Last week: "It is very likely that USA indexes will test MayS1s, and then we'll see what happens from there..." and "Also, NQ is barely holding on to its Q2P, and cash indexes NDX and COMPQ are a bit above Q2Ps as well. For now they are holding on, but if these break then tech indexes will be below all pivots!"
SPY, DIA, IWM and NYA all tested (or came close enough to count) to MayS1s last week, and the tech set held the Q2P with lows near exact on the cash indexes. NQ held Q2P on daily close for 7 trading days in a row.
Total view from here
Markets are quite mixed across the board so maybe the sideways range continues. Dow and SPX remain above long term levels, but the Tech set and Russell are below. TLT is up, yet VIX is down. Valuation should cap upside, but crowd is already bearish. Etc.
Last week I was expecting a move to USA main index MayS1s and said to watch the Tech set Q2Ps. Well the MayS1s held bang on the lows, and the entire Tech set (NDX, COMPQ, QQQ and NQ) held their Q2Ps too.
This coming week I really don't have a bias. If the bounce was for real then we should see stocks higher, VIX lower and perhaps TLT back under its MayP too on Monday. Most stocks have more to go before reclaiming MayPs however. If bounce was just an option expiration move then TLT bid, VIX up from its MayP and stocks back down. Also, it will be interesting to see if NDX can reclaim its YP because this has been part of the concern for stocks since late April.
Pivots
A lot of mixed bags. 5 USA mains quite mixed long term trends with 2 above, 1 testing and 2 below; medium term trends also mixed being above Q2Ps but below MayPs.
Safe havens as a group remain oddly mixed as well, with TLT above all pivots yet barely, and VIX just a fraction from reclaiming status of below all pivots. It is an odd market when the strongest trends are bonds up and VIX down but that's how it is.
Some of the global indexes (which I last addressed here), most notably FXI and EEM had more of a drop from the April highs to recent lows.
Other technicals
Last week I pointed out the downward sloping weekly 50MAs on many indexes that had acted as resistance. Last week's bar on many indexes is open to interpretation (ie not clear, a weak bounce in downtrend or key low depending on your point of view).
Another level to watch is the SPX monthly 20MA, especially as we approach the end of the month. Right now that is 2040 SPX.
Valuation and fundamentals
To me these should cap upside, but less clear is how much more they will pressure the downside.
Sentiment
Last week the number of bulls on AAII individuals was nearly the same as when the market was at its 2/12 area low. Put-call has made a rapid rise to relative high area. The crowd has become quite bearish in a mostly sideways and mild pullback, which leads to days like Friday with fast squeezes to the upside.
Timing
There were two dates / areas for May, 5/9 and 5/26-31. 5/9 gave a key high 5/10 (+1) trading day. I'd rather 5/26-30 give some sort of low but have to say 5/18 looks good as a pullback low per the pivots so far. I'll do dates for June next week.