USA main indexes

Sum
Last week:  2 strong, 1 middling, 1 weaker, 1 TBD -.
This week: 3 strong, 1 mixed, 1 TBD +.

So positive status change in the tech set going from middling to strong, joining INDU and SPX already there. RTY small caps remain in long term downtrend but above both medium term levels, so from weaker to mixed. NYA, getting "TBD" designation looked like pause semi-rejection from levels last week but came back to close near the levels with more chance of clear, getting a +.

Still, bullish status shifts in 3 of the 5 main USA indexes and a major change for NDX/COMPQ/QQQ/NQ to all be back above YPs, the first time since 1/5/2016 for COMPQ to be above its YP. 

The levels to watch in the coming week are still the NYA YP / HP combo at 10302 / 10228 respectively.

The other thing that is a factor is high daily chart RSIs.
SPY RSI high 4/1 69.25
QQQ RSI high 4/1 70.33
DIA RSI high 4/1 73.12, bullish to be above its 3/18-19 highs
IWM RSI high 3/7 69.87
NYA RSI high 3/18 67.88

A strong market can ignore overbought readings as the Dow has already done so far, but as more indexes join in overbought territory the more likely move is a slowdown to a range with a quick shakeout to work off the overbought condition. 

SPX / SPY / ES
Above all pivots, bullish; and not near any major resistance area. Huge support with YP 1HP Q2P and AprP all nearby. On SPX the cluster is 1980-2023. Major resistance is up at the YR1, 1HR1 and Q2R1 area all 2151-2163. The near term concern is the high daily chart RSIs.

NDX / COMPQ / QQQ / NQ
This was a huge week for the tech set as NDX lifted from its YP, COMPQ cleared YP for the first time since 1/5 this year, and NQ also jumped above its YP for the second time confirming the QQQ move earlier. QQQ different structure due to 8/24/2015 spike so I haven't really been considering that status of above its YP as fully real - now it is though. 

INDU / DIA / YM
These continue to look great especially with DIA / YM daily charts ignoring overbought readings and continuing to power up. 

RTY / IWM / TF
Mixed condition. Still well below long term levels YP and 1HP, decently above Q2P and above AprP as well. Still can be considered as possible USA long hedge against DIA, SOXX, possible SPY/QQQ longs in coming weeks.

NYA / VTI
The NYA is the only "but" of this week with clear stall at the YP / HP combo. But bang on the level and may clear next week. The daily chart shows that drops were met with enthusiastic buying. Watch this NYA YP HP area next week. VTI is already above but that is a slightly different index; still as a very broad market ETF it helps to be above. 

Quarterly and Monthly charts

3 days left in Q1 so an interesting time to check quarterly and monthly charts. For today let's check the USA mains and I'll try to include others of interest (TLT, GLD, oil, emerging markets) in the next few days. 

On all charts:
Standard Bollinger bands and simple moving averages
10MA = light blue
20MA = orange
50MA = purple
200MA = black

Sum
SPY Q chart bullish but possible RSI divergence, M chart better above 20MA
QQQ bullish with resistance at 2000 quarterly close high, Q chart RSI still overbought!
DIA looks best (and not just saying that due to earlier buys; already nicely above M chart 20MA and RSIs more room to move up)
IWM Q chart does not look bad, M chart some question
NYA Q chart could be stronger, overall better above 2007 close high, M chart congested

SPY Q chart held low areas of 2014 Q2, 2014 Q4, and 2015 Q3 which looks good for a move to the top of the range at least. Also holding a nicely rising 10MA as support, in fact 1 close near the level and otherwise above on close. All this looks bullish.

But the concern here is the clear divergence on RSI. RSI was 75.5 on the 2014 Q4 bar and 75.7 on the 2015 Q1 quarterly close high. 2015 Q4 was 69 for the clear lower high and with 3 trading days to go it is 68.6. Will RSI rocket to overbought territory again, or will there be sellers into any further strength? Something to keep in mind in the weeks ahead. I'm not sure how many SPY points it would take to get RSI from 68.6 to 70, but it isn't that much. 

SPY M chart reached RSI 50 buy area on the lows and currently testing its 20MA. Very simple, in addition to the pivots we like to consider, it is more bullish above that level but bearish if the bounce stops here. See May 2008 for a bearish example, and July 2010, November and December 2011, June 2012 for several bullish examples. 

QQQ is holding a sharply rising 10MA as support but fell back under the 2000 quarterly close high. Note this level has been resistance for 4 quarters of the last 5. Bulls have a shot, but stronger above that level. Quarterly RSI still overbought but trending lower.

QQQ M chart broke the 20MA but bottomed on the lower Bollinger band twice. More bullish above the 20MA.

DIA Q chart nearly tested its 20MA twice. RSI only 66 which has more room to move up. This chart looks pretty good. 

DIA M is above its 20MA and that is another reason to hold the longs that were purchased below that level. 

IWM Q chart looks pretty good too, holding its rising 20MA and RSI near uptrend buy area at 56. If lower then 2007 & 2011-12 high areas along with 50MA next big support area. 

IWM M chart back above rising 50MA, but lows that far outside the BB may have to test. 

NYA Q chart is holding the 20MA but would look better with a higher close than last quarter. Possible resistance at the 2007 close high area. 

NYA M chart in congestion zone between rising 50MA and falling 20MA. 

USA main indexes

Sum
Last week 2 strong, 1 middling, 1 weaker, 1 TBD.

This week 2 strong, 1 middling, 1 weaker, 1 TBD -. (This means still TBD with a slight negative.)

NYA is a bit weaker than last week, because it clearly stalled at its 1HP level; but due to the smaller range selling bar, this doesn't look like rejection quite yet. Not much status change overall. 

To watch next week: most immediate is NDX YP at 4373, because breaking this would turn tech index group from "middling" to weak and join Russell group below long term levels. Then we are also watching NYA because any lower than last week's low will start to look more like rejection than pause. And on Friday new Q2Ps and of course AprPs are in play. 

Due to the rally and likely close it is quite possible that several indexes will be in quite mixed condition heading into Q2 - like RTY group could be below YP and HP but above Q2P and AprP. If so then there is no reason to jump in willy nilly. Soon enough there will be a very clear setup. If some cash on the sidelines then we are looking to put that to work on the best setup and also impacts the portfolio in the desired manner (ie more or less long risk, more or less long bonds, more or less long oil, gold, etc). Above 2 below 2 pivots not great setup; better when you get at least 3 on your side. Or as we did from 2/12 on, we can watch for recovery of monthly levels after the chance of a big turn which means YS1s holding too.  

SPX / SPY / ES
SPX W chart still looks quite good with small red bar and holding long term levels as support. Bullish as long as that holds. SPY and ES similar, showing Q1P as support. All 3 variations above all pivots!

The resistance level on the high was a MarR2 reached on SPX nearly reached 3/21 and then tagged with a lower close on 3/22 (See second chart below.) Usually monthly levels are not enough for a major top, although current quarterly levels are far above. 

NDX / COMPQ / QQQ / NQ
NDX barely holding YP 4373 so that is a level to watch in the coming week. COMPQ still under its YP, as is NQ. QQQ above - what? This is due to 8/24/2015 spike and discrepancy of futures to ETF pivots. It does look in play though, as does NQ YP. Pesky. Still, conclusion is tech is mixed / weaker compared to SPX and INDU. NDX breaking 4373, should that happen, would be bearish development as 3/4 main tech indexes failing at YPs.
 

INDU / DIA / YM
These charts still quite healthy with INDU W small red bar in middle of tremendous up. Well above long term pivots. You will also note INDU and DIA held YS1 exact without breaking (current YM chart looks like break, but different on YM H contract at the time) and this was why I went with DIA on the long side 2/12. These continued to lead the other main USA indexes on the way up so easy choice for long adds.

RTY / IWM / TF
While above YS1 / 1HS1 area, still lagging considerably behind the other USA indexes and not nearly close to reclaiming a long term pivot level. These may open above Q2Ps however, something to watch.

NYA / VTI
NYA W does have a red bar rejection from the 1HP which is some negative. However, it is smaller range than the last blue bar and so looks more like a pause than rejection at this point. VTI looks above long term levels - barely - but side with NYA here. Even if NYA comes back and exceeds the recent high (IF), it will be running into the YP. 

USA main indexes

Sum
INDU looks fantastic, SPX also decent; we are now thinking about YR1 targets as long as those maintain above their YP levels. The tech indexes NDX COMPQ etc are lagging. RTY remains well under major pivots despite its huge rally. NYA has justed reached its 1HP level (did not clear) with YP just above, although VTI looks better in this regard. 

2 indexes INDU and SPX strong, above all pivots
1 middling (COMPQ and NQ still below YPs, with NDX slightly above, QQQ above)
1 weaker (IWM below YP, 1HP and Q1P)
1 toss up (NYA below long term levels, VTI above)

The more indexes above pivots the better. I think some pause is more likely. There is also the matter of March R2 levels reached on INDU, DIA, YM and TF (RTY futs). If any higher next week then we'll see SPX, SPY and ES MarR2s too and that could also be a place for a short term top. 

Similar format as last few weeks. Cash index weekly chart with long term levels only; then daily charts with all levels on ETFs and futures. 

SPX / SPY / ES
We can start to think YR1s at SPX 2163 as long as the YP area holds at 2016. Near term clear resistance at the MarR2s at SPX 2054, SPY 206.03 and ES 2056. There is also the 2015 close level (red line on SPY chart) which would add to selling pressure if the market drops back under this on Friday. In addition, ES RSI is fully overbought at 70, SPY reached 68, and SPX 69. Mostly likely event is some move to work off the near overbought condition; ie mild pullback or some consolidation phase. 

NDX / COMPQ / QQQ / NQ
NDX just above YP 4373, but less impressive. COMPQ still below, along with NQ too. QQQ is above due to the discrepancy from the 8/24/2015 spike low. Basically tech is lagging here (partially due to IBB impact). I suppose the NQ YP level could be used as possible short area, but NDX is above its cash level and I think there are better choices elsewhere. If NDX falls back under its YP with the look of rejection, then OK that could be a short especially with VXN confirmation.
 

INDU / DIA / YM
Wow does that INDU W chart look fantastic. Ideal high of year 18727 at the YR1. DIA just aboev its MarR2 with YM bang on it. With RSIs that high, it may be a place to take gains on the last adds and then look for a pullback. See this week strategy sum for more ideas. 

RTY / IWM / TF
Impressive percentage move off lows, and bullish to recover YS1 / 1HS1 area, but still under YP, HP and Q1P. Futs tagged the MarR2 level, although more to go on cash index and IWM.

NYA / VTI
And there is the NYA bang on its 1HP 10228 and still under its YP 10302. Back under its Q1P 10160 in additional to returning red on the year would be a bearish trigger. VTI looks better; a slightly different construction along with 8/24/2015 influence on pivots. I am not sure which to weight here so let's say toss up. 

USA main indexes

First from last week's post in the sum section: "If indexes jump further above long term pivots then semi-bear is over and bull market back! We could see a rejection, which of course keeps bear market idea alive. But given the strength of last week's up bars, some pause seems likely. [...] Right now you could say indexes confidently approaching major long term pivots and that is bullish - it looks a lot stronger than creeping up with weak advance especially on lower volume."

And then in the INDU comments: "What a huge decision for the market here perfectly illustrated on INDU! Note all the big turns on levels, 2014 low of year, 2014 higher lows, 2015 all big lows, etc. If bear market for real this should be stiff resistance; if this clears on a weekly close that would be big sign back to bullish! Both DIA and YM like the SPY / ES are just above 1HP & YP but below Q1P and MarR1."

DIA and YM held their YP for 5 straight trading days before the big leap on Friday. 

Sum
More significant pivot status changes. As of the close of last week on 3/4: INDU / DIA / YM above 3 pivots but below Q1P; by the end of the week YP had acted as support for 5 days on DIA and YM and all 3 cleared the Q1P to regain status of "above all pivots." SPX cleared fractionally on Friday, so 2014-16 gets you the Q1P, 1HP and YP so a big tell going forward if that holds. Similarly, SPY and ES also jumped above all pivots on Friday from being below 3 levels on 3/8. NDX testing its YP 4373 another key level to watch; then better if VTI holds its 1HP / YP combo at 102.50 - 102.73 and clears its Q1P at 103.41 as well. 

RTY while healthy gains from the low, still a ways to clear pivots; NYA a bit closer but basically in similar condition.  

Due to all the Q1Ps in play I am going to follow the same format as last week. Weekly charts for cash indexes showing long term levels only, then daily charts on the ETFs and futures.

SPX / SPY / ES
SPX trading through the YP / 1HP and back above all pivots! This is a big deal as it opens the door to 2162-63. That said, the pivot level does not yet have the "look" of support. When we see that, then we can really think about that higher target level. If playing the bull side obviously you'd want to see SPX remaining above 2014-15 in the coming week. 
SPY does have 1 day lift-off from the YP and above the Q1P, bullish.
ES after 3 days of healthy pause, 1 day selling, 2 days pause, broke out to upside and now above all pivots!

NDX / COMPQ / QQQ / NQ
NDX back to YP 4373 so that's a level to watch this week, COMPQ a bit below. Hard to know what to do with that QQQ YP as there is such a discrepancy between that and the cash index & futures levels (due to 8/24/15 spike low). If long against that then watch the others. NQ also still heading into resistance at 4129.

INDU / DIA / YM
Clear pivot leaders with INDU having the most "look of support" on the weekly, and both DIA and YM holding YP for 5 days (!) before the launch. If INDU stays above this pivot support area YP / Q1P 17048 & 17138 then we can start to think about 1HR1 / YR1 targets at 18584 & 18727 respectively, or 8%+ from here. 

RTY / IWM / TF
These have had a tremendous rally from the YS2 low, showing real buying in the market. Back above YS1 / 1HS1 was a tell last week, and now that needs to hold as support. That said, still a far cry from regaining Q1P, 1HP or YP pivots. 

NYA / VTI
NYA clear lift from YS1 / 1HS1 support the last 3-4 weeks, but still heading into 1HP & YP pivots. VTI pivots are at different levels, again likely due to 8/24/2015 spike, although VTI may not be exactly benchmarked to NYA, they are both very broad composites. 1 day above 1HP and YP, still heading into Q1P. 

USA main indexes

Due to levels that tagged on Friday, this week will be slightly different. Usually I post weekly charts for all variants of the 5 USA main indexes, but since a few key quarterly pivots were clear resistance last week, I thought better to show those. The way I can do this is include all pivots on a daily chart. So the format below will be weekly charts with long term levels only on the cash indexes for larger context, then daily charts with all levels on ETFs and futures. 

Sum
So many levels in play with very important implications. A few indexes especially have a tight cluster of 3 pivots and a monthly R1 all nearby. If indexes jump further above long term pivots then semi-bear is over and bull market back! We could see a rejection, which of course keeps bear market idea alive. But given the strength of last week's up bars, some pause seems likely. A clear answer is easiest but sometimes it isn't and we check again on the next bar. Right now you could say indexes confidently approaching major long term pivots and that is bullish - it looks a lot stronger than creeping up with weak advance especially on lower volume.  

Indexes testing YP / 1HP:
SPY ES NDX (almost) INDU DIA YM and VTI. This past week was the first touch of these levels since the breakdown the first week of the year. In addition, most of these are near Q1P and MarR1 levels as well. 

SPX / SPY / ES
SPX still a bit shy of huge pivot status 1HP / YP combo at 2014-15. 
SPY cleared 1HP / YP barely, but resistance at Q1P (smaller crosses at the high) and MarR1 as well.
ES like SPY. 

So immediate levels to watch are the SPY & ES long term levels 1HP / YP 199.81 & 201.01 respectively and whether those act as support or resistance; then the medium term levels Q1P and MarR1 at 201.55 and 199.79 respectively. ES versions 1988 for the 1HP / YP, then 2004 / 1998 for Q1P and MarR1 respectively. 

I won't type up levels for each index but if you don't have pivots on your platform just ask through the contact page. 

NDX / COMPQ / QQQ / NQ
NDX approaching HUGE bull/bear line for mkt at the YP 4373. 
COMPQ also below its YP.
QQQ discrepancy due to 8/24 spike, although this doesn't make sense it DOES look like the level is in play. If long on that would want to see confirmation via cash index and fututes though, which hasn't happened yet. 
NQ still well under its YP  4432.

INDU / DIA / YM
What a huge decision for the market here perfectly illustrated on INDU! Note all the big turns on levels, 2014 low of year, 2014 higher lows, 2015 all big lows, etc. If bear market for real this should be stiff resistance; if this clears on a weekly close that would be big sign back to bullish!
Both DIA and YM like the SPY / ES are just above 1HP & YP but below Q1P and MarR1. 
 

RTY / IWM / TF
The low of the year was bang on the YS2s on these indexes. Sign of strength last week was jump above YS1. 

NYA / VTI
NYA healthy rebound from 1HS1 / YS1 combo. VTI already testing resistance cluster like SPY & DIA.

The most important levels for the market

SPX, NDX and INDU are within striking distance of their yearly and half-year pivot levels. Due to the variance between the levels on the cash indexes, ETFs and futures, there is not just one level for each but a zone that is very important to watch going forward. 

In 2008, the INDU was able to backtest its YP in April after rallying from YS1 even, and we all know what happened after that. But if the YPs clear then it will be very likely the major low of the year is in. 

So it is also a good time to think about what can happen as the market approaches a critical level from underneath:

most bullish - soar through it
bullish - slight pause then clear
mixed bullish - pullback then try again
mixed bearish - overshoot by a few days then break
bearish - clear rejection
worst case - chop, ie above below above below, but let's hope that doesn't happen

SPX YP 2015, 1HP 2014
SPY YP 200.01, 1HP 199.81
ES YP 1988, 1HP 1988 (very close tag already!)

NDX YP 4373, 1HP 4373
QQQ YP 104.11, 1HP 104.11 (already cleared) 
NQ YP 4432, 1HP 4432

QQQ looks bullish but level maybe suspect due to 8/24/15 spike; I would weight the cash index and futures here.

INDU YP 17048, 1HP 16977
DIA YP 169.30, 1HP 168.60 (1HP tagged)
YM YP 16959, 1HP 16907 (1HP tagged)

Here are charts for those that tagged (or nearly tagged) levels - ES, DIA and YM.

Monthly pivots

SPY, TLT and GLD monthly pivots only shown below with no other levels at all. Obviously this is not a standalone, but we can view this as a piece of the puzzle. Sometimes there is chop, sometimes crystal clear moves. We are looking for the latter while being alert for the former. Detailed comments for SPY:

2015
August - break, recovery, break, recovery, 3rd break was IT
September - started below, resistance several days, one recovery, next break tradable swing short
October - recovery on first trading day and off to races
November - exact low of month
December - started above, break, recovery, break and drop, slight recovery not clear, another drop, clear resistance 12/29

2016
January - opened below and slam
February - 1 day above, break and tradable short, then recovery and hold, bit higher. PS, the 2/11 low was on an S1 but for sake of clarity not showing the R / S levels on this chart. 

With that in mind we will have March pivots in play starting Tuesday. If SPY opens above it can hold as support and go higher, or break for a short. Similar idea for all other asset classes (TLT, GLD, oil, currencies, etc). Worst case in this method is when it chops which is why best positioning takes into account the other levels, as well as some supplemental factors like pivots on VIX. Then those who prefer can add RSI, volume, etc. 

Note TLT mostly above its monthly pivot for 3 months, with January and February of 2016 particularly strong. At some point we will see another test of the pivot.

GLD also completely above pivots for 2 months straight; but this was after a long period of being mostly below all pivots for quite some time. 


USA main indexes

From last week: "I will do a separate post for the medium term levels to watch for the week, ie, the Feb pivots. If the market drops back down, then at least some of these YS1 / 1HS1 levels will be back in play."

And that is almost exactly where the lows were with huge holds of SPX YS1 1895 (low 1891), COMPQ YS1 4455 (low 4425), NYA YS1 9350 (low 9325), along with oil CLJ6 1HS1 30.77 (low 30.56). 

The reason I am watching cash index, ETF and futures levels is because (unfortunately) all of them seem to be in play. Last year I was more focused on the cash index levels (which worked great for NDX on 8/24); but my plan to aggressively buy SPX YS1 at 1833 in late September never triggered as the market held YS1 on the then current ES contract instead. That convinced me to include futures on all levels, not just medium term as I had been doing. And the ETFs have the benefit of free real time monitoring on TradingView as well as several other sectors & countries that are otherwise more difficult to track.

Also, due to pricing differentials on the 8/24/2015 spike low, pivots are more different this year across similar asset classes. Meaning SPX SPY ES should be about the same, but 2016 pivots vary more this year than most other years, so I want to watch which seems to have the most influence on the market. Verdict so far is the cash index yearly levels, but there are definitely some moves coming off the futures and the ETFs as well. 

Now on to this week's report on the 5 main USA indexes. All charts weekly with long term levels only. If you are new please see the FAQ for explanation. Levels sometimes look to good to be true (see low of year on the Russell vehicles) but in fact all levels established at the close of 12/31/2015 and fixed for the current period, so that means all of 2016 for yearly pivots and the first six months for first half pivots.

Sum
Several key indexes clearly lifting from YS1s is bullish, especially when those levels "look like" support. The indexes that directly tested and held major levels last week: SPX, COMPQ and NYA.

Also, RTY / IWM / TF continues the bounce from YS2 lows (all very near exact), which was basically the low in the market on 2/11. They now are testing the YS1 / 1HS1 area from underneath; a recovery of this area would be major bullish development as this has been the weakest main USA index for many months (so not including sectors like energy). A pause is mixed, a rejection of course is bearish. I think this is one of the most important levels to watch for the coming week.

If the market goes higher, then DIA, YM then INDU may test YPs as well. 

We'll also have new March pivots on 3/1 and the first thing I will scan is whether any asset is above or below these levels. 

SPX / SPY / ES
SPX clearly lifting from its YS1 last week which is bullish. If the market goes any higher it will is possible that YPs will test on the ES (which will happen before a test of SPX or SPY). 

NDX / COMPQ / QQQ / NQ
NDX continues the bounce back above YS1; COMPQ held YS1 as support last week like SPX; QQQ tested its YP! And NQ also lifted back above its YS1.
The differential between QQQ and others is due to 8/24/2015 spike low and very annoying. I won't go back to full bullish with QQQ above YP, but could add to bullish considerations if above and bearish if it is rejected. 

INDU / DIA / YM
All of these very clearly held YS1 and 1HS1 areas near the lows, which is why I recommended the buy on 2/12. And soon a very critical test of the YPs could be coming up. Right now INDU / DIA / YM are the market leader of these 5 indexes, so I will change gears significantly if these clear the YP / 1HP area. If rejected, however, then it looks like other bear market years testing the YP from underneath after a bounce, and this could and should lead to another significant leg lower. 

RTY / IWM / TF
Note the lows of the year on YS2s across the board; now all 3 testing YS1 / 1HS1 area. Recovery would be very bullish for the market, so this is one of the most important things to watch in the coming week.  

2015-16 can be summed up this way: YP hold, YR1, attempt to clear YR1, rejected, down to YP, chop with several breaks & recoveries, then sharp drop to 2016 YS2. So, 2015 YR1 to 2016 YS2. 

NYA / VTI 
NYA also clearly lifting from YS1 / 1HS1 combo which is bullish; VTI already above. 

Weekly strategy update

Judgment based on the close, but for now:

ES needs to hold 1925 its FebP. Anything below that would be first warning sign of trouble.

Also, yesterday I mentioned that it would be better for VIX to confirm strength by dropping under its QP of 19.27. So far that hasn't happened. 

The point on both of these is that a bearish move back under SPY / ES FebPs, along with INDU / VTI would mean cut recent longs and add shorts. List of short possibilities means anything that stayed completely under its FebP without even tagging: QQQ IWM IBB XLF and possibly NKY / EWJ or DAX / EWG.

GLD - I may have erred on the partial take yesterday. To be clear, I pointed out gold in late January and that main portion I think is worth holding, but any adds after the YP clear on 2/3-4 were the judgment call. Above its WP 116.97 would be short term bullish; then if GLD clears its YR1 again then I think worth having a full position. To watch. I haven't talked much about GDX, mostly but not exactly correlated, then I mentioned yesterday that it was doing fine. 

RSX, EWZ, EEM. These are fading a bit today along with the market, oil and $USD strength. EWZ in particular tagged FebR1 and now back under. As I type ACWI is dropping back under its FebP, so a close under that level would help point to taking some gains off the table on these quick squeeze ideas. EEM more tied to China and it hasn't done too much. 

BTCUSD is pulling back from its FebR1. It would be better above, but if markets start to slide again, or trouble in China, then maybe BTCUSD will explode higher. Buy on 2/16 near 407 just cannot become a huge loss so i think worth giving it room.


Weekly strategy update

Some charts on vehicles that I mentioned in the last weekly strategy report. Conclusions are obvious - USA reclaiming FebPs on SPY & DIA which is a mild positive. So my view of a Pivotal Portfolio is shifting a bit more bullish here. But a reclaim of a monthly pivot while being below the others is not the same as position long on an asset above all pivots (the only examples that I track this year have been TLT, GLD, GDX and BTCUSD). 

If you have been following along, there is  a speculative INDU / DIA position from 2/12 that is an easy hold and/or possible add (or SPY), and some smaller combo of the suggested emerging market vehicles RSX, EWZ, and EEM from 2/16 or what is left if you took some quick gains last week.

TLT is not getting hit too hard, but right now GLD looks more like rejection from YR1 area which, if appears this way into the close, I think is a profit taking signal on any add from 2/4-5. In addition, DXY has just held its YP and even reclaiming its 1HP which further pressures GLD.

SPY jumping above the FebP.

GC continuous contract making the rejection look clear (based on first hour, real judgment at the close), and this is really the 2nd time we are seeing selling from this YR1 area. 

Sure enough vehicles that led on the recovery of the FebPs are getting more pop on the bounce. RSX, EWZ and EEM here. Watch FebR1 on EWZ approaching soon.

Lastly BTCUSD had nice pop and already at the FebR1. Let's give this some time. So far pause no rejection despite DXY strength. If people want to get money out of China, a stable BTCUSD is definitely a way. So maybe there is another massive move on this. 

FebPs

A lot of February pivots in play for the coming week. I am showing med term pivot only charts here (so no S or R levels, and no yearly or half year levels), to make these easier to see. FebPs are the small orange dots. Crosses are the Q1Ps. 

If bullish then indexes will recover these levels and then they will further act as support. If bearish then we'll see any more lower and/or a clear rejection. I haven't lised NDX based indexes or RTY since they are not quite near their FebPs yet. 

SPX 1930, SPY 192.21, ES 1925

INDU 16440, DIA 163.49, YM 16373

NYA 9536 and VTI 97.76.

USA main indexes

Intro note: If you are new to my terminology please see the FAQ page and especially the video posted there.

The must read summary of the big indexes. All charts are weekly with year & half-year pivots only.

Sum
Based on the 2/8 weekly bars (so 2 bars ago) that held INDU / DIA / YM YS1s and RTY / IWM / TF YS2s, the stage was set for a bounce and that came through. And last week, SPX / SPY / ES recovered their YS1s; NDX lifted from its YS1 as COMPQ & NQ recovered YS1s, and NYA & TFI recovered YS1s too. In all cases, the half year levels are quite nearby the yearly levels as well. So this is bullish action from major long term support (both yearly and half-year) on all main indexes - with YS1s in play for all except YS2 & 1HS2 on RTY / IWM / TF.

If looking at the charts below, just check the action from the large green crosses (YS1s or in case of Russell indexes YS2s).

And who knows, maybe the major low for the year is in and the market is on the way back to yearly pivots and then YR1s. Anything can happen. Right now we can say long term support held, recovered, or bounced on all 5 main USA  indexes. 

If the market goes higher it will will take significantly more advance to recover longer term levels ie the YP / HP / QP levels. I will do a separate post for the medium term levels to watch for the week, ie, the Feb pivots. If the market drops back down, then at least some of these YS1 / 1HS1 levels will be back in play. 

SPX / SPY / ES
SPX reclaimed YS1 1895 / 1HS1 1896 combo, bullish
SPY had held levels fractionally 2 bars ago, more convincing lift last week
ES lifted above 1866

So all 3 recovered YS1s, bullish. If lower the first to break will be SPX 1895-96, then the SPY and ES levels back in play. 

NDX / COMPQ / QQQ / NQ
NDX YS1 & 1HS1 recovered fractionally 2 bars ago, clear lift above last week, bullish
COMPQ also recovered YS1 / 1HS1
QQQ perhaps not best guide this year with big discrepancy in structure due to 8/24/15 spike
NQ also recovered YS1 / 1HS1 4130

So all but QQQ (which remained above YS1 due to pivot structure discrepancy) recovered YS1s, bullish. COMPQ and NQ do not quite yet have look of support. 

INDU / DIA / YM
All 3 had clearly held the YS1s / 1HS1s 2 bars ago, and put in some bounce from there as planned. The hold 2 bars ago is why I recommended a speculative buy on INDU / YM on 2/12. 

RTY / IWM / TF
All 3 bounced from their holds of YS2 / 1HS2 combo. 

NYA / VTI
Both recovered YS1s & 1HS1s, bullish.

FebPs

Quick one here, the market is testing FebPs on:

SPY / ES / SPX (as mentioned in the usual SPY daily section yesterday) at 192.21, futs 1925 and cash 1930 respectively. 

DIA / YM / INDU at 163.49 (above yday), futs 16373 (slightly above)  and cash 16440 (slightly above) per yesterday's close.

Also keep an eye on NYA FebP at 9536.

*

2:00 EST update. As I type SPY / ES / SPX looks rejected, but DIA / YM / INDU too close to call. Things could change tomorrow but right now the SPY / ES / SPX rejection is bearish until they recover. This would mean taking profits on some other recent longs (RSX, EWZ, EEM) if not out already, and adding back shorts. Best short candidates likely to be anything that didn't even come close to recovering its FebP and quick scan turns up QQQ, IWM, IBB, XLF; or go with what is above all pivots and add back any trim on TLT.

Monthly levels are not my favorite place to position because they can change status fairly easily; so to be clear this is just finessing long / short exposure from the recent drop and bounce. If bounce looked good to continue, then I'd say add more on what is above FebPs. But stopping at the FebP and turning down puts bear breakdown scenario back in play. Watch what happens into the close, and if nothing is really clear then just wait until Friday.

USA main indexes

Intro note: If you are new to my terminology please see the FAQ page and especially the video posted there.

The must read summary of the big indexes. 

SPX / SPY / ES
SPX needs to reclaim YS1 / 1HS1 combo
SPY level is lower due to 8/24 spike, and in fact 2/12 closed slightly above
ES also below but within striking distance of level 1866

NDX / COMPQ / QQQ / NQ
NDX YS1 actually hasn't broken on weekly close yet; big level to watch considering 2009-15? tech led bull market. 
COMPQ well below however
QQQ perhaps not best guide this year with big discrepancy in structure due to 8/24/15 spike
NQ well under YS1 

INDU / DIA / YM
All 3 of these clearly holding YS1s. Read this blog post for the importance of the INDU yearly levels. Holding here sets up bounce possibility, which is why I wrote about this speculative buy. 

RTY / IWM / TF
All of these are on YS2s. As RTY etc has led the USA market down, obviously the YS2s need to hold for USA stock bounce.
 

NYA / VTI
These are not exactly the same but similar broad composite cash index & ETF. NYA bit under YS1s, VTI more easily recovered. Watch these also to gauge strength of bounce if it happens. 


USA main indexes

Weekly charts and long term levels (yearly & half year) only:

SPX / SPY / ES
COMPQ / NDX / QQQ / NQ
INDU / DIA / YM
RTY / IWM / TF
NYA

Sum: The more of these that trade below YS1s, the more likely we will see a batch of YS2s on the low that counts. Considering some current YS1 breaks that we are seeing after the market stabilized for a few weeks, that's bearish. 

SPX broke YS1 last week, SPY still above, ES breaking this morning as I type. Bearish to break the YS1s as many YS1s tried to hold the market for the last few weeks. On the long term level, next support is far below ie YS2 / 1HS2 combo at 1748 SPX.

COMPQ broke YS1 last week, NDX on the level, QQQ well above (discrepancy due to 8/24 spike), NQ break. Barring big recovery today (anything is possible) likes like both cash indexes and the futures will be below YS1s, bearish.

Interesting, INDU and DIA well above YS1s, with YM testing this morning. So this type of relative out-performance over SPX and NDX makes INDU/DIA for now, first on watch for any bounces. This is especially true if YM continues to hold YS1. Conversely, if you are short (as one would be following this method, along with TLT and GLD longs), one could use DIA as hedge if you wanted to keep more gains on stock bounces. 

RTY / IWM / TF stopped at YS1 on the bounce, making visit to 1HS2 / YS2 area likely.

NYA broke its YS1 on close for 1 week, recovered, bounce, down but held, and looks likely to open below this morning.

Filters

Pivots work well a lot of the time, but even with a good method there can be some false signals. For example, yesterday SPY looked to be lifting from the FebP. As this was the first change of pivot status since 1/6, this appeared to be at least somewhat bullish - keeping in mind that SPY was still well below the more important longer term levels of the yearly and half-year pivot. That said, with nearly all stock indexes and ETFs rallying from yearly levels, one could have easily thought the bounce would go further. As it turns out, the market will open lower today and while SPY will still be within striking distance of the pivot, SPX and ES are clearly below. 

If you looked at the SPY bar and reduced hedges or shorts based on first daily close above the pivot, then you'd have to be thinking about putting them back on today depending on the close. The main point of this post is to consider ways we can reduce false signals. This takes a bit of work, but those who like to understand the market and have fewer wrong moves will benefit. But if you don't have a lot of time, still I suggest #1 and #2. 

1. All variants of asset
Check all variants of the asset you are trading. This involves just a bit more work, but I think the result is higher confidence setups when they are all clear. For example, I refer a lot to SPY here but the cash index SPX is really the base for the ETF; and there is quite a lot of trading on the ES futures contract. As most people know, these are all related and exactly what I mean by "all variants of the asset." So there is a similar point on QQQ / NDX / NQ; DIA / INDU / YM; the Russell and TF futures; and the list goes on in bonds and commodities. For example, showing the SPY / ES / SPX all below. 

SPY looks more like lifting from pivot support. However, both the ES and SPX look like small blue bars (weak buying) which changes the picture. Weak buying from support is more vulnerable to a break just like weak selling above support increases the chance of a bounce. So if 2/3 of the variants are not clear, then maybe wait a day or adjust positioning in a similar fraction.

2. Volume
Check the volume bars on SPY and ES above. You can see that despite the first of the month which is often active, volume on both was low. In fact, both appear to the lowest volume up day of the year. Now judgement of volume can be more complex at times, meaning sometimes a volume spike is a turn and sometimes it takes divergence (ie higher highs in price with lower volume, or lower lows) but low volume buying is just not what you want to see on a bounce if you are playing for higher.

3. RSI
There are a lot of technical tools out there, but I had to add one it would probably be RSI. I know lots of people use MAs, and they can be somewhat useful, but once you start looking at different timeframes there are MA lines everywhere. Check this hourly chart of SPY and RSI on Friday and Monday was the highest it has been since 12/28. Not a great place to buy in a overall down trending market. 

4. VIX and other safe havens
I like pivots on VIX quite a lot. On VIX, it indeed dropped from the FebP which does look bullish, but bang on to the more important Q1P. So a reason to perhaps wait one more day. XIV really nailed it this time, with resistance bang on the FebP. In other words, using VIX you had a sign of caution (ie don't buy stocks with VIX on larger support) and using XIV you would have correctly NOT changed positioning (either by adding longs playing for a bounce or reducing shorts / hedges). Additionally, sometimes TLT or other bond vehicles can help confirm stock positioning.


5. Watch correlated assets
Obviously there has been a lot of selling pressure due to oil and China this year. Yesterday, oil was down about 7% and below all pivots while stocks were fractionally up and most barely above FebPs. In fact, the broader market only stabilized when CLH6 held its YS1 on 1/20-21. China in the form of Shanghai Class A index (what is available on tradingview) and FXI both below all pivots. In other words, factors that have produced selling pressure were still clearly vulnerable as of Monday. 

Weekly charts - USA main stock indexes

Showing weekly charts with long term pivot levels (yearly and half-yearly) for what I consider to be the 5 main USA stock indexes / ETFs:

SPX / SPY / ES
NDX / QQQ / NQ
INDU / DIA
RTY / IWM
NYA

SPX recovered YS1; SPY and especially ES have the look of lifting from the level as support. Also note lows the last few days bang on the level 1866 which I was mentioning all week in the daily SPY comments. But still below the major YP and HP levels by quite a lot. In my view, big levels definitely used for short covering, perhaps speculative buy, but no big investment buying until above at least one long term pivot level. 

NDX held its YS1 exact and this was pretty much what stopped the crash. Although QQQ levels "should be" like NDX, due to the 8/24 low they are quite different. So QQQ did not even reach and YS1 level although the cash index did; and very close to recovering its YP although the case index is quite far. The futures NQ also reached YS1 and held. Bottom line some programs may check in with QQQ above the YP / 1HP combo, but anyone buying should keep sharp eye on the NDX and NQ pivots to confirm.

INDU held YS1 / 1HS1 combo and decent bar up from there. DIA almost same look. 

RTY and IWM held YS2 / 1HS2 combo and now heading into YS1 / 1HS1 level which might be resistance. 

Last but not least, the NYA held its YS1 / 1HS1 combo as well. 

All of these, along with many other stock indexes / ETFs, held yearly and half-yearly levels in the past weeks. Most of these will open below February pivots, so we'll carefully watch the medium term levels (quarterly and monthly pivots) to assess the strength of the bounce.

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




A turn, but not a big buy

What? I'm writing this post to clear up any confusion from the last two posts. Here, I said best to not be thinking buy, because everything is still below all pivots; and then more recently, pointed to all the YS levels on the turn. I'll admit this sounds contradictory. 

First point: if you are going to try to catch a turn, a day where you see multiple main indexes testing and holding, or breaking and recovering, yearly levels is one of the best ways to try. That said, although quite tempting to catch the bounce if you have money on the sidelines (hence the term, speculative buy), I think there is a better way of using pivots and that is to stay with the larger trend. Here are a few nifty chart examples to drive home this point. 

The first one below is a weekly chart of IBB showing only the yearly, half-year and quarterly pivots. Pivots always in orange on my charts. As you can see, it was above all pivots the vast majority of the time from 2012 all the way to mid 2015. This was one of the best trends in the market. In fact, focusing on biotechs above the other USA sectors would have led to spectacular out-performance. 

But all that changed in 2015 second half when we finally saw not one but 2 weekly bars of decent rejections of the Q3P then a huge break of the 2HP. This was a massive change in the market. The prior 3 years, any touches of the 2HP were perfect buys, if you even saw the level. Often enough the pullbacks were to the QPs, and I'm not showing the MPs here. 

So using this basic identifier - above or below pivots - kept you on the right side of the trend. When the asset is above all pivots, focus should be on locking in some gains when it reaches the R levels, then buying back on pivot support. Or simply holding until a real trend change which was pretty clear in mid 2015. 

Now let's flip it around and put only the R (resistance) levels in red. If you thought biotechs were overvalued and you were trying to short, you would have had 1) daily migraines and 2) missed one of the best uptrends in the market. Sure, you might have caught a few of the pullbacks in September 2012, May 2013, early 2014, then again in 2015. But a lot of false starts, scratches and stop outs too; and the best possible short setups would have paled to the possibility of gains. That is, until we started seeing IBB below pivots in 2015. 

So here is another one with gold. If you focused on the short or at least avoiding GLD below pivots, then it was very easy to stay out of this asset in 2013 and most of 2014-2015 as well. But if you were a gold bug, trying to buy the downtrend on S (support) levels in green, then you have the same situation of trying to short IBB. Here and there you catch something, but the stops and headache factor, not to mention missed chance on shorts, far outweigh any possible gains of buying and catching the short-lived bounces.  

Now let's turn to the more familiar SPY. It had quite a run of above most pivots most of the time from 2012 to mid 2015, but then that changed. No one really knows if this is a 2011 style pullback or 2008 meltdown, or something in between. The point is buying S levels looks great when it is also above most pivots; then looks horrible when it is below. 

In 2008 if trying to buy SPY, then you are buying 1/14 week at YS1 maybe, then definitely 1/21 week at YS2, again 3/17. Now all those could have had some gain. But if you started to think that buying the Supports was the way to go, then you were also buying in August and September right before the meltdown. After a huge drop you finally get a winner in 2009 but you know what? Pivots started partially buying in April 2009 (above Q2P) after being completely out of the market or short from mid June 2008. I'd rather forego the chance of bounce gains against the trend, and focus on making money with the trend, instead of getting caught in the counter-trend game. You just don't know when you are trying to fight 2 years of IBB rally, or buy before a crash. 

I will change my tune if QQQ recovers its YP next week, ie add back. But I'll use that area as a stop and then look for follow through above the NDX YP.