The China short

Well this turned out to be a good move and whatever I missed by reducing max leverage on 11/28 and then again on 12/12 on USA longs has been made up on this short. It was the best index asset to short the past week and nice to catch. I was quite right to add to the initial position of 12/12 on 12/14, but I also made a mistake and covered the later entry too early. So now a question - hold or take?

Let's do a full chart workup on FXI.

Sum
All timeframes are in downtrends below 20MAs and 10MAs on each, which points to holding short. Yet daily chart RSI is fully oversold and weekly chart outside Bollinger band are both fairly rare conditions which can lead to snapback rallies. The 2017 Pivotal Perspective as of now is that FXI set to open below the 1HP and Q1P, but still on track to open above the YP at 33.74.

Additional considerations: SHComp also has been dropping. Bitcoin soaring and AUDUSD tanking both show problems inside China. 

Even though chance of bounce likely increased with RSI fully oversold, that breakaway gap is truly ugly and think the best thing is to hold and see what happens with 2017 pivots. 

Q
Below 10 and 20MAs. No Fib (not shown) support, and still above lower BB. MACD on a sell.

M
Below all MAs. If it closes under the 10MA, it may force institutional selling in January. 

M
50% at 33.57 might be additional level to watch. This is the entirely 2016 yearly range. MACD also turning negative at this level (Nov was slightly positive). 

W
BB breakdown is fairly rare and can lead to some big snapback rallies. Or, I can wait until clear divergence. Back above W50 at 34.52 would be additional positive. RSI room to move lower. 

W pivots
Not on any long term support. 

D
Broke Q4S1 without any try to hold. RSI fully oversold but outside BB. 

Current 2017 pivots (will change)
YP 33.74
1HP 35.41
Q1P 35.68

 

Global stocks

Global stocks have been great sources of trading and investment opportunities. In 2015 while USA indexes were sideways China had a terrific rally and then huge collapse. These moves were trade-able on ETFs (thin volume but there). EEM had a huge drop in the 2nd half of 2015, and Brazil has led most of 2016 in percentage return among country / index / sector ETFs.

There are a lot of possibilities but first let's divide between developed and emerging. Developed often means Europe with a focus on Germany and then Japan; with key benchmark indexes of DAX and NKY. If you are an American retail investor, then the choice is EWG & EWJ versus hedged versions. I tend to not mention these so much even though I have at other times had a significant focus on Japan - the main reason is these tend to be correlated with USA indexes and moves are more a matter of magnitude than direction and timing. Mostly, correlated not always. Regardless, if you are playing anything outside the USA, it is best to emphasize pivots and technicals on what you actually own versus an index. 

I'm sure there are people out there who want to include all the available country ETFs and this could be a worthwhile exercise, but I think quite a lot moves together anyway and I'd rather stick to the main vehicles. 

Moving onto emerging markets the big ones I track are:

FXI - China via Hong Kong
EEM - popular emerging index
INDA - India
RSX - Russia
EWZ - Brazil
ACWI - Global benchmark, kind of like NYA functions for USA indexes
Shanghai Comp via XGY0 on trading view, close enough, and tradeable through ETFs

We could also get into China tech cos and corresponding ETFs because they are significant in market cap but let's save that for another day. 

The main point is if we are positioning and selecting 1-2 USA mains, 1-2 USA sectors, 1-2 global indexes, 1-2 currency commodity positions, then a selected 0-3 as shorts then we are at about 10 different vehicles maximum. I'm sure most people have more but to me this right for an active trading account. 

For each global vehicle - weekly technical chart, weekly long term pivot chart, and daily pivot chart. 

FXI
Monthly chart at several MAs clustered, so an interesting area to watch: 20MA 37.52, 50MA 37.92, 100MA 37.85.

FXI W
Long term pivots show short cover / speculative buy chance on the February lows, then partial long term buy in 2nd half above the 2HP. 

FXI D
Monety was made in July and August; chasing in September, the 3rd month above the monthly pivot, got you in at highs. Since the election it sold off but now come back to about even. 

EEM M
Despite the percentage strength of most of 2016, thi sis under falling MAs on the monthly chart (all falling slope except 10MA). 20MA currently 35.40 interesting to watch as we head into the monthly close. 

EEM W
Responding very well to pivots with 2014 high, 2015 high, and the 2015 and 2016 lows all on long term levels or near enough. 2HP in 2016 has acted as support and EEM was able to clear the YP and then hold. Post election break but coming back - key level to watch here at 35.45.

EEM D
And there is the YP on the daily chart with a falling 20MA right on top. That said, rising D200 has basically held after trading only 3 days below. No signal long or short here, interesting level to watch. If anything I'd try shorting against the YP since the 20MA and 400MA are both falling, but with risk health and safe havens weak I would not be surprised at attempt to clear. 

INDA M
Modi's cash exchange not working so well, but maybe this is a buy chance. 

INDA W
Getting out of the way of YP rejection saved some pain here. Back above 2HP would be a positive though. 

INDA D
Even if 2HP clears, most daily moving averages against a rally except recently stabilizing 10MA. 

RSX M
Crashed with oil and has had decent rally enough off lows, but not too zippy in the second half. 

RSX W
Attempting to stay above YR1. 

RSX D
Issue with shorting the YR1 is still above all pivots and all rising MAs. Considering other global indexes, RSX could be long 11/15 and now seeing what happens. 

EWZ M
Incredible percentage rally but stopped running into falling 50MA (also weekly 200MA). 

EWZ W
First sign of strength in early 2016 was a bottom above long term support, where everything else was testing or breaking YS1s. Currently trying to stay above YR1 after breaking 2HR1. 

EWZ D
Note bar of election under NovP where it has been above, and below 2 MAs. 

Shanghai Comp
Quietly holding M50MA along with M100, back above M10 and testing M20 at 3470.
 

SC W
Partial buy possible from 10/10 week above 2HP for the 2nd time. 

SC D
Pivots and MAs agreed in August that failed, but next time has been a very nice trending move. But with RSI mostly overbought from 11/11, no new entries up here. 

Global stocks

If I had more time I would include these in the weekly rotation. These have been great trading vehicles both on the long and short side with a lot more movement than most USA stock indexes for quite some time. 

As soon as we go outside USA we have a currency issue. This is at times not insignificant. Consider Japanese Nikkei move from June 2012 to 2015 highs was 154% trough to peak, while EWJ owning the same stocks (though likely not as broad) was 54%. A deep pockets hedge fund with a global desk could trade futures on various exchanges, but I will keep this to ETFs that are more commonly available for the typical reader. 

EEM is quite commonly mentioned emerging markets ETF with high volume.

FXI China, mostly Hong Kong shares. (There are ways to play Shanghai and Shenzen - these were great in 2014-15, but stuck in range this year.)

India has choices of a few ETFs; all have currency issue (compare Nifty to any of the ETFs), but will usually mention INDA or PIN. PIN has been a bit better, so let's keep to that. 

RSX also a lot of volatility that has moved somewhat with oil.

EWZ Brazil led the drop last year and this year has been the best thing to own. Funny. 

ACWI is global benchmark ETF that tracks the MSCI All Country World Index. This corresponds to NYA/VTI for global stock market activity. 

Sum
As 4 of 5 USA mains are below Q4Ps, EEM has tested its Q4P once and held, FXI 2nd test on Friday but still above, PIN also 2 tests and holds, RSX 2 Q4P breaks the weaker of the bunch (in addition to high on YR1), EWZ soaring and great if you are holding but buy now just late. ACWI as a benchmark (to compare global stocks vs USA via NYA/VTI) also testing Q4P but mostly above this quarter places it relatively stronger than USA. 

A full chart workup on all of these is definitely worthwhile project but for this post will keep to 1 weekly tech analysis chart, 1 weekly pivots chart, and a daily pivots only chart for trend. 

EEM
This was hammered 2015 second half, but has outperformed in % terms on the rally this year. Rising W20MA (orange) support, along with W100 (thin black). If above the W200 (thick black) and top of BB obvious resistance. 
EEM weekly pivots chart cannot really get going above 2HR1 level despite trying a couple times.
EEM daily pivots only (no support / resistance) with MAs shows all above Q4P. Compare that to USA indexes (4 of 5 below Q4Ps right now). I'm thinking a re-test of Q4P with nice rising 100MA would be ideal buy (if out of longs). Of course if market rebounds it could easily recover status of above all pivots. Remember there is likely to be performance chasing into year end and everyone will be eager to own the 2016 winners. 

FXI
This weekly chart was an additional reason I thought that EEM & FXI would cool off in Q4. 10/1 Total market view: "China has had an impressive summer, with FXI all above monthly pivots for 3 months in a row and a 22% rally off 6/27 low to 9/8 high; this has helped EEM as well. But some cooling off would be normal." I was looking at the weekly 100, 200 and 400 all likely to be resistance. But now FXI has dropped into a rising weekly 20MA. Again compare this to USA indexes, as 4 of 5 mains are below weekly 20MAs and some of them even sloping down. 
FXI is under its YP because the 2015 range was so wide. Above 2HP was enough of a trend change to again consider that as longer term buy. Better if holds that 2HR1 as support. 
2nd test of Q4P with rising 100MA just below. 

PIN
Also dropping onto rising W20MA. Though this has done nothing since August, most USA indexes haven't done anything either. Check out that consistent buying near the YP on the daily chart from late July everything down there immediately back up. 2 holds of Q4P so far and anything higher on Monday would be back above all pivots. 

RSX
RSX has struggled up near its upper weekly BB despite oil's recent pop. It is also above its W20. And there it is, the low of year on YS1 and high of year on YR1 acting as resistance since mid August. RSX had multiple holds of the YP from April all the way to June before putting in another 18% up from that level. 2nd break of Q4P here, though slight.

EWZ
Last but not least! I first mentioned this along with RSX back in February because I saw it was above its monthly pivot when USA were below. That was odd at the time because this was one of the worst performing assets in 2015 and had been one of the best shorts. If you force yourself to buy what is above all pivots and hold, then you wind up with things like this sometimes. Note that aside from 2 day drop in March right on top of sharply rising 20MA, this has had some kind of long term strength (above HP or YP) since 3/4. Potential buys:

2/3 above monthly pivot and rising 10MA, stopped out
2/12 deceptive but above monthly pivot and slightly rising 20MA, could be holding
3/3 above Q1P, could be holding still
4/8 above all pivots and rising MAs, doing fine
5/10 probably stopped, if you bought there
6/3 brief drop below YP, recovered above all pivots; could be holding still
6/16 also nice looking bar
6/27 Brazil not really caring above Brexit eh? Higher low than 6/16 which learly held YP and above all pivots.
7/6 test of Q3P / OctP combo really hold or add at that point
8/2 massive hold of AugP and 2 rising MAs
9/21 doing OK fractional break of SepP otherwise fine
10/3-4 above all pivots with nice rising MAs, when much of USA was below

But I'd say given weekly chart falling 200MA, weekly and daily chart RSIs, % move off lows, certainly it is getting late in game to be now thinking to try a long. Even though leaders often benefit into year end, with charts very overbought the risk shifts to traders taking profits. 
 

ACWI
Sitting on W100 the last 3 weeks, with W20 nearby. 2nd time near Q4P, interesting to see if holds. 

 

 

 

 

 

China

Shanghai Composite was a traders dream in 2015 but this year has gone to sleep. But Hong Kong's Hang Seng has been on a tear since the 6/27 lows, up 18%. I'm not saying it is a buy here but given the steady media bias against China this is an interesting thing to watch. It is definitely helping pull up EEM as well. FXI is basically correlated to Hang Seng although technicals look just a bit different. 

Hang Seng
Quarterly chart looks fine back above all MAs. Nice hold of rising 50MA in purpose the the last few bars, and already recovered 50% of the drop from 2015 high to 2016 low. 

Monthly chart has also recovered its 50MA, and starting to lift above its orange 20MA as well. 

Weekly chart RSI near overbought, but has reclaimed 200MA and 100MA in the last few bars.

The Pivotal Perspective gave long term partial buy the first week of the second half of 2016, with the first bar above a long term pivot since the August 2015 break of the YP. Heading up to key resistance though, at YP and 2HR2 combo. 

Daily chart with the works shows great hold of daily 400MA, rising 20MA and clear of 10MA, while above all pivots. RSI overbought again, but if higher lots of resistance at the YP / 2HR2 / Q3R3 / SepR1 all 23538-23826.

FXI
Monthly chart doesn't have quite the same look since just under falling MAs (20 in orange, 50 in purple and 100 in thin black)

Similarly the weekly chart is up against a 200MA (thick black), 400MA (thick brown) just above and 100MA (thin black) slightly above that. 

Similar buy using long term pivots, but resistance a bit further away. 

Pivots look great here, but that falling 400MA in brown something to watch. 

Emerging markets

Check the tag for previous versions.

Sum
SHC (Shanghai) big picture weak, but no Q2 or AprPs yet.
FXI weak and short candidate but testing AprP today, so trigger valid below that level.
EEM possible 1HP rejection would be negative, but above AprP and Q2P.
PIN not doing much this year; also above both AprP and Q2P.
RSX holding up well despite YP rejection; above 1HP and currently testing AprP, above Q2P.
EWZ similar holding gains despite YP rejection, above 1HP and well above AprP and Q2P. 

Bottom line triggers in this method are pivot changes of status. We want to be long what is above pivots and avoid or short what is below. If long EEM and 1HP rejection, then use AprP as deciding factor; also can reduce or hedge with FXI to lessen long exposure.

In some weekly strategy reports and oil I suggested taking some profits because oil hadn't cleared a quarterly pivot, but have some runner units since likely to be above the Q2P. So far that is playing out. Similar logic with any RSX / EWZ positions. 

In this set FXI still looking like best short of the bunch. RSX and EWZ are doing the best, and of course highly contingent on oil. 

* * *

SHC W chart limited bounce. For some reason for 4/1 not appearing on tradingview.com yet, so no Q2P or AprPs yet. 

FXI weak bounce too.

FXI D testing its AprP here with Q2P lower at the orange cross. Still looks like FXI can be used as a hedge if holding EEM positions, and if FXI breaks under AprP that gets you below 3/4 pivots. 

EEM W, whoa. That is just not what you want to see if long, a try and fail above the 1HP. To my view a blue bar close would look even worse than a smaller red bar. 

The AprP is just below current price, and the Q2P near the red line at 2015 close. So at least some medium term support nearby. 

PIN (India) strong buying from YS1, but no follow through. 

Dropping onto AprP here, with Q2P not far below. 

RSX YP rejection but 1HP holding now 4 weeks. Not bad.

Hard to see with current bar but right on AprP today. 

EWZ also holding a lot of gains despite 2 red bars just under YP. Also holding 1HP as support. 

EWZ well above AprP and Q2P. Huge doulbe RSI divergence on recent highs, but holding up well. 

Emerging markets

Shanghai (SHC), FXI, EEM, PIN, RSX, EWZ

Sum
China both SHC and FXI still weak and likely first choice for shorts in Q2. EEM has been doing well but paused on 1HP, interesting area to watch. PIN getting in gear but still well under long term pivots. Nifty/Sensex might be better gauges than the ETF but if you are reading this then assume USA audience and India ETFs are the easier vehicles to trade and factor in currency issue as well. RSX and EWZ have moved with oil up to YP levels; both slightly exceeded then dropped back under. Both are still showing some strength around 1HPs and will obviously move with oil.

 No immediate signal on any of these but EEM clearing 1HP would be reason to hold that if in, or consider as longer term buy although immediately running into YP makes that not the ideal setup. Red lines are 2015 close and you can see a few that jumped when getting positive on the year. 

For study note lows of year on: FXI YS1 near exact, EEM 1HS1, PIN YS1, and RSX YS1 (some 1/20 area others 2/11). Not bad eh?

SHC W chart stable along with all risk assets but weak bounce considering. 

SHC D chart that has been above MarP most of the month but stopped just under MarR2. It is likely that SHC starts next quarter below Q2P but might be above the AprP, we'll see. 

FXI W also weak bounce, although low of year on YS1 near exact!

FXI D chart well under Q1P, but soon we'll have Q2P as possible trade signal. 

EEM W chart low 1HS1 exact and rally to 1HP. Last bar red but note held last week open level. I think this is pause more than rejection so far.

EEM fading back under Q1P with RSI reaching OB about 3x. Was that it?

PIN W massive buying from YS1 but not much follow through. 

This will look better if above Q2P, we'll see.

RSX strong move along with oil from YS1 low to YP pause. Holding 1HP as support the last 2 weeks and still above despite the drop is a sign of some strength. But for now some resistance at the YP as well. 

Big jump when RSX went green on the year, and smart money taking profits on the Q1R1 exact with daily RSI showing some bearish divergence too. 

EWZ weekly bottomed before reaching any support level, due to how far down there were on last year's range. But fast move up to the YP with 1 bar just fractionally above, then back below; still holding 1HP.

EWZ D chart big jump on getting green for 2nd time. That is picture perfect RSI divergence on the recent high.

Emerging markets

Shanghai, EEM, FXI, PIN, RSX, EWZ

Sum
RSX and EWZ have had huge rallies along with oil. Buys were the clears of FebPs as mentioned in weekly strategy in mid February as USA indexes were still well below, and/or clear buying when they went green on the year. RSX clearing YP currently stronger position, and EWZ testing, with one very volatile rejection and comeback to this level.

EEM also getting into gear, and also mentioned in strategy from mid February. It just cleared a quarterly pivot yesterday. While tougher setup heading into both long term pivots and falling D200MA, already quite positive on the year well before USA indexes and thinking this theme continues. That day above the Q1P could have been some add, but not really a setup to go massively long since still heading into 2 long term resistance levels and a D200MA with RSI near overbought. 

Shanghai, FXI and PIN bringing up the rear, and nowhere close to recovering long term levels, and negative for the year. I suppose they could get moving if oil stalls and play catch up, but for now the relative weakness puts them on the short watch list. No levels nearby for any short trigger however. These are obvious avoids on the long side for now, plenty of other leaders were much better buys the last 4 weeks. 

Shanghai massive run second half 2015 above the YP and all the way to 2015 R3. Then plummet down to YP. Down like all markets early, but very limited bounce so far. 

SHC D above MarP and stable but very limited bounce compared to other markets. Still very negative on the year too. Is this accumulation or pause before another drop? No idea. If back under all pivots then it is short candidate. 

EEM W testing 1HP. The confident approach suggests clear more likely.

Q and month levels here on the daily. The best buy really when above the FebP and/or going with breakout up 3/1. First day after Q1P was yesterday but admittedly tougher setup with RSI almost fully OB and heading into falling D200 as well. Flip side is not much to risk, if back under Q1P then reduce any late add. 

All pivots together; buying above the Q1P meant just in front of 1HP. Tougher setup as they go but also consider red line where EEM went green for year. Clear support and big buying. We could continue to see this theme. 

FXI is up with low very near YS1, but not nearly close to recovering any pivot.

Still negative on the year. All above MarP however, and last 2 days above MarR2. 

PIN (India) also not doing much. Clear hold of YS1 though. 

Still negative on the year. Between pivot levels right now, although just held Q1S1 as support. 

RSX above 1HP the last 3 weeks, with look of support the last 2, and this week clearing the YP! Of course it has rallied along with oil. Now key lows on YS1 and then 1HS1. 

RSX D very strong after going positive on the year above the red line. Some shuffle near 1HP / Q1P area but only 1 day break with several holds and lifts after that. 

EWZ fast move up to 1HP / YP area. 1HP holding as support, but YP maybe resistance here. Smaller blue bar more likely to drop as next move. 

Also huge buying when positive for the year the second time. Big rejection from YP but came right back! Testing level again here with significant RSI divergence. I cannot say good buy setup here. If in from Feb or early March I think it was partial take on the YP rejection. 

Emerging markets

EEM, FXI, PIN, RSX, EWZ

Sum
EEM, and especially RSX and EWZ are leading in pivot terms. Funny to think but EWZ beat all the USA main indexes to reclaim its Q1P! RSX too for that matter but less gain since clearing that level.

And now like USA indexes these 3 emerging market indexes are testing or approaching long term pivots and will be interesting to watch. Especially if the dollar continues weaker, these could continue to surprise the market. I first noted this in mid February when all USA indexes were at FebS1s and these three, EEM, RSX and EWZ beat these beat USA indexes back above FebPs by several days. 

FXI and PIN are the laggers and while both bottomed on major support, are not close to recovering their QP, HP or YPs. 

EEM W chart from 2015 YR1 down to pivot, break and then plunge, this year's low bang on 1HS1. Note picture perfect weekly RSI divergence on the 2016 low. May test 1HP orange dots soon. 

Here's EEM daily chart with medium term levels only, all above MarP and even above MarR2 here. Heading into Q1P soon. 

FXI low smack on YS1 but not as much pop as EEM, and far under its 1HP.

Above MarR1 but all below MarR2. 

PIN India also low right on YS1 but not in range of recovering long term pivots yet. 

This looks even somewhat like FXI but PIN low on Q1S2 while FXI was below that. 

RSX massive rally along with oil from low on YS1, and poking above 1HP here and within range of testing YP level. Also perfect RSI divergence compared to 2014 and early 2015 lows. 

RSX D above Q1P! If you bought when suggested mid February and held, or cut and got back in, now the Q1P can be easy hold level along with the 1HP.

EWZ was one of the best shorts last year, but this year bottomed without reaching a long term support level. I cannot think of any other stock index / ETF that did that. Now back to YP! 

EWZ jumped above Q1P on very high volume and has decently gained since then despite being overbought. Quite healthy here. 

China

The Shanghai Comp dropped -6% yesterday and USA stocks are shrugging this off. A few more drops like that however, could be catalyst for USA breakdown. 

This is the closest index available on TradingView, what they are calling Shanghai Class A. Note, this doesn't include yesterday's bar as the index is EOD data which kicks in USA time. So really it should be about -6.4% lower than 3038 or roughly 2845. This places it well under the 1HS1 and looks like we should see YS1 test at 2652.

Here's the daily; again picture the price near 2845. Really this had huge rejection from FepP without even tagging the level. There is an ETF for this (inverse Shanghai CHAD) but I cannot recommend a big position after -6% in the base index. But maybe 1 unit if looking to add on the short side. It is a not good entry at all but the worst downtrends can be forgiving in that regard (like buying the strongest uptrends). There also is a regular (not inverse) ETF ASHR that mirrors Shanghai and updates in real time, but due to some distribution gap we cannot use the pivots on it this year. 

I was talking about shorting FXI the last few days and so far this is moving in the right direction. I noticed that several emerging market ETFs had poked above FebPs while FXI had not. 

FXI is still trying to hold its 1HS1 but note this has already broken on a weekly close 3 bars and the last closed bar (small blue) looks weak. If this goes we could see YS1 or lower. 

And here's the daily FXI with medium term levels. Of all the other hedge / short vehicles I started mentioning last November (EEM, PIN, RSX and EWZ) it is the one that has remained below all pivots since that time. And therefore the one you could still have shorts, or if not, the first choice for a global short. 


Weekly strategy sum

If you are new to my methods you might want to read the last strategy sum and/or the recent review. 

Last week I was expecting a bounce and that delivered. Per my view of the market and timing model, my bias is for breakdown in March but I have to respect the bullish action on long term levels last week. It is easily possible that indexes go higher and the simplest strategy is to watch the FebPs that are nearest in play on SPX / SPY / ES, INDU / DIA / YM, and NYA / VTI as posted here. I really don't have an opinion on direction for the coming week and will let the FebPs decide. 

If the market shows strength then I might say reduce safe haven trades and add more longs (but only what is above a FebP); but if it shows weakness be ready to pounce by adding shorts or safe haven positions. A breakdown from here could be very fast and messy. 

Based on oil, a breakdown looks more likely. But various VIX indexes are appearing more positive, and it is my experience that VIX if often correct. We'll see what happens. More specifically:

1. In 2016, following The Pivotal Perspective would have reduced then cut (or at least fully hedged) USA stock longs, possibly reversing short, early January 1/4-7, while buying TLT. TLT then added after clearing the YP, and probably took gains on a portion of that at the YR1 / 1HR1 rejection. Basically we are monitoring the TLT position and deciding whether to go back to full strength or continue to hold the portion. If you took USA index shorts, then the YS1 holds, turn alerts 1/20-22 and 2/12 along with the INDU buy were good cover areas. 

2. Likewise, GLD was mentioned several times before the big jump, with an add 2/4-5. I think the first buy is definite hold but watch the YR1 area this week on the ETF and futures to decide on taking some profits or not. This move likely corresponds with main stock index decision at the FebPs. Also might be worth keeping DXY in mind here, as DXY is again testing its YP. A second break should help support the GLD idea. 

3. If in the INDU / DIA speculative buy, then obviously we are watching the reaction from the FebPs. If that clears across the board we could add, but if rejection then cut and take the small gain. I don't want to get cute with the counter-trend. Best gains are made long above pivots and short below. If still in the emerging market longs from last week - RSX, EWZ, and EEM all mentioned as possible buys above FebPs - and of course they have to stay above FebPs to remain valid. Again let's not get too cute with counter-trend, as these have poked above a FebP and still below all the others, but I'd give them a bit more time to play out if the DXY breaks its YP again which was testing on Friday. 

4. If in BTCUSD from 2/16 near 407, that is moving well. "Above all pivots" scores again. 

5. If market is strong, then really INDU / DIA / YM appeared to be the leader for a couple days last week, but as of Friday came back to be about even with SPX / SPY / ES so either of those could be adds. Basically I would only buy what is above a FebP. If weak then there are plenty of choices for shorts - anything that hasn't tagged its FebP yet. So NDX / QQQ / NQ, RTY / IWM / TF, IBB, XLF.

6. Oil. On the CL1 contract, oil has been below all pivots since 11/4/2015. The recent lows were bang on 1HS1 on 1/20 and YS1 2/11-12. Something that has been down 75% in the last 2 years is going to be quite squeezy. So, if already in this position from last year then your judgment call. Major support levels were the perfect places to cover. You could also hold a portion until oil recovers a quarterly pivot.

7. If in emerging market shorts as suggested as portfolio hedges from last year - FXI EEM PIN RSX EWZ were all mentioned in November -  probably you would be out at least some of these positions, most of which had huge gains. First, all except EWZ reached an 1HS1 or YS1 or both. Second, EEM, RSX and EWZ have been above their FebPs 3 times as DXY softens. FXI has been the weakest, remaining below all pivots since 11/25/2015 and so the best to hold at this point. PIN recovered its DecP towards the end of the year but again below all pivots from 1/6/16, at which point there were plenty of USA short choices as well, but also could be held as a short compared to the now relatively stronger EEM, RSX and EWZ.

Emerging markets

I first mentioned the emerging market ETFs of FXI, EEM, PIN, RSX and EWZ on 11/9/2015 as hedge choices against USA longs that were breaking under Q4R1 resistance. OK, these had been down a lot already so not a completely radical idea, but using pivots it was an easy spot as the collection were weaker and below more pivots compared to the USA indexes which at the time, were significantly stronger.  

As of 11/9/2015
SPY, QQQ and DIA above all pivots; IWM above 3 but below 2HP; NYA above medium term Q4P and NovP but still below YP and 2HP.

FXI below YP, 2HP, just above Q4P and NovP; as of 11/23/2015 was below all pivots and has maintained that category since! From 11/23 to the low on 2/11, FXI dropped 26% and is still down about -20% today. 

EEM below YP, 2HP and NovP; as of 11/27/2015 below all pivots, and maintained that status until 2/1. 2/3 lifted above the FebP again, then 2/16 was the 3rd time above the level. 11/27 close to low -18% and as of 2/16 close still nearly -12% down.

PIN as of 11/9 already below all pivots. It briefly recovered the DecP the last few days of the year, and didn't break under until 1/6. 1/6 gave a host of choices but measuring from there matching other indexes with at -12% drop and currently down about -9%, still below all pivots.

RSX as of 11/9 below YP and 2HP, above Q4P and NovP. Returned to below all pivots on 12/7 and stayed that way until 2/3; the last 2 days the 2nd time above the monthly level. 12/7H to low -25% and until 2/16 close still nearly -13% down. 

EWZ was a fantastic short for much of 2015. As of 11/9 it was still holding on to NovP; after a few bounces returned to status below all pivots on 12/10. From there to low was -25% down, and as of 2/3 it reclaimed the FebP for the second time for a drop of about -14%. 

If you were looking for a YS1 to cover, this nearly reached on FXI at the low, PIN near lows, RSX near exact lows, but you only got to 2HS1 on EEM and no long term level on EWZ, only Q1S2. 

Now what? As I type situation different with only DIA poking above Feb today, while EEM cleared yesterday fractionally, and RSX and EWZ have been above for 2-3 days as well. I suggested EEM as a speculative buy yesterday at the close, and also mentioned RSX and EWZ as long ideas in the weekly strategy sum here.  

While all stock indexes have a lot more to go to regains quarterly levels, for now the recovery of Feb pivots is definitely a bullish step, and it will be interesting to watch these going forward.

Main point: if you used these for great shorts last year, you had chance for fantastic gains. But now as long as we are seeing emerging markets beat USA indexes to clear Feb pivots, we can think the other way. Of course, this only applies to those above pivots, and anything that stays below all pivots while others recover remains a first choice short candidate. 



China

Maybe I am one day late to write about China :) I mentioned China indexes / ETFs several times last fall as portfolio hedges against USA longs for the simple reason that you had a pick of several emerging market index ETFs that were below all pivots, when only IWM was in similar condition in the USA. I'll write more about these soon, but for now let's take a look at China specifically. 

There is an ETF tracking Shanghai (ASHR) but due to a distribution and price adjustment we cannot use the pivots on that this year. Tradingview.com has Shanghai Class A XGY0 which appears similar to, but not exactly the same as, the Shanghai Composite. The prices are different, but the percentage moves line up exactly, so let's say good enough. Then we'll add FXI. EEM often trades in sync with China. Lastly as the Chinese currency has been in the news and a proxy for government concern about competitiveness let's take a look at that too. 

For the sake of brevity I'm sticking with the big picture weekly charts with long term pivots only (yearly and half-year). The interesting point is that all of these are above YS1s, and EEM and CNYUSD are even above 1HS1s. This is not the case with most USA indexes right now. OK, a lot of this is due to the huge drop the China related asset classes experienced in 2015 relative to USA; as the pivots are based on the high low and close, the yearly pivots are lower on these because of the larger differential between the high and low. But that was last year's move. It will be interesting to watch some of the 2015 beat up names as 2016 progresses.  

On the Shanghai, the first thing to spot is how well the long term pivots did on the buy. You had a try in early 2013 that eventually failed for a small loss; then you didn't have to even think about anything until July 2014 when it cleared both without any question and triggered a investment buy. The market went vertical and reached YR3/ 1HR3 combo which exceeded only 2 weeks, and that was the end of the rally. Rejection of 2HP in 2015 in July was a tell; then the low of the year was on the YP exact in August. But now it is below both the YP and 1HP like everything else. Due to the big drop in 2015, it has not yet tagged its YS1. So, 1HS1 broken but above YS1 at 2953. This will be a big level to watch going forward.

More quickly now, FXI: Currently below long term pivots, breaking 1HS1 at 29.94, hasn't tagged YS1 27.77 yet. 

EEM is actually above its 1HS1 28.12. If lower, then obviously YS1 26.73 next to watch. 

Lastly the CNYUSD cross. So far it is holding the 1HS1 exact as well. I don't know if pivots will work on this like other more widely traded asset classes. Also, was the currency a topic du jour or an issue going forward? Hard to say but we can keep it simple and say above the YS1 .1508 is more stable than below. 

Big levels

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.

XIV - near test of YS1, no official tag however

GLD - rather awful that GLD could not climb above 1HP in all the turmoil

Global stock ETFs
EWJ - held YS1 and 1HS1

EWG - held YS1 and 1HS1

FXI - holding 1HS1 but not much green 

EEM - similar to FXI

PIN - low on 1HS1 exact

RSX - low on YS1 and decent bounce along with oil

ACWI - global benchmark ETF, also low on YS1 & 1HS1 combo