Review
1/28 Total market view: "Given two indexes on levels (QQQ on Q1R2 and DIA and JanR1), RSI divergence, movement structure, we may have just seen a trading high. Even if that is the case, the better thing is to hold and reduce on what trades below FebPs which will be in play from Wednesday. ... The bull market is making an amazing move and usually this means better to err on the side of holding; ie, don't be too hasty to sell. Safe havens are all saying risk on."
Result
Sigh. IWM, DIA and NYA traded below FebPs last week, and daily comments reduced exposure. I should have kept to VIX confirmation and overall bullish view, as VIX stayed under all pivots and again correct on the market. Returning to 100% long on Friday with all USA main indexes above all pivots meant paying up.
Sum
Phenomenal move continues as any doubt about Trump rally seems rather silly. Even more impressive is the follow through in 2017 Q1 in nearly every risk sector that didn't participate in 2016 Q4 - by this I mean Tech set and global stocks. Only GLD is showing some concern, and that is in part due to weakness in $USD.
On USA indexes did we just see a range bound re-test of highs with DIA and QQQ on levels or start of a melt-up move? I don't know, but there is a case to be made for either. Until VIX closes above a monthly pivot, or we see clear sentiment extremes along with multiple USA main indexes on levels, probably best to hold fully long.
Bottom line - Range bound or start of melt up, not sure here. There is no reason why VIX can't sink down into the 9s and indexes go for major resistance (and by this I mean Q1, 1HP levels, not just monthly). If market fades then IWM will likely be the first below a monthly pivot.
Positioning
Not my best move starting week 110% long, reducing on weakness, then back to 100% long with all USA main indexes above all pivots on 2/3.
Pivots
USA main indexes - QQQ on Q1R2 and DIA on FebR1; these are the levels to watch this week. Other indexes room to move higher. IWM back above FebP and will likely be first to break.
Sectors of note - Financials (XLF, IYF) and semi-conductors (XBI) at highs - healthy for the market.
Safe havens - VIX and XIV right again on recent move, showing strength and risk-on through the mild pullback. Only GLD is doubting, fractionally above all pivots.
Global indexes - $USD weakness has allowed rallies in global indexes. DXY testing YP means these rallies could stop here or become a major theme for the year.
Currency and commodity - DXY tested its YP on 2/2 and so far holding. Interesting that oil hasn't benefited despite $USD weakness.
Other technicals
RSIs on quarterly and monthly charts may help show whether market is about to melt up or stop in a range bound re-test of highs.
Valuation and fundamentals
SPX forward P/E of 10MA of 18-19x target range currently about 2375-2505. 17.5 Might be level to watch at 2308.
Sentiment
Extremes of December worked off in very bullish fashion thus far; ie, no damage to price. Recent return to highs is without bullish sentiment extremes.
Timing (Proprietary experimental work in progress model)
Feb dates published 1/28
2/6 - Setting up for stock high?
2/10
2/21
2/24-26