REVIEW
6/24/2017 Total market view: " I thought market was very ripe to see a drop from Dow YR1, especially considering valuation and fundamental concerns, but so far that hasn't happened. I remain watchful and wary, but thus far any defensive move has not paid. ... Soon heading into the second half which means the most change in pivots other than the new year - new second half (2H), third quarter (Q3) and of course July levels for pivots, resistance and support. Often definitive moves begin near the start of quarters."
Last week DIA YR1 started to look like resistance for 3 of the last 4 trading days.
Sum
4 of 5 USA main indexes are very near yearly resistance levels:
SPY YR1, testing with SPY still a bit above
QQQ YR2, QQQ fractionally below
DIA YR1, DIA fractionally below
VTI YR1, a bit below
This is all important stuff, especially considering all the definitive moves on Dow yearly levels as I have been linking to several times in recent weeks. If safe havens looked stronger and VIX & XIV were flashing trouble, it would be easy to be bearish stocks here. But they aren't, and so I am suspending judgment on the next move for risk. I do think it is possible for a real pullback (ie SPX -5% or more) to be already underway, but markets may just gap above all these levels on Monday instead.
Bottom line
New 2H, Q3 and July pivots in play for Monday, and as mentioned already, often definitive moves begin near the end of quarters or beginning of new ones. If bullish scenario for risk, I'll be out of EEM hedges via FXI shorts and possibly back in something else, or short gold. If bearish for risk, then may cut some SPY if the YR1 fails and also below some other pivot.
Positioning
Had a fake-out move last week when adding longs 6/28 but damage not too bad considering the 6/26 USO long, SMH short, and 6/28 XLF longs. Only dings were the beta move on SPY, IWM tight stop out, and the morning gap on EEM since hedged out again on FXI early. Currently 80% net long; also will have to decide about the counter-trend plays on USO and SMH which caught the re-balancing idea. I may take gains off early.
PIVOTS
Since only yearly levels valid and new 2H, Q3 and July pivots not in play yet, ran through Q, M and weekly charts with those yearly levels only this weekend.
USA mains indexes: All about Dow 21350.
Safe havens: TLT, GLD and GDX look ready to drop. VIX and XIV some divergence, but still supportive of risk.
Sectors: Can hold SMH short below YR1. Otherwise no strong opinions here.
Global indexes: SHComp surprisingly decent, FXI on YR1, INDA also possible re-entry long. Others in congestion likely avoid.
OTHER TECHNICALS
Consider the basic long term bull case based on charts and trends, and the bear case based on global QE wind-down.
VALUATION AND FUNDAMENTALS
Earnings still improving, but the 18x level acting as resistance several times. If economic reports start improving, it will be summer rally and safe haven melt-down.
SENTIMENT
No recent extremes.
TIMING
Huge scores on some recent timing calls - one day special market slam, turn dates and larger cycle all delivered. Here's the write up.
July dates
7/3 - looks up for risk
7/21