Review
2/12 Total market view sum: "...SPY and VTI are running into long term resistance at 1HR1s, and QQQ is not far from YR1 These are key levels to watch. In addition RSI approaching overbought or fully overbought on several charts across timeframes increase the chances of a pause or a drop." Also, "Any sign of weakness on Monday means possible to reduce long exposure via a hedge on SPY. Run through the top checklist (current answer: maybe) and the more items tick off the more likely the market is at a decent trading top."
Results
Market simply blasted through the levels last week. Without any sign of rejection, no need for hedging trade.
Sum
Amazing rally continues, yet for the first time the often reliable VIX and XIV are showing signs of some top. Even if that happens, though, 3 of 5 USA main indexes have blasted above resistance, so any drop will be on to significant pivot level support. Add in rising moving averages on every timeframe and first drop will likely be bought.
Bottom line
Levels to watch this week are DIA 1HR1 area, slightly exceeded last week, along with VIX FebP and XIV 1HR2. Thus far any maneuvering out of fully long (or better leveraged long) in 2017 has cost gains, but this won't be the case forever. As strength begets strength and 3 of 5 USA mains above long term levels, we can start eyeing higher targets. This means SPY YR1, QQQ 1HR2 (almost there already) and VTI YR1.
Positioning
Dropped down to 90% long only due to RSX weakness, but think late to add or rotate.
Pivots
USA main indexes - Very healthy, with 3 of 5 main indexes clearing resistance. Only IWM not joining party which means it could play catch up or more likely lead lower on a pullback.
Sectors of note - Ideally XLF reaches at least a quarterly level for a decent top. SMH daily RSI not like other indexes but continues to power up.
Safe havens - VIX and XIV starting to show some signs of caution, but so far VIX remains below all pivots.
Global indexes - Global benchmark ACWI is lagging SPY from 11/9, but matching SPY nearly exact for 2017. EEM, FXI and EWZ all rallied above levels. RSX disappointed, SHComp not as strong, and INDA had one day above its Q1R1 then dropped back under so less impressive than the first three.
Currency and commodity - DXY held its YP exact on the 2/2 low, but move up from there has been with struggle. Held Q1P last week. EURUSD looks ready to resume lower, below all pivots for the second time in Feb.
Other technicals
Strength begets strength. RSIs above 70 are the sign of strong bull markets, and a lot less rare than the TLT line up that was part of my top call last July.
Some indexes that look a bit more ready to drop per weekly charts: IWM, EFA (?), XIV, EEM, FXI, EWZ, SHComp.
Valuation and fundamentals
Moderate positive for the market. SPX getting closer to 18x-19x forward earnings target zone that I have maintained for months (more recently shifted to 10 period moving average to smooth out some of the chop).
Sentiment
Surprisingly not that euphoric in 2017 considering the move. Extremes reached in December worked off by indexes going sideways with a very mild drop into year end. Put-call getting lower, and NAAIM has been on the high side for a while. Another pop in either AAII or ISE could be closer to a sentiment extreme.
Timing (Proprietary experimental work in progress model)
Feb dates published 1/28
2/6 - Non event
2/10 - Non event
2/21
2/24-26