Valuation and fundamentals

I've been pointing to 18x forward earnings as resistance in each valuation post all year. As of last week that level was SPX 2121.

There is some fluctuation in the estimates each week that I am using from the WSJ. This week earnings estimates dropped a bit, so the P/E finished the week at 17.92.

This makes the 18x level lower, down to 2105. Potential support at 17x now 1988.

* * *

Similarly Yardeni's report of the Citigroup Economic Surprise Index, while looking slightly better for a little while, has not changed its essential character from the start of 2015 - below the zero line. 

Check the tag and you'll see I've consistently pointed out both factors as limiting upside, and we saw part of what that means on Friday with pro sellers hitting the 18x level on SPX before the market could test the highs. 

Talk in San Francisco on 6/11

Through TSAA-SF.

6/11/2016
10:00 AM - 12:00 PM
Location: Golden Gate University, Rm 3214
See link above for ticketing information

Pivots - The Best Technique You Probably Aren't Using Yet

Did you know the key stock index low of 2016 on 2/11-12 was bang on yearly support levels for the Dow, Russell, oil and high yield bonds? And that the high of the year this far in TLT was directly on a major pivot cluster as well? The list goes on. This talk will explain a less common technical tool and will discuss its usefulness in all components of a successful trade: entry, management, and exit. We will look at short, medium and long term market examples so the talk will be of interest to all traders and investors. Learn about the surprising simplicity and effectiveness of pivots for more effective market analysis and profitable positions.  

Bio
Jonathan Ravel has been a market strategist and hedge fund consultant for ten years. He lives in San Francisco and has given Pivot Previews at the last two TSAA Round Ups. 

 

Total market view

Last week: "Bullish on USA stocks is the correct view after the Tech set and NYA jumped back above YP / 1HPs. Now I will be watching the RTY / IWM YP and HP. If that clears along with further safe haven weakness, full on bullish USA stocks. However, that may not happen; we could see the rally stop cold on the RTY / IWM YP as the safe havens hold Q2Ps areas.... And of course, we'll have new JunePs which look to be supportive for USA indexes and somewhat bearish for safe havens."

So far RTY has tested its YP area and paused; but not a clear and not a rejection either. INDU held its JunP near exact for all 3 days of June thus far. Yet TLT jumped its above JunP from the start of the month and blasted off from there. On Friday GLD back above all pivots as well. 

Sum
With the strength in 2 of 4 safe havens, I am a bit less bullish on USA stocks and think risk of some fade from RUT / IWM YP area has increased. At the same time, all 5 USA main indexes are above JunPs and VIX / XIV area unconcerned so one cannot be too bearish either. 

This is an odd market and it will probably resolve at some point - ie stocks in rally mode as safe havens drop, or stocks lower as safe havens lead and VIX / XIV shows trouble as well. Until then, perhaps we should expect choppy sideways in most assets and look to the best momentum moves for gains. Right now that is TLT across all timeframes. I pointed out SOXX many times earlier this year, and though INDU has stopped leading USA on the upside SOXX has been great, most especially on the rally from the May lows.

Pivots
On USA mains we are watching the RUT / IWM YP and 1HP area, and then the JunPs with INDU / DIA already testing 3 days in June. 

The big pivot development was the TLT blast off after holding Q2P again then starting June above its monthly pivot. Looks like test of YR1 / 1HR2 area on the way.  GLD also had a massive jump on Friday and back above all pivots. Strength in safe havens usually puts a lid on stocks at least.

Yet VIX & XIV remain undisturbed and still look quite bullish for risk. Watch the JunP on the VIX, and YP / 1HP area on XIV.

Other technicals
Simple idea - look at the slope of the 20MA on quarterly, monthly, weekly and daily charts across various indexes / ETFs. What looks the best? TLT. 

Valuation and fundamentals
While not preventing a move to test 2015 highs, I think these are still putting some upside limit on USA indexes. See today's post for details.

Sentiment
No edge here with no extremes on any of the 4 readings I track. 

Timing
INDU respecting the 5/26-31 turn area so far, though SPY and QQQ bit higher on 6/2. Turn areas for June (no change from last week): 6/7-9, 6/13-14, then 6/28 (mild). 

Safe havens

Sum
VIX and XIV look quite bullish for stocks. TLT and GLD say the opposite. We've seen this condition before this year, but that's an odd market.

Hard to be full on bullish in stocks with TLT so strong and GLD back above all pivots as well. 

TLT
Wow. 2 lows bang on the Q2P, open above JunP and sudden blast off. Looks like test of YR1 ahead. 

GLD
After making a high bang on 1HR3, GLD looked like it was heading to Q2P but instead jumped above its JunP on the massive jump on Friday. Back above all pivots. 

VIX
Not concerned yet, below all pivots since 5/24 and holding the JunP as resistance. Other times the market has dropped for real VIX has simultaneously jumped above pivots. 

XIV
Above its YP for the first time all year on Thursday and Friday. Similarly, when the larger market has dropped for real then XIV has broken under pivots. 

USA main indexes

Sum
Last week 4 indexes above long term levels, 1 below.
This week 4 indexes above long term levels, 1 testing.

The nearest levels to watch are the RUT set YP / 1HP area - of huge importance especially considering the low of 2016 was on the YS2. I am implying that the YP area could be a significant top. 

Otherwise the other indexes really look fine above all pivots. Only the INDU set tested the JunP (all 3 days in Jun this far).

Simple bullish scenario is above the INDU JunP and RUT lifting above its YP.
Simple bearish scenario would be INDU breaking JunP followed by tests by the others, and RUT YP / 1HP rejections. 

* * *

SPX / SPY / ES
Nothing wrong with the SPX set here; above long term levels, and the SPY & ES daily charts show above all pivots. Ideally we would see at least a quarterly resistance level for a major top. 

NDX / COMPQ / QQQ / NQ
No change from last week; the entire tech set above all pivots. 

INDU / COMP / DIA / YM
INDU vehicles held JunP all 3 days of June. After being the relative leader the rally, DIA has turned into the lagger as the other indexes (SPY & QQQ) are above their JunPs. 

RUT / IWM / TF
Test of a very important area, the YP / 1HP. Cash index high bang on YP but held the 1HP on Friday close. IWM similar, yet slightly above the YP on Thursday close; futures even better with holding above both on daily close.

Importance of this level cannot be under-stated with the low of the year bang on YS2. Above would be a huge score for bulls, but at the same time if rally were to stop this is the place at least on this index. 

NYA / VTI
Above all pivots. 

Valuation and fundamentals

My spreadsheet since May for SPX with data from the WSJ. 

Date / SPX 12 month forward earnings estimate / 12 month price earnings ratio
5/06   116.95   17.59
5/13    116.15    17.62
5/20   117.21    17.51
5/27   118.26   17.75
6/03   117.86   17.81

So the earnings number has fluctuated somewhat - down a bit, up decently, down a bit but the p/e has remained in a tight range from 17.50 to near 18 yet not above on a weekly basis. Right now 18x forward earnings is 2121. Obviously this will also continue to fluctuate somewhat depending on the earnings estimates but this number is still near enough to the all time high (only 13 points) for a test. 

The Citigroup Economic Surprise Index looked to be perking up until Friday but still below the zero line.

We may see differently as time unfolds but with FOMC and election uncertainty, I don't believe we will see substantially above 18x forward earnings. And until the economic index moves decently into positive territory, ie, data is coming in better than expected, the case is weaker for convincing new all time highs across the board on the USA main indexes. 

Sum: both should be limiting upside, yet could be room to test the 2015 highs. Not sure how much downward pressure. 

Total market view

Last week I thought the markets were quite mixed and contradictory and I didn't have an opinion either way: "This coming week I really don't have a bias. If the bounce was for real then we should see stocks higher, VIX lower and perhaps TLT back under its MayP too on Monday. Most stocks have more to go before reclaiming MayPs however. If bounce was just an option expiration move then TLT bid, VIX up from its MayP and stocks back down. Also, it will be interesting to see if NDX can reclaim its YP because this has been part of the concern for stocks since late April."

So the move back above all the MayPs on the main indexes was a surprise but easy to go with it, especially seeing NDX back above its YP too. 

Total view from here
Bullish on USA stocks is the correct view after the Tech set and NYA jumped back above YP / 1HPs. Now I will be watching the RTY / IWM YP and HP. If that clears along with further safe haven weakness, full on bullish USA stocks. However, that may not happen; we could see the rally stop cold on the RTY / IWM YP as the safe havens hold Q2Ps areas. We'll see what happens. And of course, we'll have new JunePs which look to be supportive for USA indexes and somewhat bearish for safe havens. 

Pivots
We'll have new June Ps starting 6/1 and it is likely that USA stock indexes will open above. Also, it is likely that TLT and GLD will open below. The big levels to watch from here are the RTY / IWM YP / 1HP area, and then on the safe haven side we may see tests of Q2Ps for both TLT and GLD.

Other technicals
If time I would do a technical review on quarterly, monthly, weekly and daily charts across all these indexes. Suffice to say stocks are resuming an uptrend and safe havens looking vulnerable. Bottom line: safe havens down should help stock indexes test 2015 highs.

Valuation and fundamentals
While valuation should still mean SPX resistance near 2128, this is an improvement from last week and too close to 2015 highs not to test. Fundamentals on the uptick. 

Sentiment
I noted quite bearish sentiment despite a mild pullback. Indexes have responded appropriately. We aren't seeing it shift the other way despite the strength of the rally thus far and drop in safe havens. 

Timing
One concern to this move is that 5/26-31 area is turning into a high. For June, watch for turns near 6/7-9, 6/13-14, then 6/28 (mild). 

Timing model

Last timing model post from 4/30 gave these dates for May:

May (easier than April)
5/9 Model A & B
5/26-27 Model A
5/31 Model B

5/9 turned into 5/10 high (+1 trading day)
5/26-27 high, 5/31? 

But if market keeps steaming higher then 5/26-31 will look like non event or a miss. We'll see. My bias at the end of April was that at least one of the two areas would be lows, and that was wrong. It takes more work to get direction on these, and I just don't have the time. 

June
Model B 6/7 medium
Model A 6/8-9 medium

Model A 6/13-14 medium strong

Model B 6/28 mild

So basically 6/7-9, 6/13-14, then 6/28 mild. I would like at least one of the first two areas to be highs, but by record on bias on these not great this year. 

Safe havens

Sum
Safe havens so far supporting move in stocks. TLT not dropping but looks like it will open below the JuneP. GLD cracking, and both VIX and XIV confirming the move in risk assets.  

TLT
Several weeks of chopping in a range, with 3-4 week moves on each side. 

At this point I'd say looks like TLT opens below JuneP, although still above the Q2P that held exact on the 5/18 low.

GLD
2016 high on 1HR3 exact, then a a break break of YR1 with 1HR2 also looking like resistance. 

The 2nd break of MayP started the biggest drop of the year thus far. This was of course in combination with the high reached on 1HR3. With RSI near full oversold, probably the Q2P if tagged will try to bounce at least as a first move. 

VIX
It will be interesting to see if VIX confirms new stock highs (ie trades under its 2015 low). 

Look at that bar on 5/19, very bearish from the candle view. That suggested VIX lower and stocks up - VIX right again!

XIV
Along with RTY / IWM YP, XIV YP / 1HP area an interesting level to watch.

XIV correct with pullback and clear hold of MayP then UP.

USA main indexes

Sum
Last week 2 indexes above long term levels, 1 testing, 2 below.
This week 4 indexes above long term levels, 1 below.
That is a significant improvement and genuine bullish development per The Pivotal Perspective.
Now to watch to see if USA small caps ie RTY can clear too.

There are 7 charts below but I could NDX and COMPQ both as part of the Tech set and INDU and COMP as the Dow set. 

* * * 

Quick version this week. Cash indexes and long term pivots only. There is only one more trading day of May pivots anyway. 

SPX
This looks like a near enough test, hold and then very bullish launch of the YP / 1HP area. Targeting YR1 2163.

NDX
Despite a break and then 4 weeks under the YP, last week recovered in impressive fashion. Not shown on this chart is that the Q2P held on the recent lows.

COMPQ
A bit weaker than NDX but basically the same move. Of course better for COMPQ to stay above its YP from here. 

INDU
To my eyes the red 1HR1 / YR1 is calling the price like a dog, "come here, INDU, come." 

COMP
Also a near test of YP like SPX. This index is giving very good signals per the weekly close. 

RTY
If RTY can join the other indexes above all pivots then we really should see a test of the 2015 highs in INDU and SPX. 
 

NYA
What an interesting move. After rallying to its 1HP / YP combo there was a 4 week stall, then a jump above. After a pullback the 1HP held for 3 weeks, first by price then 2 weeks by close. Then launch back above! This is quite a bullish development. 

Valuation and fundamentals

Check tag for prior versions. Noise in this data but reporting from WSJ

Increase in earnings estimates from last week; SPX forward p/e at 17.75, only up .24 from last week's 17.51 with a jump in price. SPX total earnings per "share" were near 117 late April to mid May have jumped to above 118. 

So for now 17x support 2010 and potential 18x resistance at 2128. This is only a few points from the all time high and seems very doable. I still think unlikely that smart $ will pay above 18x forward earnings especially with election and FOMC uncertainty, but if 18x is about at the high then the market can test and pop all the stops up there too. 

*

Yardeni's report of the Citigroup Economic Surprise index also poked up. This could be noise or start of an improving trend; hard to tell right now. Follow through into positive territory would be very bullish if that happens. 

Total market view

Last week: "It is very likely that USA indexes will test MayS1s, and then we'll see what happens from there..." and "Also, NQ is barely holding on to its Q2P, and cash indexes NDX and COMPQ are a bit above Q2Ps as well. For now they are holding on, but if these break then tech indexes will be below all pivots!"

SPY, DIA, IWM and NYA all tested (or came close enough to count) to MayS1s last week, and the tech set held the Q2P with lows near exact on the cash indexes. NQ held Q2P on daily close for 7 trading days in a row. 

Total view from here
Markets are quite mixed across the board so maybe the sideways range continues. Dow and SPX remain above long term levels, but the Tech set and Russell are below. TLT is up, yet VIX is down. Valuation should cap upside, but crowd is already bearish. Etc. 

Last week I was expecting a move to USA main index MayS1s and said to watch the Tech set Q2Ps. Well the MayS1s held bang on the lows, and the entire Tech set (NDX, COMPQ, QQQ and NQ) held their Q2Ps too. 

This coming week I really don't have a bias. If the bounce was for real then we should see stocks higher, VIX lower and perhaps TLT back under its MayP too on Monday. Most stocks have more to go before reclaiming MayPs however. If bounce was just an option expiration move then TLT bid, VIX up from its MayP and stocks back down. Also, it will be interesting to see if NDX can reclaim its YP because this has been part of the concern for stocks since late April. 

Pivots
A lot of mixed bags. 5 USA mains quite mixed long term trends with 2 above, 1 testing and 2 below; medium term trends also mixed being above Q2Ps but below MayPs. 

Safe havens as a group remain oddly mixed as well, with TLT above all pivots yet barely, and VIX just a fraction from reclaiming status of below all pivots. It is an odd market when the strongest trends are bonds up and VIX down but that's how it is.

Some of the global indexes (which I last addressed here), most notably FXI and EEM had more of a drop from the April highs to recent lows.

Other technicals
Last week I pointed out the downward sloping weekly 50MAs on many indexes that had acted as resistance. Last week's bar on many indexes is open to interpretation (ie not clear, a weak bounce in downtrend or key low depending on your point of view). 

Another level to watch is the SPX monthly 20MA, especially as we approach the end of the month. Right now that is 2040 SPX. 

Valuation and fundamentals
To me these should cap upside, but less clear is how much more they will pressure the downside.

Sentiment
Last week the number of bulls on AAII individuals was nearly the same as when the market was at its 2/12 area low. Put-call has made a rapid rise to relative high area. The crowd has become quite bearish in a mostly sideways and mild pullback, which leads to days like Friday with fast squeezes to the upside. 

Timing
There were two dates / areas for May, 5/9 and 5/26-31. 5/9 gave a key high 5/10 (+1) trading day. I'd rather 5/26-30 give some sort of low but have to say 5/18 looks good as a pullback low per the pivots so far. I'll do dates for June next week. 

Safe havens

Sum
TLT held Q2P last week, and after 1 day break of MayP came back the next day. GLD after a high on 1HR3 exact broke its MayP. VIX MayP interesting level to watch for next week, should help confirm more bounce in stocks if any lower, or show that stocks should be lower if another lift from the pivot. 

TLT
After the power move really from the end of December to early February, TLT has been consolidating in a range. Daily chart nearly tested MayR1s but didn't, but did hold the Q2P near exact and recovered its MayP the next day. 

GLD
High on 1HR3 near exact, but holding 1HR2 as support. Daily chart tried to hold MayP then broke.

VIX
About 9 weeks of sideways. Watch VIX MayP next week.

XIV has been quite strong since the 2/11 low near YS1. In April only 1 day below the monthly pivot, and May all above the level which held exact last week. 

USA main indexes

Sum
Prior long term: 2 indexes above long term levels, 1 still somewhat testing but weak and about to crack, 2 below. 
Current long term: 2 above, 1 testing and inconclusive, 2 below. 
So the one change is that an index could have broken but didn't but not too much different.

Prior medium term: Only 2 trading days in May did any USA index trade above its MayP, and spent all the other time below. On Thursday 4 indexes tagged and held MayS1 areas, and the tech set held Q2Ps. 

Bottom line long term trend remains quite mixed, and medium term may have seen a decent trading low with pivots on all 5 main indexes holding last week 5/19. A strong market will follow through and recapture MayPs. But if bounce was just an option expiration squeeze to destroy some puts, we'll see markets lower early next week. 

SPX / SPY / ES
SPY and ES daily chart views look like healthy hold of monthly support while above all other pivots. SPX weekly chart though open to interpretation given the wicks and shape of the bar is still above long term pivots. 

NDX / COMPQ / QQQ / NQ
NDX and COMPQ remain below long term pivots which is bearish. But including the daily views to show the lows very near the Q2Ps (the levels I said to watch last week). QQQ also rebounding from its Q2P, which is a more valid level compared to the YP which is influenced by the 8/24/15 spike. NQ held its Q2P on daily close for 7 straight trading days!

INDU / COMP / DIA / YM
Both weekly cash indexes look fine above long term pivots. DIA and YM holding MayS1s so far.

RTY / IWM / TF
RTY still under long term levels, but IWM and TF showing a very healthy bounce off the MayS1s.

NYA / VTI
NYA dipped below, but did not close below its 1HP on a weekly basis. VTI is a slightly different broad index and held MayS1s like the others.

Valuation and fundamentals

SPX forward earnings as reported from the WSJ picked up a bit; there is definitely some noise to this signal and I'm not sure how to remedy without better data from, for example, Bloomberg. 

Key point SPX forward 12 month P/E ratio 17.51, so potential 17x support at 1992 and 18x resistance 2110.

Citigroup Economic Surprise Index may have ticked up slightly but no real improvement. 

I'm not sure how much these pressure the downside, but they still should definitely cap the upside. 

Global indexes

Sum
China and Japan are leading down. NKY, Shanghai Comp and FXI already below all pivots. Any lower and EEM also will join them, and PIN (India) not far off. Last year's real dogs EWZ and RSX are doing much better in comparison, both above YPs, due to strength in oil. 

* * *

Typically I won't have time for this, but I thought it would be interesting to look outside the USA indexes for more context. First let's start with key developed market indexes, DAX and NKY.

DAX is below all pivots except the Q2P. It has been under its long term levels all year. 

NKY also has been under long term levels all year, and again below all pivots. This makes NKY among the first choice for shorts, for those who can trade this index directly (ie EWJ, which is still above MayP and Q2P). 

Shanghai Comp while so much in the media is down near lows, and again below all pivots since 5/6. 

FXI is also under all pivots. 

EEM high of year is on the YP near exact. Oh and the low close was on the 1HS1. Yup, pivots on the big turns! Testing Q2P; if that breaks, below all pivots. 

PIN (India ETF) below long term levels all year, and failed near testing 1HP. Looks like another test of Q2P on the way, if that goes then below all pivots. 

RSX Russia above its YP due to strength in oil, but now 2nd time below MayP. We'll see what happens. 

Similarly EWZ Brazil above its YP, but another break of MayP makes near term move less clear. 

E-wave

I am not really an Elliott wave person but have dabbled and if you search the tag there are a couple other posts on this topic. The bigger picture view is here and has not really changed. This view calls for an ideal high 2250-2500 SPX anytime from 2017 Q2 to 2018 Q2 to complete the bull market.

I 'think' the larger monthly W4 pullback is done in classic zig-zag pattern from the 5/2015 high to 2/2016 low; though to be fair, W4 might be continuing and theoretically we could see lower lows than 2/2016 and then proceed to a W5. But if my view is correct, then W5 is already in the process of unfolding.

Already it is not a strong W5 since it hasn't powered up to new highs. But it still could be a respectable move, itself subdividing. Of course the hassle of Elliott wave is the alternative count, which is why I prefer the simplicity of pivots, but the alternative is a very bearish W5 failure at the recent highs and bear market commencing from here. I will shift to this if all five USA main indexes break their YPs, but not before.

Let's say preferred view is correct, that monthly W4 is over on 2/2016 low, and W5 has begun. To clarify the context, this means the move from February 2016 lows to recent highs is itself the first portion of a larger W5 on the monthly chart. 

So now we can proceed to the daily chart view which was recently discussed here

E-wave is all a matter of labeling, but rather than get too bogged down in versions of counts I will just post what I think has happened and you are free to agree or disagree. 

The main point here is that on the daily chart view, W5 failed at 38% of W1 which is typical failure level, at the 5/10 high. (Confused? I am talking about the daily chart pattern now, so this is just the first portion ie daily W1 of the monthly W5.) Failed W5s mean a harsher drop to follow. This drop will form some zig zag ABC pattern, and in total make W2 of a larger pattern. 

Anyway, this is what I think is happening. This will imply a break of MayS1s on USA indexes, and probably higher than MayR1s on TLT. In other words, near term bearish though not giving up on bull market just yet. Once this pullback low gets established, we should see a quite decent and steady rally, possible to new highs. In E-wave terms, this rally will be w3 of the monthly W5, but we need w2 of W5 first. If w1 of W5 just completed, it is the w2 drop that we are about to see. 

Total market view

From last week: "I would prefer a deeper drop for risk assets, at least down to MayS1s, but at this point it looks like the market is more likely settling into a range instead of making a sharp decline."

Total market view from here
Pivots showing near term weakness in stocks likely, although severity will be something to monitor. Further declines on both NYA and ACWI, as well as the tech set under all pivots, would point to a bigger drop. Other technicals, valuation, fundamentals and timing are all strengthening the bear case. Yet sentiment has turned quite quickly bearish as well on a relatively mild drop so far. It is very likely that USA indexes will test MayS1s, and then we'll see what happens from there per the Pivots section below. 

Pivots
Given Friday's clear rejection of MayPs on all 5 main USA indexes (see that post for details), a move to MayS1s is extremely likely. But what happens after that will be something to watch. If VIX remains tame and TLT stalls at its MayR1, then maybe it is just going to be a choppy sideways period. But if VIX gets in gear and TLT moves above its MayR1, then stocks are in larger trouble. 

The other important development last week was the break of NYA YP, which coincided with selling from the ACWI (global index ETF) YP as well. Institutions not defending key support is usually bearish for the market, but both of these are still near enough to 1HPs for a save. These are important levels to watch from here. 

Also, NQ is barely holding on to its Q2P, and cash indexes NDX and COMPQ are a bit above Q2Ps as well. For now they are holding on, but if these break then tech indexes will be below all pivots! 

Other technicals
Several USA and global stock indexes failed at falling weekly 50MAs recently. I think this is a big deal, especially combined with the slope issue. Breaks of rising MAs can come back, but rejections from falling MAs show a real trend. Also, in bull markets pullbacks to rising weekly 50MAs are fairly rare. For example on SPX, after tagging a flat W50MA in late May and June 2014, there was only a few tags for the next 3 years: 11/12 and 11/19 weeks of 2012, 10/13 and 10/20 weeks of 2014, and then two tags in mid 2015 before the breakdown. So really there is potential for the start of a much larger move here. 

List of indexes I track that are dropping from falling weekly 50MAs (most in last 3 weekly bars)
USA mains: NDX, COMPQ, RTY, NYA
USA other: SOXX, XLF, HYG
Global: ACWI, EEM, PIN, EWJ, EWG

If time permits I may do another separate post on the global indexes like I do for USA mains and safe havens. 

Meanwhile TLT looks fantastic lifting from a nicely rising weekly 20MA, and for that matter both 20 and 50MAs on quarterly, monthly, weekly are all nicely sloping up, and daily MAs starting to turn up again too. 

Valuation and fundamentals
See today's specific post. These are not helping stock indexes right now, with valuation higher after the drop. 

Sentiment
I was quite right to point out sentiment extremes 4/7 and 4/21, summarized per this 4/30 Total market view post. But sentiment has been quick to turn the other way with daily put-call sharply rising back to relative highs, ISEE very low on Friday, AAII manager exposure dropping fast, and AAII individuals nearly as bearish now as they were in January. It would take more time to do the detailed analysis to say when these are really extreme but if you want examples of a method please check prior sentiment tags.

Timing
April timing was confusing, even for me, just because there were more dates than usual (about one a week). But May is easier with just a few dates and really two windows to watch. As listed on 4/30

5/9 Model A & B
5/26-27 Model A
5/31 Model B

So it looks like 5/10 was the turn (+1 trading day) and this could be an important lower high. I would prefer for 5/26-31 dates to be lows, although that doesn't necessarily mean going straight down from here. 

Safe havens

Sum
If you weight TLT in your analysis, the clear conclusion is that stocks are due for a larger pullback as new highs are extremely unlikely given strength of bonds. However, if you weight VIX which remains below all pivots, just another stock dip to be bought.

I usually like both of these as important confirming indicators, so the mixed messages are frustrating. My interpretation is this: as long as VIX is not signaling trouble, then stocks are more likely to chop around in a range instead of making a sharp drop. Perhaps even TLT will reach its MayR1 and pull back from there; summer trading starting about now anyway. But if VIX starts to move (like early January and February, clearly lifting above Q1P, and especially 8/19-20 2015 jumping above 3 pivots in 2 days) stocks will be at risk for a bigger decline.

TLT
Wow does this look strong. Above all pivots since 5/4 so clearly smart $ has been selling stocks and parking it in bonds. That is not a scenario where USA indexes are likely to make new all time highs. Near term watch MayR1; above that TLT green light to re-test the YR1 / 1HR2 high area. 

GLD
The high so far on 1HR3 exact. Earlier drops from the YR1 level quickly came back and here again GLD was below its MayP only 1 day. GLD traders should watch to see if that holds from here. 

VIX
VIX remains quite low and not at all worried, below all pivots and even lower than early May. This is odd, and means stocks should come back or we are about to have big jump in VIX from here. 

XIV remains under long term levels, so I cannot explain why VIX is so low yet XIV is well off 2015 highs. Also note XIV rejection of Q2R1 on 5/11, though unlike stock indexes it remains above its MayP. 

USA main indexes

Sum
Last week 2 indexes maintained long term uptrends, 1 was testing, 2 were bearish (ie below long term pivots).
This week NYA, the index that was testing, broke its YP but still near enough its 1HP to not have a definite call. Still, a YP break is bearish and enough to say a negative status change compared to last week. 
All 5 USA indexes had clear rejections of their MayPs on Friday, and with 2 failures above the MayP we really should see the MayS1s at least. Then we'll see what happens from there. 

Levels to watch are the NYA 1HP, NDX, COMPQ & NQ Q2Ps, and the MayS1s. 

* * * 

SPX / ES / SPY
SPX set remains comfortably above long term levels as shown most clearly on the SPX weekly chart with the yearly and half-year pivots only. SPY and ES show rejection from the MayP which invites a move down to MayS1 at least. This has been my preferred scenario for all of May, but SPY held positive for the year as shown by the red line and bounced from there. Going negative would probably bring more selling and a quick move down to the MayS1, then we'll see what happens. 

NDX / COMPQ / QQQ / NQ
Another week below the YP / HP on both cash indexes. QQQ appears to be above but that is really just the issue of the 8/24/2015 spike on the pivot. NQ is a better indicator here, and it is well below the YP, 1HP and MayP but holding the Q2P. Any lower and it will be below all pivots! Cash indexes are also above their Q2Ps (not shown) and this will be a big tell for the market.

INDU / COMP / DIA / YM
INDU like SPX above long term levels, but COMP clear as a bell low near YS1 and high near 1HR1. Sure the wicks exceeded on each turn but the closes very near the levels. DIA and YM rejection from MayPs like the SPX set and above the other pivots. For these we should see a move to MayS1s then we'll see what happens from there. 

RTY / IWM / TF
The reason I shifted more bearish after 4/28 was the "bell ringing" at the top on the Russell futures; clear as a bell high and rejection on the 1HP. The RTY set is well above the Q2P but second time below MayP should see MayS1 at least. 
 

NYA / VTI
NYA below its YP, but a very slight break of 1HP is not conclusive. NYA D chart and VTI showing the MayP rejections, so all indexes moving in concert in that regard.