Total market view

REVIEW
3/11/2018 Total market view: "Bottom line bulls have the ball and QQQ made a new high above its YR1 on Friday. While I still think "resistance matters" is a theme that we will see in 2018, for now it is a "go with" move most especially in tech. As EWZ and RSX seem to be cooling off it would help for USO to power above its MP as well. If adding to risk positions last week, sudden strength in small caps (IWM or KRE) were other options."

Result - QQQ went a bit higher but QR3 so far marked the top. 

Sum
In January, YR1s across the board in USA main indexes, sectors, global developed, emerging, and commodities marked a significant high for markets. In February, SPY and DIA FebPs were the high of the month. In March so far, QQQ QR3 and SPY QR2 stared a multi-day selling. In each month so far this year, "resistance matters." 

The question now is whether the market is entering an extended sideways period to work off the RSI overbought condition of 2017 (and let's face it after a massive trend at some point things have to slow down) or if there is more threat to risk. 

Points in favor of sideways range: 4 of 5 USA indexes above all pivots, including the broader NYA and IWM; new high new low chart suggests committing to the bull side; valuations are high at 18X forward earnings for SPX but levels climbing rapidly due to rising earnings; and while bearish sentiment extremes are working off there is nowhere close to bullish extreme.

Points in favor of more downside risk: Dow broke its MP last week and is struggling to reclaim in. While everyone knows more volume in SPX, from The Pivotal Perspective I have seen many times that the Dow Jones Industrials Avg has provided the clear message. Several 2018 leaders have failed at YR1s - EWZ, RSX, SMH, XBI. All of these traded above YR1s but then moved back under in the past week or two. Of the indexes I track only QQQ and KRE have lifted above YR1s and thus far stayed above. UVXY has stayed above its QP 3/9-16, and VIX remains above its YP HP and QP. 

I have been saying for several weeks that quarterly charts seem toppy on several indexes, and now there are only 10 trading days until close. Often the market will make a definitive move near the beginning of new quarters as institutions adjust their allocations. Any weakness in smaller timeframe charts may be a prelude to a further drop. This will be especially the case if Dow shows rejection of its MP. It could be good to have cash to take advantage of the next good setups in weeks ahead.

PIVOTS
USA main indexes - 4 of 5 USA mains above all pivots; DIA testing its MP.

Sectors of note - XBI & XLF YR1 rejections last week. SMH hanging near the level without clear move.

Global developed - EFA & EWJ under MPs slightly; EWG under QP and MP.

Global emerging - SHComp under QP and HP; ACWI, EEM and FXI doing well enough, as is KWEB despite YR1 area rejection; EWZ and RSX YR1 fails, INDA clear laggard this year with the recent March high stopping cold on QP HP combo and rejection from there.

Safe havens - VIX above YP, HP and QP; UVXY above QP. TLT managed to climb above its MP for the first time in weeks last week. GLD firm, GDX not. 

Commodities - USO trying again its MP though also facing D50MA; looks set up for rally this time. Other commodities weaker as DBA did not sustain above its YP.

Currencies - Bear market in cryptos getting real with leader ETHUSD breaking below all pivots today. DXY 2 moves under its MP and 2 recoveries so sitting on HS1 could be ready to rally further.

OTHER TECHNICALS
New high new low chart saying NYSE stocks OK. Yet divergences in main index leader NDX on monthly and weekly charts, as well as the quarterly wicks on SPX and INDU, seem to suggest risk of further downside ahead.

VALUATION
18X area of forward earnings starting to act as resistance again.

SENTIMENT
Not at extremes currently.

TIMING
Tweet from 1/24: volatility window 1/25-2/2 and perhaps extending through 2/15

Tweet from 2/6: "Since vol extended past 2/2, think instability in general through 2/15, & 2/9 looking like a key date. With YPs along with D200MAs testing and holding on both ES and YM near term move most likely furious bounce that then fails and sets up lower or divergence lows into 2/9." Ding! And that was pre-open!

February dates
2/2 - middle of drop
2/9 - added per tweet maybe low
2/12 - middle of move
2/15 - end of volatility window per above; so far TLT, AGG, LQD lows all 2/14 (-1)

Didn't have 2/26 unfortunately or 3/2

March dates
3/6 (minor) - minor pullback low
3/8-9 (strong) - big up and standing as close high on 3/9 for SPY, DIA and NYA.
3/16 - ?
3/22-26

April dates
4/2
4/13 (mild)
4/17
4/23