Version 5. See tag for prior versions (7/16, 7/23, 7/31) answered all No. 8/27 answer was pause not high - which was correct for NDX, RUT and VTI, all of which made higher highs 9/7, although next highs were lower for SPX and INDU. This is obviously a bit academic but let's see what transpired from 9/7 on to make this important.
The difference towards the end of the week 9/7-9 was that a lot more questions were answering yes compared to past versions.
1. Multiple major USA indexes at major resistance, then rejections? VIX / XIV alert?
RUT reached YR1 exact on 9/7 for the high. VTI had 1 day overshoot of its YR1 on 9/7 and then dropped back below on 9/8. Still, nothing on 9/8 really screamed trouble and the rejections came violently. While SPX and INDU had close target level failures (SPX 5-6 points 3x and INDU under 100 points 2x) NDX reached SepR1 on 9/7 as well. So 3 of 5 USA mains on resistance levels, add the NDX 2000 top for a bit more of long term importance to that monthly level. VIX started with reversal bar 9/8, then said trouble early Friday by being above the monthly pivot and exploding higher from there.
This criteria more of an issue with RUT & VTI on yearly levels, and NDX on monthly level that happened to be 2000 high as well. But I didn't suspect big trouble until VIX confirmed which was Friday open.
2. RSI extreme reached? Negative divergence? Bollinger bands in play, or divergence? (ie "other technicals"?)
RUT / IWM weekly chart RSI on 9/7 was very near 70. Quarterly chart RSI and monthly Bollinger bands in play, as discussed in detail here.
Again, more an issue this week compared to previous with RUT weekly chart RSI reaching overbought and monthly chart configurations.
3. High tested with at least 1 lower high?
SPX set: 8/15 high, 8/23 test, 9/7 stopped at prior close high
NDX set: similarly 8/15, 8/23 and 9/7 highs; all fractionally above 2000 tops then below
INDU set: same dates, 9/7 lower high
RUT set: powered up to higher highs, but ran into YR1.
Again, this criteria met much more than previous versions of this checklist.
4. Safe havens showing concern?
GLD somewhat, but TLT actually leading down. VIX reversal bar, then jump above monthly pivot Friday open.
5. Breadth or volume divergence (adv / dec volume is my favorite)
Eh, adv/dec volume 2nd lower high but not yet negative for 9/9. Cumulative breadth also made higher highs. So not really in this case.
6. Sentiment extremes reached?
Yes in mid to late August which I wrote up on 8/19. Refresh of fear needed.
7. Valuation / fundamentals?
Yes. Citigroup Economic Surprise index did a great job confirming the stock breakout by launching into positive territory for the first time in 18 months; then confirmed a pause by fading rapidly, then said sell by dropping back into negative territory. FOMC talking about hiking with recent data disappointing was the perfect storm.
8. Timing window?
Nope, not this time. I have gotten some key turns with this, but didn't have 9/7 listed this month. Maybe the dates for September in Total market views will be lows.