REVIEW
1/20/2018 Total market view: "Most equity indexes pushed higher last week, and though advances were generally smaller than the week prior it still looks like continuation of an amazing run. ... VIX seems to suggest market expectations of a deal or limited consequences of a shutdown by closing back under all pivots on Friday after being above Q1P and JanP 1/16-1/18. ... Global indexes are also ripping higher with both developed and emerging indexes powering up. It is likely that any gov't and perhaps DXY troubles will be even more reasons to allocate abroad."
Result
Another powerful advance by most indexes.
SUM
It is The Pivotal Perspective that most major turns and market decisions happen on long term pivot, support and resistance levels (YP, YS, YR). This is especially the case when multiple main indexes, sectors, global indexes and commodities are are making the same move in unison. Last week, more USA main indexes, sectors, global indexes and oil all were in vicinity of YR1s than at any week I can recall since Februar 2016. So far, still powering up.
SPX/SPY cleared YR1 fractionally on 1/22, then established support on YR1, then launched
NDX/QQQ paused for 3 days below YR1, then cleared YR1 1/26
INDU/DIA paused for 2 days below YR1, then cleared somewhat on 1/26
NYA cleared YR1 1/22; VTI paused for 3 days below YR1, then cleared 1/26
Simply stated it is very bullish for a market which is historically stretched to have a mild pause and continue higher. I will change my tune if we see a fade back under INDU & NDX YR1s, but so far that hasn't happened. If YR1s turn into support, as they did in July - August 2016, then that opens the door to YR2s. Also keep in mind that Dow yearly levels have been major turns or key continuations every year from 2005. Clearing YR1 or making a trading top here is an important decision.
Bonds are largely weak. While metals are above all pivots, they look vulnerable to a drop. Interestingly, while VIX returned back under all pivots on 1/26 it has closed above its Q1P for 4 trading days. Likewise, XIV is not rising like stocks. UVXY is looking increasingly attractive as a hedging trade (and recommended on daily comments and Twitter last week).
Timing cycles points to increasing volatility 1/25-2/2+ and perhaps beyond. This doesn't mean I am saying stocks go down from there - volatility across asset classes, expanding ranges, potential shakeouts and recoveries (as what happened 1/25-26 in semiconductors, EWZ, etc).
PIVOTS
USA main indexes - Nearly all above YR1s with SPY and VTI already at or near 1HR2s. Only IWM lags, below YR1 and 1HR1.
Sectors - XLE YR1 near tag and down; XBI YR1 top so far; SMH not there yet due to huge range last year; XLF above.
Global - ACWI, SHComp, FXI, EEM, RSX and EWZ all above YR1s. Only INDA and KWEB not there yet or testing due to huge advances in 2017.
Safe havens - Bonds weaker and metals faded a bit from levels last week. While metals are still above pivots, and XIV above all pivots, VIX/XIV looking increasingly as the safe haven hedge this year.
Currency & commodity - USO and oil testing YR1s as well. DXY seems like it should go lower and test Q1S3 / 1HS2 and especially YS1 for a tradable low. Anything under YS1 would likely make global indexes go into melt-up mode even more than they already are.
OTHER TECHNICALS
Massive spike in new highs. We will likely need divergence or two for a major top. MCO still solidly in the positive.
VALUATION
SPX above 19X forward earnings now - 10 week average of 20X 2960 is rising fast. Seems like we will see SPX 3000.
SENTIMENT
Put-call at multi-year lows increases risk of shakeout drop in risk.
TIMING
1/4 - middle of up, non event
1/10 - mild pullback low
1/15 - i thought high 1/16 at the time, also looking like mild pullback low (+1 on 1/16)
1/31 - adding date
February dates
2/2
2/12
2/15