Sum
2nd half USA main leader INDU powered up through its YR2 last week. SPX reached YR2 and looks likely to power through as well. Both NYA and VTI are also above resistance levels, confirming the strength in indexes. However, both NDX/QQQ and RUT/IWM are not making the same move. They could play catch up, or could lead on a drop if others start to slow down. Either way, they are now first choice for hedging vehicles or possibly short trades for those inclined.
In the bigger picture, barring an event shock like N Korea or possibly Taylor appointment (latter being the biggest market risk with the largest chance of happening as I type), we are likely to see divergence highs on INDU and SPX for the highs that matter. This means higher high in price, with lower highs in indicators (Bollinger bands, RSIs, and ideally both).
Still, for this week, watch the move on SPX set YR2s, and any retest of RUT YR1 area.
SPX / SPY / ES
SPX W: 4th weekly bar outside BB in a row - very rare! RSI power move means divergence high likely (higher high in price down the line with lower high on RSI).
SPX W: At major resistance; looks like momentum will carry it above.
SPY D: Its YR2 a bit higher than SPX version.
ES Z: Above all pivots and MAs from 8/30; from there only 2 minor days below 10MA. Good lesson to never ignore daily chart buy in strong weekly uptrend (this one +5%) with approximate entry level shown by red line.
ES 1: Like SPX testing YR2 here, with 2HR2 just a bit higher.
SPX sum: SPX testing YR2 area, with level already nearly reached on cash and continuous futures, with SPY a bit higher. 4th weekly bar close outside the BB is an incredible move, as is daily RSI overbought every day since 9/29. At this point, indexes may continue to to power up, have some reaction down then return to test highs, or end here. Given RSIs the last choice seems very unlikely because the market 'should' make a divergence high with this kind of strength. Despite the current momentum I'll still be watching how the market moves from SPX / SPY YR2s next week, because even strong trends often have counter-reactions from yearly levels.
INDU / DIA
INDU W: Wow.
INDU W: Blast through YR2 without any drop!
DIA D: Through Q4R2 as well.
YM Z: Above all pivots since 9/11, with last tough of 10MA on 10/2!
INDU: Hugely bullish to power through YR2, because there have been market turns on Dow yearly levels every year since 2005 (including 2017 in a way, with 6/19-7/10 weekly bar lows all holding YR1). Even if markets fade, YR2 likely to act as support.
NDX / QQQ
NDX W: Not making the same move as SPX or INDU at all. All inside BB, RSI not yet 70. Laggy.
NDX W: 2 bars above 2HR1 but weak advance makes fade more possible.
QQQ D: High on OctR2 exact so far, with Q4R1 just a bit above.
NDX sum: Not in the same league as SPX and INDU; lagging in comparison. Slightly above 2HR1, but high on OctR2 / Q4R1 combo.
RUT / IWM
RUT W: BB divergence high already in place.
RUT W: Stuck under YR1 area last 3 bars.
IWM D: IWM YR1 a bit higher than cash index. RSI divergence high.
RUT: Also seems more set up for drop with YR1 already resistance for 3 weeks on cash index, with weekly BB divergence and daily RSI divergence.
NYA & VTI
NYA W: Strong, lifting above 2HR2.
NYA D: Also lifting above Q4R1.
VTI W: Nearing 2HR2, with YR2 above that.
VTI W: Above Q4R1.
These indexes both confirming strength, which tips scales to bulls if you consider these 5 indexes as a whole.
