all the way to 1HR2 top in early 2015. Although the YP broke for about 4 weeks, it was able to recover and hold a few more times.
I point out these histories to understand the long term motion of the market using pivots. TLT started the first week of 2016 with a clear lift from the 1HP. Stocks were looking ugly and this was clearly the only thing that was giving any decent buy signal (except inverse stock ETFs). The next week the 1HP held as support, and jumped above the YP. Although it had a possibly toppy reaction from the 1HR1 in red dots, the YP held as support and as I type TLT will likely close higher.
Now here's the daily chart view with all pivots.
Don't say the market didn't give you a chance to get in. There 5 days in early January there TLT was clearly above the Q1P and 1HP combo with the YP much higher as resistance. This was a good risk reward entry because you had 3 pivots all just below as support and the first real resistance considerably higher.
Let's just say if you are a long term investor without using leverage, I would look at weekly charts once a week on the weekend and focus on the closing bar. This meant a buy after the close of the first week, ie open on 1/11.
If you are going more trades and watching the daily chart, you could have been buying on 1/6 at the close, the first day above 3 pivots. Both could have been adding as the YP held as support although admittedly there was concern with the rejection from the 1HR1. If not adding though, definitely a hold above the YP because you could start thinking YR1 which is much higher.
Now, more quickly, do the other vehicles confirm these entry and hold decisions?
TYX below 3 pivots on 1/6 but no clear rejection; some red the next day.
TNX clear sell bar on 1/6 (ie TLT buy).
ZB congested for 2 days and clear buy on 1/6 and nice smooth trend up. The only selling was the JanR1 on 1/11 which was quickly answered the next day with a big rally. The discrepancy with the futures is that it already reached its YR1 level were TLT and TYX / TNX are nowhere close to yearly R1 / S1s respectively. This is because the futures aren't looking back for the full year; this is annoying discrepancy of the method but programs are still positioning off these levels.
ZN also jumped above 3 pivots on 1/6, and you had a chance to buy there or the next few days.
Back to TLT. TLT already has a high on 1HR1 exact on 1/20 which was the date of the stock low. That is a major resistance level and important to watch. But if the YP continues to hold as support, that is even more bullish because it will mean TLT is above all pivots. Trust me, there is not much to buy right now that is in that category (ie above all pivots). Maybe we will see Q1R2 at 129.80, or even what would surprise everyone is a big bond rally back near the 2015 highs to YR1 area at 134.42.