Last week: "I don't have a bias on the coming week. Given sentiment extremes recently reached, I would not be surprised at a another small drop and comeback. Yet for now I keep to this view: ideal high area INDU YR1 18727 with other levels (Q3R2, 1HR1) a bit above that; SPX Q3R2 to 2HR1 2198-2209; NDX achieved 1 day above 4816 so if above that next pivot resistance level is AugR1 at 4857, and RUT Q3R2 to YR1 combo at 1246-1261." Also: "The main point here is we have reached a point where upside is likely limited, though markets can easily go essentially sideways for several weeks before a drop that matters."

Result was INDU less than 100 points of target zone twice, SPX within 5 points twice; NDX cleared 4816 but didn't reach pivot level. RUT did reach into target zone and dropped. So a bit pesky - I think upside limited, but market didn't quite reach the areas I have been expecting to see. So a drop in process, comeback remains to be seen. Thus far I didn't nail the profit taking / hedge day.

Sum
Was that it? Hm. A big scary event - threat of rate increase - but actually hasn't happened yet, with equally bullish conclusion (promise of QE4). Sounds more like Brexit low than big stock high.

All stock indexes above all pivots. VIX just mild concern. I ran my market top checklist again and my answer was more likely stock pause than major high. If this view is correct we'll see VIX below all pivots on Monday and a rebound.

If the media wrote hey SPX up 10% in 6-7 weeks, NDX 8 weeks up in a row natural to rest as it tests all time highs, and bullish sentiment just too high - then they wouldn't have much else to say. Instead we get all kinds of drama about .25% that may or may not happen weeks away. The smart $ in the room (Gundlach, Druckenmiller, Soros) are much more concerned about all the past years at near zero than the possibility of .25 higher.

My game plan: I uncomfortably took partial profits on Friday because SPY closed below its YR1 and VIX closed above its AugP. I'll quickly add back if SPY back above and VIX below their respective levels on Monday. Right now safe havens are looking like shorts, not ways to hedge out longs as they were in the first half of the year. Weak links continue to be Japan and Germany so that leaves shorting ETFs for most USA traders unless you have more deep pockets and trading futures; there is also EFA that is at least below its YP, still has a declining 200MA, and current high of year is 4/20 with lower highs in June and August compared to higher for most other indexes.

Pivots
USA mains - above all pivots. A pesky near tag of targets on SPX, INDU and NDX - RTY and VTI did reach levels though.

Safe havens - look much weaker below AugPs. TLT speculative short at highs still working. GLD / GDX short possible for those paying attention, or at least clear signal to take profits on longs.

Global & other - Oil above all pivots on CL1 contract from 8/15. Rollover contract and USO different story, but those above 2HPs from 8/15 also. Global indexes excepting DAX and NKY healthy participation in recent rally also whacked on Friday after making lower highs compared to earlier in August (referring to EEM, FXI, PIN, RSX, EWZ).

Other technicals
We will have August monthly close to watch, and in 4 weeks the more important quarterly close and I'll put up some longer term charts then. For now technicals appear more threatening for TLT and GLD than stock indexes.

Valuation & fundamentals
Citigroup Economic Surprise Index has faded and stocks have appropriately paused.

Sentiment
Sentiment extremes reached earlier in August so pause in rally and some shakeout is normal. Whether that becomes a real pullback of more than 5% or remains in garden variety shakeout of 2-3% remains to be seen.

Timing
In August I tried to separate stocks from TLT and GLD and whether that was success is hard to say - perhaps just cluttered up the calendar.

8/9-10 stocks - minor pullback low
8/12-13 bonds & gold - TLT high of month, GLD near lower high
8/21-22 stocks - 8/23 stock high +1 acceptable
8/23-24 bonds & gold - don't know, GLD low but TLT high both 8/25 possible
8/29-9/2 all mkts OK that's a full week and admittedly wide; a stronger window for turns

For September
9/12
9/16
9/23-27