Last week: "Bullish scenario (slightly preferred but I am flexible) - Market rallies into FOMC and beyond, tech continues to lead up, other indexes back to or above SepPs. [...] Bottom line - We will see what FOMC does this week. Despite Yellen's Jackson Hole moment that was taken as hawkish, in the same speech she opened the door to QE4 so I will be surprised at a very hawkish tone this week. Probably things stay the same, ie, maybe next time. Even if market rallies into FOMC I still think upside limited to INDU YR1."
Result: FOMC said maybe next time, markets rallied. SPY, DIA and VTI back to SepP areas.
Sum
Both long & medium term level rejections underway for 4 of 5 USA main indexes while TLT and GLD perk up and hold or reclaim levels is reason for concern. Yet USA 2nd half leader Tech (along with sub-sectors semi-conductors and biotech) remains very strong, and VIX is quite calm. So, some mixed signals at the moment.
If you took some gains and/or hedged in August near highs, and were looking to buy the dip on what looked best (ie held up better than others) if VIX confirmed (which it did), you added back longs 9/12-15 on:
biotech, with XBI nearly all above SepP, or IBB big jump from 2HP support
FXI, which was so strong the drop stayed entirely above SepP
QQQ, first among USA mains to reclaim SepP and perhaps even stab near 2HR1 / SepS1 area as support on 9/12-13 lows
semi-conductors SOXX / SMH has to be on the list, since being one of the first to reclaim long term support in March and sector leader most of the year.
Now what? If you are savvy and then you could be adding some shorts / hedges based on Thursday-Friday move that stopped on SepPs and showed YR1 rejections on two major indexes. Right now INDU is weakest and lagging the others, although SPY with SepP and YR1 combo was a fine choice too. If markets come back next week then simple, stopped out of shorts for low cost hedge. If lower, then locking in some gains on recent longs and holding the shorts will be the right move. Also could be back in TLT and GLD on long side based on TLT holding 2HP & Q3P, and GLD back above all pivots, both as of 9/21.
Pivots
USA main indexes - Biggest levels to watch SPX YR1 2163, RUT YR1 1261; and then to some extent INDU and NYA Q3R1s at 18377 and 10785 respectively. SPX bang on the level (yet SPY already looks like rejection); and RUT, INDU and NYA all look like level rejections as of Friday. The only USA main index category not bearish is the Tech set, NDX, COMPQ and variants.
Safe havens - TLT and GLD also suggesting trouble with TLT holding long term support on the low, then reclaiming Q3P 9/21. 9/21 GLD back above all pivots as well. Yet, VIX and XIV remain calm and until we see trouble on VIX downside limited.
Global & other - Oil 3 recent tries to lift from YP since August and 3 failures.
Other technicals
USA indexes undergoing classic backtest of previous high area. See this post for details. Right now more bullish than bearish, but if INDU breaks 18132 then it won't be.
Valuation and fundamentals
These both appear more headwind than tailwind.
Sentiment
Sentiment extremes reached in August contributed to major high area. While these have been worked off, we cannot say any extreme since then.
Timing
Missed 9/7 key high
8/29-9/2 - admittedly wide; so far stock pullback low and TLT high
9/12 - pullback low on a some ETFs (9/12 close, 9/13 price low)
9/16 - low test for SPY and DIA; +1 on key low for TLT
9/23-27 - so far 9/22 key high (-1) across the board