Breadth

March 29, 2016 Jonathan Ravel

I also cover the NYA in the USA main index post every weekend, but I do think it is that important. When NYA is on your side on a USA index position it will usually work.

Sum
Both NYA and ACWI stalled at key pivot zones. The NYA reached its 1HP on 3/18 and was unable to close above, then had a rejection bar on 3/23. ACWI reached its Q1P and was near the level 3/18-22 until a rejection on 3/23.

Despite the strength of other popular breadth indicators, the inability for key institutional indexes to reclaim long term pivots is a cautionary note. We may yet see a second attempt and clear, but that is conjecture at this point.

* * *

Using daily charts to illustrate precision of the pivots here. NYA resistance exactly on the 1HP, and if that clears then it will be dealing with the YP.

Here are the quarterly and monthly pivots, but these will be changing on 4/1. The 2nd move above the FebP confirmed the bounce scenario.

ACWI managed to close above the 1HP for 4 trading days but fell back under with clear rejection on 3/23 with decent volume. Like NYA, it was also close to running into its YP.

And there is ACWI running into its Q1P which was exact on the high.

Breadth

March 22, 2016 Jonathan Ravel

There are dozens of breadth tools and other market internal measures out there. Various advance decline measures, new high new lows, cumulative breadth, technical signals on these like McClellan oscillator, advancing / declining volume, etc. Some of these can be helpful, so pick what you like.

Here we start with pivots on broad institutional indexes.

Sum
Both NYA and ACWI have reached places very likely to pause considering pivots and high RSIs. NYA is testing long term levels from underneath, tagging 1HP with YP just above and Q1P also nearby. ACWI cleared 1HP slightly, but ran into Q1P and YP just above.

From here let's think about the possibilities:
strong bullish: soar above - less likely given RSIs.
bullish: few days pause then clear - possible.
mixed bullish: pullback, then another try - also quite possible.
pesky bearish: fakeout with 1-2 days clear the fall back - not happening so far.
bearish: major top here and down - cannot be ruled out.
worst: chop above break above break - hopefully this doesn't happen.

NYA W has stopped cold on the 1HP. Clearing this would be additional bullish signal, but a rejection here risks more of a fade on the leaders. Also note the 2015 Q4 rejection of the YP was a major tell going forward, as well as the bottoms bank on on 1HS2 in the second half.

NYA D testing its Q1P as I type. Even though there is only about 1 more week in the quarter, for now this level is in play.

NYA all levels. The key thing here is that 1HP and YP above will be in play in April, where we will have new Q2P and of course AprilP to consider. For now rejection from a long term level is bearish.

VTI is also a broad index ETF. I'm not sure how much to weight compared to NYA due to the 8/24/2015 spike low (similar issue on QQQ, XLF, etc). But the low bang on Q1S2 looks pretty good, and the rejection of the YP early January also clear. Something to keep in mind along with NYA possibly.

ACWI weekly pausing in pivot zone YP and 1HP. Holding 1HP as support this week somewhat bullish; rejection would be bearish. Or it could stay in congestion zone and not give anything clear.

ACWI pause at the Q1P.

Now with all levels - a very likely place for a pause, especially with RSI at 68 on the high. But whether this starts a major rejection or shuffle then clear remains to be seen.

Breadth

March 15, 2016 Jonathan Ravel

There has been a lot of recent buzz about the breadth of the recent rally; the popular McClellan Oscillator was the highest in 7 years. Yes, there has been big buying in the small caps with the Russell vehicles RTY / IWM / TF futs rallying all the way from YS2 to above YS1 (ps, if you haven't seen already, the YS2 was the low of the year, along with INDU YS1, CL / oil YS1, and HYG YS1). So the USA market is definitely in a stronger position with RTY / IWM above YS1 / 1HS1 combo 103-104.

And while other breadth tools like advance/decline, advance/decline volume difference, and probably throw in other things you like such as new highs new lows, etc, all looks good here, I am going to sound a cautionary note. NYA and ACWI have not reclaimed any longer term pivots. This is where a rally could stop cold, ie only the leader INDU jumping above, while SPX fractionally above without the "look of support", NDX failing to clear, and the institutional broad indexes stopping right on or below major long term pivot clusters.

While I am more open to a bullish scenario with the USA leader INDU above its YP, if none of the others follow on their cash indexes then that is more likely to fade. Additionally, daily and weekly RSIs are at the highest levels in months if not longer, and perhaps some would say a sign of strength, but the rally more likely spent and the broad indexes are still in a downtrend.

NYA W still enough under its YP & 1HP, while reaching the highest RSI since last May. Perhaps the RSI is constructive, since that is when the market topped out, but still point remains below long term levels.

D version just under the Q1P, also with highest RSI since 2014 Q4.

Here is D with all pivots, and you can see huge cluster above with the YP, HP and Q1P all nearby, with MarR2 for good measure.

ACWI bottomed on YS1 near exact and now has rallied back near 1HP, but still under it.

ACWI D reached MarR2 but still under Q1P, with RSI approaching fully OB at 66.

And here are all long term and medium term pivots.

Since I mentioned the Russell here's an updated version of IWM with the low bang on YS2 and rally back above YS1, but far below long term levels.

IWM above MarP but well below Q1P; above MarR1 but did not reach MarR2 yet.

And combined view. USA market probably safe as long as IWM holds the 1HS1 / YS1 combo.

Breadth

March 8, 2016 Jonathan Ravel

Despite strength in the USA small caps, which definitely gave a big boost to the market, these other two institutional indexes are not close to recovering the long term pivots levels. That is a bearish point.

NYA W still well under YP / 1HP combo.

Here's the daily view; check the drop under the FebP, then low on FebS1, then up to the pivot, shuffle, then up.

ACWI weekly looks similar to NYA, although the lows of the year bang on YS1.

Breadth

March 1, 2016 Jonathan Ravel

The Pivotal Perspective on breadth is to check pivots on the institutional broad indexes.

VTI weekly 1 break of YS1 then recovery.

VTI daily chart low on Q1S2 exact, recovered FebP and now above MarP. Like many indexes well above MarP and quite a ways from MarR1. Staying above Q1S1 as support is more bullish as well.

ACWI weekly low bang on YS1.

ACWI well above MarP, Q1S1 to watch, then MarR1.

Breadth

February 23, 2016 Jonathan Ravel

There are many breadth tools out there but here we just check pivots on the institutional indexes NYA (or VTI if you prefer) and ACWI for global stocks.

NYA weekly below with long term levels only. Although there was a scare in early 2015 with one weekly close just under the YP, it was not clear rejection and quickly recovered. But August 2015 was another story with a huge break of the YP and clear rejection of the 2HP. The low was bang on 1HS2, but the failure at the YP in November was the tell, in addition to opening below all pivots for 2016.

Now what? NYA has recovered its YS1 9350 and 1HS1 9424 twice, so as long as it holds above this support zone breadth is for real and market may continue recover. Back under these levels a third time, especially if we see a clear push down from 1HS1, would likely be very bearish.

Daily chart showing medium term levels only. NYA was above the FebP on the first trading day, then fell below with the level acting as clear resistance for a few days after that. The result was a move down to FebS1 with a big recovery the next day. Yesterday's bar convincing recovery of the FebP, so medium term bullish above that level.

Here's a very similar looking ACWI weekly. The difference between highs above YR1 / 1HR1 combo in 2015 1H with the strength of China, but equally clear breakdown in August. ACWI also managed to recover its YP briefly, but failed especially towards the end of the year with a clear rejection bar.

This time it has held its 1HS1 / YS1 levels with breaking at all on weekly close; easy call more bullish above 50.47 / 49.77 respectively.

And here's the daily with medium term levels. FebP recapture looked good yesterday so very easy bull / bear line from here at 52.30, at least through the end of the month.

Breadth

February 9, 2016 Jonathan Ravel

If time permits, I'll make this a weekly report. Instead of using the dozens of breadth tools, we'll just take a look at breadth using NYA / VTI for USA and then ACWI for global indexes.

NYA & VTI are not the same but closely approximate; NYA has a lot more past history but VTI on tradingview.com gives real time instead of end of day pricing.

VTI currently breaking YS1 / 1HS1 combo, bearish. Next major support is significantly lower at 85 area. No RSI divergence on the lows.

VTI daily with medium-term (quarterly & monthly ) pivots added. You can see just one day above the FebP, a drop below, then a clear top and rejection. The last 2 days have traded below the YS1 / 1HS1 combo, bearish. Just below is FebS1 & Q1S2. While these maybe enough for a bounce or pause, I would be surprised if a drop of this magnitude and momentum was able to put in *the turn* on a quarterly ie medium term level. My view is recovery of YS1 has to happen, or we'll see 1HS2 / YS2 area down near 85. Additionally, there is nothing bullish about the RSI pattern here with several days oversold, bounce to 50 area, and straight back down.

Interestingly ACWI is above its YS1 at 49.76. But below that opens the door to 45.

Like VTI, ACWI only lasted 1 day above the FebP and once it tested the pivot again, went straight down to FebS1. For now, trying to hold YS1 and FebS1 combo just below. Next support is significantly lower. It will be interesting to see if other global indexes hold their YS1s.

Breadth

February 5, 2016 Jonathan Ravel

Continuing my series of integrating other tools with pivots, this post is about market breadth. There are many ways to measure: advance decline, cumulative advance decline, technicals on these like the McClellan oscillator, new highs & new lows, percentage above or below moving averages... the list goes on!

The Pivotal Perspective is that we can just look at pivots on the most broad indexes. I've already written about the NYSE Comp ($NYA) here, but we can go a bit further. If the focus is strictly the USA market, I'd add the Russell via IWM for ease. Then we can go to institutional indexes (or ETFs that use those as benchmarks):

MSCI EAFE via $EFA, developed markets outside USA & Canada
MSCI World Index via $URTH, developed markets
MSCI All Country Index via $ACWI, developed and emerging markets
MSCI Emerging Markets via $EEM

OK, you could make a case for the Russell 3000, or sticking with MSCI, and if anyone has any compelling arguments for why I should do things differently then please let me know. We've got 6: USA total including some obscure listings like ADRs ($NYA), a small caps index that is frequently traded and watched ($IWM); then global developed markets outside USA (EFA), developed including USA (URTH), developed & emerging combined ($ACWI) and emerging alone ($EEM). That should give us a good picture!

And if we wanted to keep things very simple you could just do NYA for USA and ACWI for the world at large and that is what I'll show in charts below. First chart weekly with long term pivots only, then daily below that. NYA was above both HPs (half year pivots) and YPs (yearly pivots) from July 2012 all the way to October 2014. The RSI is an interesting study but I'll leave comments on that for another day. After that drop, NYA was able to hold support with struggle in early 2015, and broke down convincingly in summer 2015. Key tell: the YP was clear resistance in early November 2015. The 2016 drop is really not a surprise with this view since the 2015 yearly pivot was resistance and 2016 opened below both long term pivots as well.

Now onto the daily with medium term (quarterly and monthly) pivots added. You can see the recent hold of the YS1, but NYA like most other indexes stuck under the FebPs as of close on 2/4/2016. Very simple, recovery of the FebP "should" lead to more bounce, but a second break of the YS1 would be quite bearish.

On to ACWI. Guess what? It looks like the nearly same chart! Slight difference is that 2015 cleared YR1 for a few weeks, probably due to China rally, but had similar breakdown of 2HP and YP in later 2015.

Like NYA, ACWI opened 2016 below all pivots and went straight down to YS1, which held on the low. But despite the bounce, it too is under the FebP as of 2/4/2016. We'll see what happens.

Big levels

January 23, 2016 Jonathan Ravel

The amount of indexes or ETFs that turned from long term levels - by this I mean yearly or half-year pivots - is rather amazing. These weeks are rare. The odds favor more on the bounce, but how far it gets we shall see - and use the shorter term pivots, especially the FebPs which will be in play in about a week - to gauge the strength. Of course all the levels below that broke and recovered by the weekly close will have to hold.

All charts weekly with year and half-year levels only (no quarterly or monthly). Listing comments first, then the charts. If you get confused to which is which, look for the light grey watermark of sorts identifying the index / ETF.

This post has gotten quite long, and I still didn't cover two categories - currencies and commodities namely, oil. I will do another post on that soon, but check the recent blog post on oil that pointed to the key level YS1 a day before the low!

USA mains stock indexes & ETFs
SPX / SPY / ES - all broke YS1s & 1HS1s, but recovered on close (hard to see 1HS1 on chart b/c so close to YS1)

NDX / QQQ / NQ - low on NDX near exact, QQQ disparate structure ie not on YS1, NQ more like ES

INDU / DIA - lows on YS1 & 1HS1 combo

RTY / IWM held YS2 / 1HS2 combo area. (Note: these two charts added on 1/27.)

NYA - recovered YS1, but still a fraction under 1HS1

USA additional stock indexes & ETFs
IBB - weaker bounce off YS1

SOXX - better move up from 1HS1. The Pivotal Perspective prefers SOXX over IBB here.

XLE - also YS1 low and recovery of 1HS1

XLF - I don't know what to make of pivots this year due to massive 8/24 spike, so not showing here

Safe havens & risk indicators
TYX - just slightly below its YP; recovery would put in back in congestion zone above YP but below 1HP; below YP remains bearish yield and bullish bonds.

TNX - rebounded from 1HS1

TLT - high on 1HR1 near exact

ZB - high on YR1 / 1HR1 combo, but could be pause and not rejection.

ZN - also high on YR1 / 1HR1 combo, but also perhaps pause and not rejection.

HYG - low on 1HS1

VIX - poked above, but did not close above, the YP for the last 2 weeks. decent reversal from the YP although some may point to closing below the low of last week as confirmation, which hasn't happened yet.