Sum
All USA main indexes continued dramatic rejections from YR1s that began on 1/30 and rapidly reached long term support levels. On Friday pivotal momentum main index leaders NDX and INDU held 1HPs and both closed above Q1Ps. SPX, NYA & VTI tested and held YPs on Friday's low. RUT/IWM broke its YP one day, then recovered to close near the level. This means 4 of 5 USA mains tested long term pivots support at 1HP or YP and so far are having a decently positive response.
This is enough major league support for more bounce, but my more bullish near term view based on market response to Twitter projected low area SPX 2511-2838 was tempered by checking the quarterly charts this weekend. I suspect the Bollinger bands will be resistance going forward. If this is correct then upside is limited. This means pro selling on bounces and risk control for anyone who added back some longs on Friday.
To keep it simple, unlike 2017 when virtually every week was all 5 USA mains above all pivots and above all daily moving averages, right now the pivot status is mixed:
SPX above YP & 1HP; below Q1P and FebP
NDX above YP, 1HP and Q1P; below FebP
INDU same as NDX
RUT testing YP, below 1HP, Q1P and FebP
NYA and VTI above YP and 1HP; below Q1P and FebP
In addition, all but NDX negative YTD. This is also a key level that functions as a pivot.
Bullish scenario: SPX, NYA and VTI clear Q1Ps and move back towards even YTD, then we'll see.
Bearish: Q1P rejections on SPX, NYA & VTI and any break of levels that held last week.
SPX / SPY / ES
SPX Q: BB resist 2675.
SPX M: 10MA support 2563, BB resist 2788
SPX D: 1HR2 top, YR1 rejection, 1HP bounce, fail and YP bounce. If you don't understand what i am saying here look at the chart and the FAQ for abbreviations.
SPY D: Held YP, 1HP but Q1P resistance. Also, red line at 2017 close shows negative YTD.
ESH D: Mild RSI divergence; lows outside BB. Needs to clear Q1P and D100MA.
Sum: Major support YP 1HP and D200MA holding so far (also weekly near 50MA tag, monthly 10MA). Daily needs follow through above Q1P or risk is return to lows and/or breakdown. Issue with bounce is that Bollinger bands on Q and M more likely to be resistance areas from here. If market bounces I'll be watching those areas for pro selling.
NDX / QQQ
Q: Falling back inside BB, resist 6495.
M: 10MA support, BB resist 6913
W: 20MA support
D: 1HP exact low
QQQ D: Also above Q1P and slightly positive YTD.
NQH D: Better shot at bounce.
Sum: Stronger position than SPX, low on 1HP not YP, above Q1P not below, above D100MA, daily close inside BB. However, the quarterly chart is still a problem - will pros push this up outside BB again or selling on bounces? I think the latter. If stocks down the YP is significantly lower than other indexes and looks like last chance bull market support should that test (implying that worst case yet still bull scenario si 4/5 indexes breaking and NDX keeping trend alive at that point).
INDU / DIA
Q: Still all outside the BB! To me implies further to drop.
M: 10MA near tag, BB resist 2584.
W: 20MA test.
D: 1HP hold.
DIA D: 1HP hold above Q1P (arrow). Negative YTD.
Sum: Despite falling -10%, INDU is still outside the Q Bollinger band! If markets lower then INDU YP and D200MA combo will be critical areas.
RUT / IWM
Q: BB 1542 resist.
M: 10MA support, 20MA not far.
W: 50MA and lower BB support.
D: YP 1 day close below, Friday on the level and below 1HP.
IWM D: On the YP, below 1HP.
Sum: RUT/IWM was rec'd as short-hedge vehicle near the high due to chart homework and glaring weakness compared to others. Last week first to break YP and weekly close below long term support (1HP).
NYA & VTI
NYA: YP and D200MA hold, 1HP resist.
VTI: YP and D200MA hold, 1HP resist.
Both of these are also under Q1Ps (not shown) and negative YTD.
