7/9: "Generous market continues rewarding USA stock buyers, and USA bond and gold buyers too. Europe and Japan are the places you don't want to be. USA indexes roughly sideways for 18 months with a great looking Citigroup Economic Surprise index chart, major pivot holds after a big scare and VIX spike, bullish sentiment nowhere near a top. Ingredients are all there for a classic summer stock rally (already in process really) but what I mean is a blast through to decent new SPX and INDU all time highs.
I'd just feel better about the stock move if TLT stopped going up."
Not bad eh? Blast through to new highs it was, and TLT put in biggest drop in a year.
Sum
Momentum move likely done or will be soon, but that doesn't mean the high is in. Just means market likely to slow down. A digestion week would be completely normal and healthy. If you are longs stocks then you don't want to see big rejection from SPX YR1 along with a big jump in safe havens. Until that happens better to stay long although the more things that check off on the top list the more likely the better decision is to take profits or hedge. Right now there are a few, and perhaps we are due for a minor pullback, but I don't think enough for a big position change.
If you partially hedged any SPY / ES longs with at SPX 2163 on Friday then that is likely a low cost hedge, because valid under the level and improper to hold a hedge with anything above.
Pivots
USA mains - SPX set at major resistance, other indexes meaning tech set, RUT / IWM and NYA/VTI near Q3R1s. INDU set already above Q3R1s and heading into YR1s. So far pause not rejection.
Safe havens - TLT and GLD still above all pivots but dropping from RSI extremes and moves that had stretched way out of Bollinger bands. May test support soon.
Global - EEM first weekly close above its YP all year. NKY and DAX still the weaker links; NKY testing 2HP. CL1 (oil continuous contract) also trying to hold its YP, does not look so convincing here.
Other technicals
Watching RSIs on USA daily charts - RSI reaching OB with INDU YR1 tag could be good for a hedge.
Valuation and fundamentals
Valuation pushing higher side but fundamentals confirming rally. Expect dip buyers.
Sentiment
Some extremes reached on 2 of 4 meters I track means momentum likely done.
Timing (as posted from end June)
7/13-15
7/29-8/5 strong
7/15 might be a trading high / safe haven low, but given all of the above I'd prefer a small reaction ie stock minor pullback and safe haven minor bounce, then more of the main moves (ie stocks higher and safe havens lower) into the next timing window.