Total market view

REVIEW
3/18/2018 Total market view: "The question now is whether the market is entering an extended sideways period to work off the RSI overbought condition of 2017 (and let's face it after a massive trend at some point things have to slow down) or if there is more threat to risk. Points in favor of sideways range... Points in favor of more downside risk... Any weakness in smaller timeframe charts may be a prelude to a further drop. This will be especially the case if Dow shows rejection of its MP."

Dow had clear rejections of its MP on 3/19 & 3/21 and mostly lower from there. Note scenarios above per 3/18 - sideways or down, and no significant upside scenario listed. That said main index lows of April have mostly tested and held the February lows thus far. 

SUM
Once again in 2018, "resistance matters" with last week's bounce testing or nearly tagging new monthly and/or Q2 pivots on SPY, QQQ, DIA and IWM and sharply lower from there. None of the main indexes reclaimed status of above all pivots on the 4/5 high; essentially, a similar move from the February highs in the sense of monthly (and in this case, some quarterly) pivot rejections.

Volatility as measured by VIX, VXX and average true range remains high. VIX appeared to have a drop from its monthly pivots on 4/5, and was below its Q2P; this was not confirmed by VXX which stayed above both its monthly and quarterly pivots. Average true range (14 bars) of daily SPX is 50 points! In 2017 the highest value was about 18 points, and spent much of the year in a 12-15 point range. 

Bonds, while off the lows, have not been much help as all major categories: TLT AGG LQD HYG are negative YTD. 

2017 hot trades SMH and XBI have tried to clear major highs of 2000 and 2015 respectively - and despite poking above for a few days the larger move on these has been down.

Many overseas markets are mixed in a similar fashion as USA main indexes - still above long term Y and 1H pivots, but under new Q2 and monthly pivots. 

Anything above all pivots? Of the items I track currently only GLD, but without the broader participation of GDX and SLV.

Cryptos continue bloodbath as warned by benchmark BTHUSD below its YP from January and pivotal leader ETHUSD breaking down below all pivots in March.

What next? Last total market view suggested that it may be helpful to have larger amounts of cash ready to commit to the next good setup which frequently happens near the end of quarters and beginning of new ones. While some indexes appeared to be more hopeful on the bull side on 4/4 (SPY test and hold 1HP and rising D200MA), the inability to clear QP and MP (Q2P and AprP), along with falling D20 and D50MAs, invited selling. In other words, many indexes are in mixed fashion (above some levels, below others). As long as this continues better to stay on sidelines or continue to short resistance as this seems to be the easiest play in 2018 thus far. One could also go with current pivotal leader GLD although even this seems to have been hopeful a few times this year only to fade near top of range. 

The big question is whether the big levels on USA mains - YP, HP and D200MA will continue to hold. Maybe not - but unless you shorted say DIA on 3/14-21 and/or USA mains 4/5, entries are tougher and could be subject to big short squeezes with put-call quite high and indexes near major support of daily 200MAs and weekly 50MAs. 

PIVOTS
USA main indexes: SPY, QQQ, DIA and IWM above YP & HP, below QP and MP. NYA also below HP - watching its YP as a break below that would be a troublesome sign.

Sectors of note: SMH and XBI failing below 2000 and 2015 highs respectively. XLF stopped at its quarterly price high. Does not help the bull side with these charts starting to look like scramble to get out.

Global developed: EFA and EWJ in similar pivot situation as the USA mains. EWG slightly under HP as well.

Global emerging: SHComp below all pivots. FXI, EEM, KWEB, EWZ and RSX all above YP and HP yet below QP and MP. INDA slight variation on this theme.

Safe havens: VXX working somewhat as replacement to XIV. VXX up near its YP the last several days, but notably still above MP, QP and HP. If VXX clears its YP then I will think more chance of breakdown of key support in USA main indexes.

Commodities: GLD above all pivots 4 of 5 trading days in April so far. USO also tried and failed to clear its MP and as of Friday like several other indexes - above YP and HP, below QP and MP.

OTHER TECHNICALS
New high new low indicator went back into caution mode on 3/23. This doesn't really work as a sell signal, but when the 10 day MA of new highs exceeds new lows it usually pays to re-commit to the bull side. This has happened twice in 2018 so far, first 2/26 to have a brief failure then again on 3/7. There is quite some work for the "all clear" signal to happen from here.

VALUATION
Some smarter commentators noting that earnings + price drop has resulted in significantly lower valuations that the January blow-off top. As long as recession signals appear unlikely then drop from highs likely to remain in -10 to -20% range. However, with Trump increasingly off the rails in haphazard fashion I think "sell in May" likely for the summer and perhaps Feb lows are undercut to see more of a -15% to -20% moment on the key indexes. 

SENTIMENT
Daily put-call highest since election on 4/4, and weekly levels starting to reach near frequent turn zones as well.

TIMING
April dates
4/2 (so far USA main index low, date listed per 3/18 Total market view)
4/13 (mild)
4/17
4/23

Vacation notice

To my dedicated readers - I'm going on a wonderful trip with my lovely wife and it's time to be away from the screen. Though I've barely missed a day since starting this site at the closure of a hedge fund in September 2015, I'm taking the next 2+ weeks completely off. Back near 4/8. 

There weren't too much people thinking about a major top in January after being massively bullish 2017 Q4 and into the start of 2018. But here at The Pivotal Perspective that's exactly how it played out.

1/23/2018 Daily comment: "There are so many indexes on or near YR1s the situation calls Jan-Feb 2016 to mind, as the only difference was that they were on YS1s. Both years started with a directional bang, reached yearly levels, and then... we shall see. That is our task now, to assess the chances of a turn here." 

Total market view

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

SENTIMENT
Not at extremes currently.

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

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

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

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

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

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

USA main indexes

Sum
4 of 5 USA mains are above all pivots. INDU/DIA closed fractionally above its MP as well, but my view considering the high and close is really not definitive. And yet once again this year "resistance matters" with selling 3/13-14 from R levels: QQQ QR3, SPY QR2, and IWM near tag of HR1. SPY, DIA and NYA highs in March are not really above Feb highs. For SPY price a bit higher but close not; and clearly lower March highs for DIA and NYA.

QQQ remains above all pivots and above YR1. This seems important to watch as other 2018 leaders that were above YR1s have failed (EWZ, RSX, XBI and SMH). 

Simple bullish scenario is DIA lifting convincingly from MP and QQQ remaining above YR1. Bearish is DIA MP break/rejection and QQQ joining the other leaders below YR1.

SPX / SPY / ES
SPX M: 10 trading days until Q & M end. That is a lot but Q chart already looks toppy so what happens with next monthly bar important and worth watching. 
SPX W: HR1 resistance.
SPY D: QR2 rejection and down all week.
ES D: Still above all pivots and MAs. A break under MAs would invest test of MP (MarchP) again.
SPX sum: One cannot be too bearish with ES chart still above all pivots and MAs. Yet "resistance matters" again - QR2 rejection 3/12-13 and down from there, with HR1 also pushing price down. The failure of 3/9 move to push up above the February high yet another message that trending environment of 2017 has changed to more range bound in 2018.  

NDX / QQQ
NDX W: HR2 high, back testing YR1 as possible support. RSI and BB divergences on M and W charts.
QQQ D: QR3 high looks like it for Q1. YR1 area important as other leaders have faded below YR1s. 

INDU / DIA
W: Chopping sideways for 5 bars.
D: Friday close above MP, but considering the high and the close this is not really enough to say clear. 3/14 break, 3/15 MP resistance, 3/16 failed rally. 

RUT / IWM
W: High test near YR1 & HR1, but no significant selling.
D: QR1 acting as support so

NYA
W: Chopping sideways.
D: Still above all pivots. 

Total market view

REVIEW
3/4/2018 Total market view: "Bottom line here is indexes do seem to be a in a bit of trouble. But 2 of 5 USA mains are above all pivots so let's not get carried away on bearish scenarios just yet. Sentiment per put-call is also quite high, highest since 11/2016 - and this may especially help a mid March rally into OE week 3/12-16. Stay nimble, and if hedging or shorting isn't your thing then you can always raise cash and focus on the few relative leaders and avoiding damage in the volatility. For this week its all about the reaction from SPY MarP."

Result - SPY started 3/5 under its MarP but rallied all day to close well above; ES version also tested and held its MP 3/7, and launch from there. 

Quick version this week - no links to charts. 

SUM
Last week the market tested and held key levels. Leader QQQ never in doubt, remaining above all pivots from 2/23 on and holding its MP (monthly pivot) and daily 50MA at the 3/1-2 lows. IWM also recovered above all pivots on 3/2 after moving below its QP 2/28-3/1. But SPY was still below its MP 3/1-2, DIA well under its MP with closes under the level 3/1-7, and NYA below QP down to test HP. Interestingly, all 5 USA mains above their MPs for the first time in several weeks on the 3/8 close was the tip for launch on 3/9.

Tech is crushing it, with QQQ new highs, SMH rocketing, XBI participating and KWEB moving back towards 2017 highs as well. Sentiment per put-call remains doubtful of this rally; heading into OE week and those puts will be obliterated. 

Perhaps overbought short term charts will give some pause, but generally markets should go higher before another major top. Like the 1/26-29 high and then 2/26-27 move, typically there are multiple main indexes on resistance levels at the key turns. That isn't the case as of Friday's close, with only QQQ already zooming to HR2.

VIX test and rejection of YR3 while coming down to close under YR2 on 3/2 also worked well as a confirming signal for stock buys. VIX nearing 1/29 breakout level and YP, HP and QP so keep an eye on that with the week ahead. 

Bonds remain glaringly weak and the asset class to avoid, as I have consistently said all year. Aside from volatility plays, only GLD acting as a safe haven, and it spent one day above all pivots in March and failed the next day. 

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

PIVOTS
USA main indexes - All 5 USA main indexes closed above all pivots on 3/8. Sometimes it pays to have a simple method. 

Sectors of note - SMH new high on 3/6 paved way for QQQ to follow 3/9. Both SMH and XBI testing YR1s with QQQ above its YR1.

Global - Some recovery last week as well, with SHComp back above YP, HP and MP (not QP). Benchmark ACWI fractionally above all pivots 3/5, then tested and held its MP on 3/7. FXI recovered above all pivots on Friday as well. EWZ and RSX cooling off and seeming to have trouble to really launch above YR1s. If USO can continue above its MP then I expect these to go higher in weeks ahead.

Safe havens - Of the bond vehicles I track only HYG above its MP, others below all pivots. At some point there may be a bounce but the headache to try to catch that is not worth the missed opportunities in what is going up. Also, I'd rather be long risk / financials than short bonds despite the obvious weakness due to event risk. VIX and related vehicles has moved well this year so a test of the YP area if we see signs of slowing momentum in stocks could be worth another trade. At this rate, however, it seems more likely that VIX will return under all pivots before another big spike. 

Commodities - USO fractionally above MP, above the others. DBA backtesting its YP, above all pivots. DBC also above all pivots. 

Currency and cryptos - BTCUSD YP area was the definitive wall before a big drop. ETH just testing key pivot cluster that needs to hold for any crypto rally this year.

OTHER TECHNICALS
New high new low indicator signaling to side with bulls again. 

VALUATION
SPX back near the 10 week avg of 18X forward P/E; the slope of that level is rising rapidly. 

SENTIMENT
Seemingly a lot of warnings about corrections in recent weeks. Didn't we just have one?

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

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

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

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

March dates
3/6 (minor) - minor pullback low
3/8-9 (strong) - big up
3/16
3/22-26

Commodities

Some of the smart money sources I trust, especially Jeffrey Gundlach, have been on to commodity idea from the beginning of the year. I recently retweeted something similar from Paul Tudor Jones. 

Keep in mind I am not simply jumping on bandwagon here as I have been thinking this way too from mid January: "Also, since commodities have been near the bottom of asset allocation models for many years, think this could be year for significant improvement. Not sure the best way to play this but will likely benefit RSX and EWZ."

EWZ and RSX still at the top of the leaderboard, both above all pivots and ~10+ YTD%. 

Most of us aren't trading commodity futures so what are other good vehicles? For me that means base ETF with options and preferably 3x bull and bear versions from Direxion, though due to unpopularity of commodities this is more rare. Basically oil, gas and metals are the best vehicles. This makes me think the best move will be elsewhere. 

USO oil
UNG gas
GLD is commodity yes, along with GDX and SLV but typically I consider these in safe haven section

XME could watch; limited options trading, no levaraged ETFs that work well
DBC commodity index that mostly moves with oil (though at top of list for ETF commodity volume, not a lot of options so not very tradeable)
DBA agriculture index, also not many options

Leveraged ETFs do exist but lower volume so watch the spreads before buying. Also it seems most of these closed to new creations from 2011 so that cannot be a good thing.

There are individual ETFs.

CORN
WEAT
SOYB
CANE
TAGS (low volume)
NIB 

DBB
JJC

Unfortunately time does not permit me to track these in detail. Let's look at DBA for agriculture in general.

Q
Up bar after doji; 2016 Q3 also tried but failed. This is a painful downtrend below all falling MAs but rallying from low level. 

M
Buying at last monthly close low, and starting to poke above 10MA. Needs to rally past 20MA to really get moving. Could happen though. 

W
MACD going positive has been a long string of disappointments. Usually these have occurred at falling MA resistance. This time 20MA has flattened out and rallied above 50MA. Still near upper BB where many rallies have failed.

DBA W
The difference this time is The Pivotal Perspective. DBA starting to move above all pivots for only the second time since June 2016. Before that was 2014 rally. It would need additional gains to really look like lift-off from the YP.

D
Jump above all pivots on Friday. If you look carefully you can see sign so of pro accumulation 1/24-2/27; dips quietly bought, support holding. Granted the RSI and volume spike doesn't help the bull side, but if move is for real the YP will continue to act as support. 

Total market view

REVIEW
2/24/2018 Total market view: "Though I am expecting more volatility in general in 2018, and more trouble at various resistance areas, now the most likely path seems to be tech strength and high test, which will pull other indexes higher. In addition, some indexes like SPY that are still below FebP are on track to open above MarP. An expansion of risk assets above all pivots would support this more bullish view. I am still concerned about the quarterly charts, and don't think 2018 will trend the same way as 2017. But for now I'm playing for the QQQ YR1 area high test. New March pivots in play from Wednesday will be easy clues on further strength or weakness."

Result was QQQ YR1 test then rejection. SPY opened above MarP but broke on 3/1 and remained under it 3/2; DIA and NYA were also under MarP.

SUM
2 months into 2018 and so far it is very different year than 2017. Referring to risk assets, 2017 saw USA, Europe, Asia and other emerging markets all participating in a global rally with a minimum of volatility. The only levels that mattered were support - monthly pivots, on the rare occasion that they were tested, were usually buying opportunities. SPY only had 1 day with a close below a QP. VIX was under all pivots for most of the year. Similarly, pullbacks to moving averages were buys. 

While several long term levels (YP HP D200MA and D100MA) tested and held on 2/9, thus far the levels that have mattered more have been resistance. This was just not the case last year as most indexes ignored resistance areas or had only minor pauses for a few days. In January 2018 it was striking how many indexes across risk assets were testing YR1s. Daily comment from 1/28/2018: "There are so many indexes on or near YR1s the situation calls Jan-Feb 2016 to mind, as the only difference was that they were on YS1s. Both years started with a directional bang, reached yearly levels, and then... we shall see. That is our task now, to assess the chances of a turn here." 

And so far that late January high has been *the top*, with only the few tech leaders along with EWZ and RSX near earlier highs or higher. Most benchmarks, SPY, DIA, etc, are far from 1/26 highs. 

Last week, while QQQ did rally to near high test and YR1, again, the levels that mattered more were resistance: SPY and DIA FebP smackdown, and QQQ YR1 rejection. VIX confirmed trouble with a launch above YR1. 

2/27/2018 Daily comment advised locking in some gains and urged caution in global names especially China. 

Heading into March that pivot status for risk assets is disparate. Still a handful of leaders that have managed to hold above all pivots:

QQQ, IWM (in surprise move Friday 3/2)
SMH, XBI, KWEB, KRE
EWZ, RSX
VIX

But everything else in mixed condition, or worse: SHComp, Nikkei 225, DAX, UK FTSE all below all pivots. If at hedge fund with global desk the obvious trades would have been short FTSE (below all pivots 2/2), then DAX (YP test from underneath, below all pivots 2/26 as SPX and INDU testing FebPs); now watching to add to shorts on NKY (or USDJPY another good one below all pivots from 1/11). Writing to presumably American audience, if playing along EFA is a good vehicle - ex-USA developed benchmark index ETF, with options and 3x bull bear ETFs available - currently below MarP, QP, weak bounce from HP but break below that would be good risk reward short. 

Benchmark SPY is testing its MarP and tagged the level on Friday but did not clear. Consider this and the theme I have been emphasizing - if resistance is mattering more in 2018, then we are about to see a drop from this level.

Of course, bonds not helping with all indexes I track below all pivots. Metals continue in trading rate, and cryptos on the weaker side with BTCUSD facing trouble at its YP several times.

Bottom line here is indexes do seem to be a in a bit of trouble. But 2 of 5 USA mains are above all pivots so let's not get carried away on bearish scenarios just yet. Sentiment per put-call is also quite high, highest since 11/2016 - and this may especially help a mid March rally into OE week 3/12-16. Stay nimble, and if hedging or shorting isn't your thing then you can always raise cash and focus on the few relative leaders and avoiding damage in the volatility. For this week its all about the reaction from SPY MarP.

PIVOTS (expanded first of month)
USA main indexes - QQQ above all pivots from 2/23 on; IWM recaptured above all pivots 3/2. NYA below QP reflects weakness in global names. Additionally, more global DIA in worse shape than SPY.

Sectors of note - SMH and XBI above all pivots and both testing long term highs; 2000 top for semis and 2015 for bios. XLF also failing at 2007 quarterly close high. KRE is recent addition as I happened to notice it jumping back above all pivots. 

Global developed - Trouble here. And the base indexes are even worse than the ETFs (DAX below all pivots, EWG still above YP). 

Global emerging (last but not least, probably this should go at the top of the list) - Trouble in China but commodity economies EWZ and RSX among leaders of 2018 so far. Both above all pivots and both testing YR1s. 

Safe havens - VIX above all pivots from 1/29 to 2/28; now below MarP. Bonds weak as pivots main so clearly obvious from the beginning of the year. Metals in range; GLD shot at reclaiming above all pivots could be re-entry long. 

Currencies - BTCUSD failing at YP, again. LTCUSD stuck under pivots. ETHUSD leader and still holding on to MarP, above all pivots. 

Commodities - Trying to expand this section as time permits because a lot of smart $ (Gundlach for one) has already been on to this as major theme of the year, reminding me of emerging markets 2-3 years ago. USO already watching, occasional glance at UNG. DBC testing MarP from underneath, otherwise above YP HP and QP (seems to be mostly correlated with oil). DBA (agriculture index ETF) spiked above all pivots on 3/1 for the first time in about a year. I'll do a separate post on this soon. XME metals and mining ETF also above all pivots. 

OTHER TECHNICALS
Daily new high new low chart about to invalidate bull confirmation from 2/26. 

I have been pointing out quarterly chart threat for weeks on USA main indexes. See the chart page for those. Per this week's theme, resistance matters - and this means pivot & resistance levels per this system, as well as Bollinger bands. 

VALUATION
Interesting that SPX faded back under 18X (well, 10 week avg of 18X that i use to smooth out chop). This means the only period of SPX above 18X was 2017Q4 - Jan. It may start acting as resistance again as well, as it did for 2017 Q1-2 when tested.

SENTIMENT
Per put-call, highest since election. Probably bulls not going down without fight and if you find yourself too bearish consider both QQQ and IWM (!) above all pivots. Relative weakness usually means easier shorting so right now that is anything below at QP than breaks a HP, or SPY at MarP with tight risk control.

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

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

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

Didn't have 2/26 unfortunately

March dates
3/6 (minor)
3/8-9 (strong)
3/16
3/22-26

Safe havens

Sum
VIX has been quite correct to be warning of trouble from 1/29 on. Considering the USA main index top was 1/26 (Friday) that is pretty awesome. 

Due to 2017 low range, the higher VIX is bouncing around yearly levels quite often since the spike. 1/24 YR3 rejection, 2/26 YR1 test, 2/27 YR1 launch, 3/1-2 YR3 test, 3/2 YR3 rejection. Currently VIX below MarP but still well above YP, HP and QP. 

Bonds are all weak, with a multi-week run below all pivots for most. So far the TNX high very near YR2 but back above all pivots on 3/2. 

Metals are mixed. GLD looks like it could recover above all pivots easily, and this would likely get GDX and SLV in gear. 

VIX
D pivots only: Leap above all pivots 1/29 was the risk off screaming sell. Above all pivots 1/29-2/28; still above YP, HP and QP. Below MarP gives bulls a shot at bounce.
D: 3/2 YR3 rejection and close under YR2 also helps the bull side.

TLT
D: Bond bloodbath continues, some bounce from oversold levels but could not recapture YS1 on close. MarP resistance so still under all pivots as it has been since 1/18.

TNX
High on YR2 so far, but back above all pivots on 3/2. 

AGG
Stabilizing near HS3 but still under app pivots. Weak. Under all pivots from 1/9.

LQD
YP break on 2/1 and from there below all pivots. 

HYG
Break of YP 1/30 and from there below all pivots. Under MarP and under YS1 so far this month. 

GLD
D: Wouldn't take much to recover above all pivots. Nice rising D50MA as well. 

GDX
2nd low near YS1 / HS1 combo. Still under all pivots though. 

SLV
Under all pivots but would not take much to clear one or more of those levels. 

Global emerging

Sum
2018 leaders RSX and EWZ above all pivots but both testing YR1s to watch. KWEB also recovering status of above all pivots after FebP rejection towards the end of the month. 

While 2018 great for emerging markets especially China and India, signs of trouble with SHComp below all pivots (fractionally but still). FXI well under MarP but still holding QP; EEM also MarP resistance so far. Vanguard version VWO (not shown) 2 rejections from YR1 like many other indexes. INDA massive gains in '17 but now under MarP, QP and HP. 

SHComp
Q: Quiet recovery from 2016 low, high on current bar. 
D: Under all pivots. 

FXI
D: Holding QP, below MarP. 

KWEB
D: Better and still above all pivots (hard to see but 62.05)

EEM
D: MarP resistance. 

INDA
D: Below MarP, QP, HP. Indian indexes relatively better, so think a currency issue. 

RSX
D: Testing YR1 area again. Above that QR2 and so far high of year on QR3. 
D pivot only view: MP hold and rising D50MA. If looking for buys this is what we want to see. Pay attn to YR1 above and see if any follow through. MACD is positive, RSI not overbought. 

EWZ
D: Testing YR1. 
D: Above all pivots. 

ACWI
D: Below MarP, holding QP.

Global developed

Quickly here - EFA EWJ EWG. Glance at FTSE, NKY, and DAX without posting charts. 

EFA
D: Under MarP and QP, holding on to HP. 

Not directly connected but FTSE well under all pivots from 2/2 on! (chart not shown)

EWJ
D: Also failed at FebP on the lower high, back down to QP. Under MarP. 

NKY not shown but below all pivots! EWJ relatively better due to currency perhaps. 

EWG
Under MarP, QP and HP! 

DAX not shown but also below all pivots!

Sectors of note

Favorite trading sectors: SMH XBI XLF KRE (recent add) and XLE.

Tech clear leader with QQQ, SMH and XBI all above all pivots. But the sectors battling and key prior highs. XLF giving up while KRE strengthens echoes the IWM theme. XLE avoid or short. 

SMH
Q: Battle at 2000 top. SOX index is similar. 
W: HR1 high twice, HP low. 
D: Holding above all pivots, but red line at 2000 highs also worth watching. 

XBI
XBI M: Battle at 2015 high.
XBI W: HR2 / YR1 high, HP low; testing HR1. 
XBI D: Above all pivots and just fractionally above 2015 high of 91.11. Don't know why different prices on these charts!

XLF
Q: Wall Street's favorite sector resistance at 2007 quarterly close high. 
W: YR1 resistance 2nd time. 
D: Holding positive for year but under MarP. 

KRE
D: YR1 resistance all year but above all pivots and could go for highs again. 

XLE
D: Under all pivots and significantly negative YTD. Avoid. Not sure worth shorting with oil holding up because these should be somewhat correlated. That said under all pivots is always a short consideration. 

USA main indexes

Sum
2018 is turning out to be quite different than 2017. In 2017, all 5 USA main indexes were above all pivots for the majority of the year. There was only 1 day that SPX closed below a QP. The YP and HP levels were not even touched. Obviously 2018 is a much different story. The end of January indexes reached YR1 and HR2 levels across the board, and those were seriously sold. After reaching major support levels - YP, HP and D200 and D100MAs on the main indexes -  there was a decent bounce. So far this has also failed at resistance in the form of NDX YR1, SPX and INDU monthly pivots. 

It is natural that after a massive trending move that the market should settle into a range. The USA main indexes cannot continue to power up outside quarterly Bollinger bands forever. It is these charts in particular that suggest limited upside and professional selling on rallies. So this year we have seen selling at resistance and pivots (again compared to 2017 when INDU melted up through yearly resistance without any selling at all, and any pivot touch was rare and a massive buy). The question is whether the dip buyers continue to prop up the market for an extended sideways period or if there will be a faster rush for exits. 

Current leaders QQQ and surprise IWM back above all pivots. NYA the laggard, below QP and MarP, reflecting weakness in global names. DIA well under MarP and won't recover so easily. SPY bang on its new monthly pivot. 

More bullish scenario for next week means rally above SPY MarP, QQQ pushing back towards highs and IWM continuing short squeeze. Bearish is SPY rejection from MarP and DIA testing QP, potential NYA HP break. 

SPX / SPY / ES
SPX Q: This chart still the main concern; 4 weeks until close. Upside over.
SPX M: Down month so far, and nice rebound from 10MA.
SPX W: I don't think people really believe these pivot levels were established 12/31/2017 when looking at this chart. High HR2, low YP, 2nd high YR1. 
SPY D: Holding positive YTD at red line but under MarP. Note Feb rejection bang on MP 2/27+.
ES D: Friday could have been worse, but resistance at MarP and falling D20.
SPX sum: So far the high of the year is HR2 and the low is YP, both near exact. The lower high reached 2/27 was FebP and near HR1. Currently MarP is resistance and that level will be a key tell for the week ahead.  

NDX / QQQ / NQ
NDX Q: Still soaring outside the Q Bollinger band. 
NDX M: Massive rally from 10MA; down for March so far. 
NDX W: YR1 resistance 2nd time. But holding HR1 as support gives another chance at test. 
QQQ D: YR1 rejection pretty clear but maintaining above all pivots from 2/23 on. 
NQ D: Major support at rising D50, D10 and MarP. 
NDX sum: Comparatively much stronger. However, YR1 has acted as resistance twice. If MarP breaks then major high likely in. Above the MarP gives some chance at re-test.

INDU / DIA
INDU Q: Despites the drop still entirely outside the BB!
INDU M: Down for March.
INDU W: YR1 high, 2HP low, near HR1 lower high.
DIA D: FebP exact on the lower high. Below MarP and down for 2018. 
INDU sum: Despite the drop and not so far off lows, INDU is still entirely outside the Q BB. This limits upside on any bounce attempts and adds to risk of further declines. 

RUT / IWM
RUT Q: Doji bar forming at the top of the Q BB.
RUT M: Up for March so far, lifting from 10MA.
RUT W: YR1 high, YP support on weekly close. 
IWM D: Not giving up yet, reclaimed QP and above MarP (hard to see that but level 150.02).
RUT sum: Quarterly chart also limiting upside, but so far back above all pivots. 

NYA
W: High of year on HR2, then YR1 rejection, YP low, so far holding HP.
D: Under MarP and QP, trying to hold HP. 

Leaders from the 2/9 lows

SPY in bars, others in lines - percentage gains measured from 2/9 close. This tells you something about what big buyers most wanted to own in 2018 so far. 

USA main indexes: QQQ in red winning by a lot. Others in line, NYA last. 

Sectors: SMH winning by a lot; XBI and XLF in line, XLE lagging.

Global developed: SPY beating out EWJ, EFA, and EWG coming in last. 

China influenced: All above SPY, SHComp nearly matching, then EEM above SPY, FXI above EEM, and KWEB beating all handily with more than doubled the gain of SPY.

Other int'l: RSX and EWZ healthy, but INDA severely lagging.

Total market view

REVIEW
2/18/2018 Total market view: "What is most likely is development of some trading range. This is the natural sequence after the nearly 18 month run from the last key Brexit low in June 2016. If long, then it is time to exercise more caution via risk management, exposure levels, or willingness to re-enter short hedges. If this idea is right we are going to see more struggles around highs as pros start to distribute to lessen their exposure. Now the most interesting question - if all this is on the right track, where will this $ go? With late cycle investing playbook on script, bonds no help, inflation picking up, the place is commodities. Smart $ has already figured this out and bought EWZ and RSX even when oil was dropping. These are among top leaders of 2018 so far. Regardless whatever is above all pivots is the place to be and if more commodity themed ETFs, futures, etc join this list then this idea will start to look very correct."

The result was some selling around highs for several days last week, though Friday resolved higher. Oil via USO, EWZ, RSX among leaders for last week's performance.

SUM
Since the 2/9 low, risk assets are doing very well. Main USA index leader QQQ convincingly reclaimed the status of above all pivots on Friday. The tech sector ETFs that I follow - QQQ, XBI, SMH and KWEB - all finished the week above all pivots, joining EWZ and RSX that I highlighted previously.

Per put-call ratios, people are very skeptical of the rally. I am too a bit, but consider:

• Massive hold of YPs, HPs, and D200 & D100MAs across indexes on 2/9
• USA mains and others back above QPs 2/12+; many back above D50MAs, D20MAs, etc
• Tech leading the market with main index QQQ, both tech sectors SMH and XBI, and China tech all above all pivots
• Very high put-call ratios per this tweet

Though I am expecting more volatility in general in 2018, and more trouble at various resistance areas, now the most likely path seems to be tech strength and high test, which will pull other indexes higher. In addition, some indexes like SPY that are still below FebP are on track to open above MarP. An expansion of risk assets above all pivots would support this more bullish view.

I am still concerned about the quarterly charts, and don't think 2018 will trend the same way as 2017. But for now I'm playing for the QQQ YR1 area high test. New March pivots in play from Wednesday will be easy clues on further strength or weakness.

PIVOTS
USA main indexes - QQQ convincingly back above all pivots as of Friday. 

Sectors of note - XBI and SMH above all pivots.

Global indexes - KWEB above all pivots, joining EWZ and RSX already there. EEM and FXI within range.

Safe havens - GLD fell back under FebP last week, and GDX and SLV had more damage. VIX while dropping under YR3, then YR2 and now testing YR1 area is still above all pivots. 

Currency & commodity - USO nearly above all pivots. Bitcoin below all pivots. 

OTHER TECHNICALS
Past incidences of the 10 day average of new 52 week highs exceeding that of lows have been good places to drop bearish caution and re-commit to the bull side. 

VALUATION
Valuation levels rising sharply means SPX earnings are looking good. I still expect pro selling in 19-20X though.

SENTIMENT
Per put-call tweet above, people have bought a lot of protection - after the market went down 10%. Lol.

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

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

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

March dates
3/6 (minor)
3/8-9 (strong)
3/16
3/22-26

 

Bonds

The first issue here is what index to use. Here's a starter list:

TYX
TNX
ZB (cont contract, then current for shorter term moves)
ZN
TLT
AGG (based on Bloomberg Barclays Aggregate Index, not the same as the above 10 & 30 year Treasuries, but still a major bond benchmark; however, this is price and not total return)

It would be easy to pick just one but the fact is the bigger turns tend to show on most of these.

2016 July turn (the top in bonds / low in yields)
TYX QS1 exact
TNX MS1, YS2 near tag
ZB QR1 exact, YR2 near tag
ZN YR2 exact
TLT QR1 exact
AGG no level

So major levels in play for each; most especially the yearly levels on the futures were most glaring along with YS2 very near tag on TNX. 

2016 Dec turn (major high in yields, low in bonds)
This one not nearly as many levels
TYX no level
TNX YR1 (bingo)
ZB MS1 only
ZN HS1 and YS1 2 day break and recovery
TLT no level
AGG MS1 near tag, not really enough

2017 Sept turn (high in bonds, lows in yields)
TYX QS1 exact
TNX HS1 1 day break and recovery
ZB YP exact (bingo)
ZN HR1 exact
TLT QR1 exact
AGG QR1 overreach then fail

Last week
TYX QR3 exact
TNX YR2 exact - enough? 
ZB monthly only
ZN HS2 / QS3 combo
TLT QS3
AGG HS2

So enough here for a possible turn, most especially the YR2 on the widely watched 10-year yield. The issue is the momentum of this move in 2018 has been quite strong. TNX has been above a sharply rising daily 10MA for most of the year. Even if there is a pause at YR2 it is likely that the 20MA (last touch 12/29/2017) will be support and highs will be tested. 

Though I pounded the table on taking defensive action on stocks 1/29-2/1 - and any shorts would have been very counter-trend at the time - this was confirmed by a glaring VIX, momentum overreach, sentiment extremes and simply the number of indexes on yearly levels which hadn't happened since early 2016.

I cannot do the same for bounds here. Buying below all pivots is a pure counter-trend. It could work and probably the trade is crowded at this point, but there are easier moves are elsewhere. NDX/QQQ, SMH (semi-conductors), XBI (biotechs) and KWEB (China tech) are all above all pivots. Tech is leading the market. The main strategy here at The Pivotal Perspective is to be long the leaders. 

USA main indexes

Sum
USA main index leader NDX/QQQ recovered above all pivots convincingly on Friday. This shifts the market to a more bullish posture and re-test of highs on NDX seems likely. But we see breadth thinning out as IWM and NYA were barely higher on the week. MarPs in play from Wednesday will be a key tell; at current levels more USA main indexes will join NDX above all pivots, and then we'll see what happens with the lagging IWM and NYA.

SPX / SPY
SPX M: Massive rebound from first touch of 10MA since 11/2016. But expecting resistance at upper BB, now 2812, likely higher as March bar opens.
SPX W: HR2 top to YP low; now what? 
SPY D: 5 days stall on QR1, Friday finally cleared. 
Sum: Strong rebound continues and Friday's rally cleared some bearish concerns. Thinking that upper Bollinger bands on monthly and weekly chart likely resistance if tagged. 

NDX / QQQ
NDX M: Massive rally from 10MA.
NDX W: Within reach of testing YR1 again.
QQQ D: Though FebP orange dots resistance for 4 days, holding HR1 as support also a tell. Back above all pivots on Friday and YR1 easily within reach.

INDU / DIA
INDU W: YR1 high, HP low. 
DIA: Between levels. 

RUT / IWM
RUT W: YR1 high to near YP low. Small advance for the week makes this more vulnerable. 
IWM D: Few days of struggle near the 2017 close level; more bullish to be in positive territory.

NYA
NYA W: About even from last week.
NYA D: Between levels; MarP on this will be a key tell.

Total market view

REVIEW
2/11/2018 Total market view: "The consensus view: -20% bear market, -10% correction; bear markets rare without recession. Therefore we are in an area viewed from percentage declines off highs and key technical support levels that we are likely to see professional buying. We saw that twice last week from YP & D200MA test on SPX futures (ES) last week twice and for the session low on Friday with the market rallying 50+ points in minutes. So, is the low in? Not sure - maybe. There are some indications of a low but not as many as I'd like. I view buys here as aggressive positions that need to be monitored carefully. Regardless, what qualifies as a "buy" depends on your role in the market and how you are utilizing these comments and pivots to trade and/or invest. So we'll see. Bullish scenario would be SPX and NYA/VTI reclaiming Q1Ps. Bearish would be inability for this to happen and back down to lows or lower."

Result - SPX and VTI reclaimed Q1P on 2/12; NYA followed on 2/14. In addition, USA indexes reclaimed +YTD% territory which I had said in USA main index post would likely act as a kind of pivot. In addition, VIX dropped under YR3 near 25 on Wednesday which was an area I pointed that would help confirm additional buying. 

SUM
After the biggest scare in 2 years stocks held key levels - all 5 USA mains rebounded from long term pivots, either YP or 1HP - in addition to several key moving averages on daily, weekly and monthly charts. So is the low in and safe to be back comfortably on the bull side? 

Not quite. Though I bought aggressively on 2/9 I view the market in still mixed and somewhat precarious condition for several reasons. Most importantly:

• Pivots - None of the 5 USA mains above all pivots. What is above all pivots? VIX, GLD, then EWZ, RSX (commodity plays) and XBI. So 2 of the 5 market leaders are risk factors. This is in glaring contrast to 2017 when all 5 USA main indexes were above all pivots, and VIX below all pivots, for most of the trading days in the year. 
• Technicals - Quarterly charts are at configurations were pros are going to sell. New highs vs new lows (10 day avg) are still in caution mode. 

What is most likely is development of some trading range. This is the natural sequence after the nearly 18 month run from the last key Brexit low in June 2016. If long, then it is time to exercise more caution via risk management, exposure levels, or willingness to re-enter short hedges. If this idea is right we are going to see more struggles around highs as pros start to distribute to lessen their exposure. 

Now the most interesting question - if all this is on the right track, where will this $ go? With late cycle investing playbook on script, bonds no help, inflation picking up, the place is commodities. Smart $ has already figured this out and bought EWZ and RSX even when oil was dropping. These are among top leaders of 2018 so far. Regardless whatever is above all pivots is the place to be and if more commodity themed ETFs, futures, etc join this list then this idea will start to look very correct. 

PIVOTS
USA main indexes - QQQ testing FebP important to watch for strength next week. 

Sectors of note - XBI on recent buy list and also above all pivots. Despite oil strength XLE actually below all pivots and remains avoid. 

Global indexes - SHComp below all pivots, warning, though FXI, KWEB, EEM rallied smartly last week and within range of reclaiming above all pivots like tech. INDA hit by scandal and though it seemed D200MA was being bought it is negative YTD and there are better choices for 2018. As mentioned, EWZ and RSX 2018 leaders so far.

Safe havens - Bonds down, down, down. I have mentioned bond weakness each Total market view this year. Long term investors are losing money in their bond portfolios. I only hope that when stocks are similarly distributed the technical signs will be this glaring. Of major categories - TLT AGG LQD HYG - only HYG has not generated a long term total return technical sell (system described here). Also, key point, VIX above all pivots and unlikely to return under any pivot anytime soon. For now VIX dropped below YR3 and YR2 on 2/14. If stocks are playing out bullish then we should see VIX under YR1. 

Currency & commodity - Per view above will try to add to commodity tracking section this year. So far adding UNG (natural gas) and Bloomberg Commodity Index futures (AH on tradingview). DXY nearing YS1 / 1HS2 / Q1S3 areas and starting to see some divergences. But as long as DJT & cronies are blowing up the budget I don't think DXY will rally.

OTHER TECHNICALS
Quarterly chart RSI and Bollinger band configurations are a major concern and to my view setting up professional selling for Q2-3. 
SPX Q RSI highs exceeded only by 1996-98 (data to 1981)
NDX Q RSI 88, and expect to see pro selling and possible collapse if we see 90
At some point these charts will drop back inside the Q BBs and not rally outside again, forming divergence tops or deeper corrections.

VALUATION
Valuation top on SPX forward P/E right at 1 standard deviation of 25 year avg. If we actually believe that 19-20X forward P/E is the valuation top for this cycle (as I do) then valuation is a headwind more than a tailwind, and we should start to expect to see pro selling on rallies.

SENTIMENT
Froth reached 2017 Dec and early January on:
NAAIM expsure highest ever Dec 2017
AAII 2nd highest bull bear spread of the decade Jan 2018
Daily put-call at multi year lows

Daily put-call quickly jumped to relative highs and this may help make a floor under the market for the time being. After the drop everyone is prepared for the drop. I am prepared for choppy distribution trading range and possible high test before another wallop, but will certainly re-enter IWM short hedges on any move back to negative YTD %.

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

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

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

USA main indexes

Sum
After testing and holding long term pivots on 2/9, all 5 USA main indexes rallied impressively last week and all returned to positive YTD % territory. NDX/QQQ is the clear leader, which is often bullish for the market; but it was unable to put in a weekly close above all pivots. QQQ FebP level to watch from here; more bullish if above. Of the other 4, SPY and VTI closed under Q1R1 resistance.  

Both NYA and IWM are barely positive for the year; IWM remains first choice for USA main index short hedging. NYA reflects more global positioning but I view it as often reliable tell for the larger market. 

Despite the recent hold, the toppy looking quarterly charts and extremely high RSIs are my concern. I doubt that 2018 will trend in a similar manner as 2017. After a trending move the next most common move is not an immediate crash but establishment of a trading range. This would imply professional selling on any move higher, or perhaps a down week next week before another attempt to rally towards highs. 

Bullish scenario would be QQQ continuing to lead higher and reclaim status of above all pivots, with IWM remaining in positive YTD territory;
Bearish is SPY and VTI Q1R1 rejections with IWM and NYA fading back to negative YTD%. 

SPX / SPY / ES
SPX Q: About 6 weeks to go until close to but me this is the most threatening chart. BB 2702.
SPX W: Really fun how pivots work sometimes; 1HR2 high to YP low, back to near 1HR1. 
SPY D: Close just under Q1R1 gives near term edge to bears.
ES D: Congested above D50 and below D20; clear buying at YP, 1HP, then Q1P. 
SPX sum: Bullish hold of YP, 1HP and launch from Q1P all great buying opportunities. But not yet above all pivots and for now Q1R1 and falling D20 resistance.  

NDX / QQQ / NQ
NDX Q: The stronger rebound makes this chart look more healthy compared to SPX. Still, RSI 88 and outside the BB is not going to last forever.
NXD W: Perfect hold of 1HP.
QQQ D: High on Q1R2, faded back under FebP slightly. Still above 1HR1.
NQ D: V moves can be tough to catch, but 2/9 low had 2 levels and a rising MA on your side. 
NDX sum: NDX clear leader on bounce and even closed back above all pivots for 1 day. FebP key level to watch for next week. Though NDX bounce is reducing the wick on the quarterly bar, RSI 88 and power up outside the Bollinger band is not going to last forever. 

INDU / DIA
INDU Q: Again 6 weeks until close but this is a pro sell and not a buy or hold at this configuration. 5th quarter outside the BB, and could have stayed back inside band but rallied back outside on the bounce. RSI nearing 1987 levels, only exceeded in the 90s.
INDU W: YR1 top to 1HP low. The other arrows are: definitive Feb & Feb 2016 lows on YS1, definitive hold of YP on 6/2016 low, definitive jump above YR1 after election, definitive jump above YR1 July 2017, definitive clear of YR2 Oct 2017, and so now why wouldn't we have definitive top at YR1? OK the pivot is also holding, and that could also be definitive; this sets up trading range. 
DIA D: Getting back into + YTD at the red line on 2/14 attracted more buyers, but not much follow through. These levels will continue to be important; a second move back to - YTD % would be bearish.
INDU sum: Give the points about the INDU weekly chart and definitive turns on pivot, support & resistance levels it is quite possible that we saw both a definitive high and low for the time being. This sets up trading range which is the most logical next step after trending move anyway. For now better for bulls for DIA to stay in positive territory for the year. 

RUT / IWM
RUT Q: Pro short sellers are salivating at this bar. Unlike the others, no able to stay outside the BB this time. 
RUT M: This chart doesn't look bad, with impressive hold of rising 10MA. 
RUT W: Nice hold of rising W50MA and lower BB. 10MA and 20MA in play.
RUT W: 2016 low on YS2, 2018 high on YR1. 
IWM D: Just barely positive YTD and any trouble next week and IWM remains first choice for stock short hedges. 

NYA & VTI
NYA W: High on 1HR2, hold of YP and 1HP.
NYA D: Barely positive YTD. 
VTI W: Often similar to SPX.
VTI D: Q1R1 resistance. 

Total market view

REVIEW
2/4/2018 Total market view: "As stated last week, this is the most amount of indexes having the same move from yearly levels that I have seen from early 2016. Thus, likely we just saw a major top. That said, tops tend to stretch out compared to rapidly formed lows and I view this move as the first phase of a transition from trending market to range market for risk assets. After a historic run of massive gains without as much as a -3% drop, I believe buyers will step in in the -4.5% to -7% range and then the next likely move is a rally back towards highs." 

Result - Direction correct, magnitude not. Indexes continued waterfall drop with most in -10% area. Still, taking longs off the table 1/29 and 2/1-2, not shifting into bonds, hedging with long volatility has done very well the past two weeks. Getting out of the way of this decline is now significantly outperforming SPX with lower volatility - this is what everyone is trying to do right? 

SUM
The consensus view: -20% bear market, -10% correction; bear markets rare without recession. Therefore we are in an area viewed from percentage declines off highs and key technical support levels that we are likely to see professional buying. We saw that twice last week from YP & D200MA test on SPX futures (ES) last week twice and for the session low on Friday with the market rallying 50+ points in minutes. So, is the low in? 

Not sure - maybe. There are some indications of a low but not as many as I'd like. I view buys here as aggressive positions that need to be monitored carefully. Regardless, what qualifies as a "buy" depends on your role in the market and how you are utilizing these comments and pivots to trade and/or invest. 

Short term (from daytrading to 2+ weeks roughly speaking): fantastic risk-reward buy signal Friday 1:30 & 1:45 15 minute bars, perhaps already out with partial profits.
Medium term position traders (2 to 12 weeks, again roughly speaking): some short covering and partial aggressive longs.
Long term (1 quarter +): Significant cash, likely out of shorts and hedges at this point.
Buy and hold asset allocation (my system): Out of bond allocations, still holding stocks, watching; lifting most hedges if taken.

If you don't know what I mean by hedges then you probably shouldn't be trying to use them. But while I specifically recommended a volatility ETF from late January, there are also inverse ETFs that are directly correlated to longs you may hold, index puts or futures. 

I view buy signals other than the short term traders as partial / aggressive because:

1. No VIX confirmation; VIX not likely returning below all pivots anytime soon but I would like to see decent rejection of YR3 near 25 instead of holding that level as support
2. Lows still outside daily Bollinger bands, no divergence yet
3. No days or weeks of mild selling
4. Some indexes still in mixed status, ie, SPX below FebP and Q1P, holding 1HP and YP
(There are others but this is enough to get the point.)

On the plus side:
1. Major long term levels tested and held
2. Rising moving averages tested and held; in fact on daily, weekly, monthly charts
3. Low test of sorts on Friday
4. RSI low on daily chart also adds a reason to take a stab

So we'll see. Bullish scenario would be SPX and NYA/VTI reclaiming Q1Ps. Bearish would be inability for this to happen and back down to lows or lower. I like the SPX YP buy but as it turns out the D200MA on SPX was also there and it seems a bit too easy. Given the nature of the move so far, we may need to see a break on SPX and down to INDU or NDX YP which would imply SPX going lower.

As usual having cash on the sidelines means it is rather comfortable to watch and see what holds up best in the drop. No risk asset classes are above all pivots. Perhaps there are some individual stocks but I don't have the time to monitor things on that level. So this takes us to status on Q1Ps, 1HPs and YPs.

On the USA mains, NDX and INDU are above Q1P but SPX, RUT and NYA/VTI are not. On sectors, XLF and XBI held Q1Ps, SMH is below, and XLE is below all pivots. 

Global developed, EFA below Q1P, EWJ above Q1P, EWG below 1HP. Last and not at all least, global emerging, ACWI below Q1P, SHComp below all pivots, FXI below 1HP, KWEB above Q1P by a bit, EEM below Q1P, INDA above Q1P, RSX barely above Q1P, EWZ well above Q1P and still very positive YTD. 

So easy buy watch list (or if in partial longs, better to be in one of these vehicles): 
NDX/QQQ, INDU/DIA
XBI, XLF
EWJ
INDA, EWZ

PIVOTS
USA main indexes - All 5 USA mains tested and held long term pivots last week; this means the 1HP or YP. If low is in then SPX will reclaim Q1P on Monday. If not then we may need to see NDX or INDU YPs. 

Sectors - See list above. Pretty clear that XBI is doing better than SMH this year. 

Global - See list above. SHComp below all pivots is a warning sign. Last year I don't think people were expecting much positive out of China, and instead China tech via KWEB (BABA, etc) was the best performing trade other than cryptos and short vol (as called btw). This gave a boost to the popular EEM trade as well. While it is theoretically possible for SHComp and FXI (and thus also likely EEM) to move in different directions they are very correlated. See this tweet for the chart.

Safe havens - Consider the rarity that was 2017 when there was only 1 day that SPX and VIX simultaneously closed below/above a QP respectively. VIX has been above all pivots since 1/29. Bonds are not helping and The Pivotal Perspective has been clear on this point from the beginning of the year. I went out of my way to show even on a long term basis some major bond vehicles were going into seriously negative territory (ie, total return basis below YP and below weekly 50MA). LQD joined TLT and AGG last week in this list, and very short term Treasuries were already there weeks ago. While GLD seems to be doing OK, GDX collapsed last week below all pivots and had very quick trip to YS1. 

Currency & commodity - Oil also rejected from YR1 last week. A bit late compared to stocks but down nonetheless. Nag gas via UNG below all pivots. 

Cryptos (majors only): Leader ETHUSD tested and held YP, 1HP and Q1P on 2/6. BTC and LTC below all pivots. 

OTHER TECHNICALS
Two things are bothering me about the bull case here. 

1. New highs new lows has shifted bearish. Previous incidences of re-committing to the bull side happen when the 10 day average of new highs is above that of new lows. This occured 3 times since the 2016 lows so this is a fairly good signal: late Feb 2016, November 2016, and late August 2017. PS, the reverse doesn't really work as a sell signal as it is too late; but it does work well as a buy confirmation.

2. Quarterly charts on USA main indexes. Per recency bias people may have been expecting stocks to go up forever but the fact is that these types of quarterly, monthly and weekly Bollinger band breakouts like what happened in 2017 Q4 are rare. Now prices have fallen back inside the Q and M bands (for most, not even on INDU yet). I think these will act as resistance going forward which implies limited upside on a bounce and/or further declines before the pros are willing to really step in. More on this soon. There are many weeks left in Q1 but at this point NDX is setting up a massive spike which would imply serious trouble in Q2-3. 

VALUATION
SPX reached 1 standard deviation above its 25 year avg. Forward P/E was heading towards 20 and in 2 weeks dropped back under 18. Keep in mind that SPX cleared 18 only in 2017 Q4. Like the Bollinger bands, 18X forward earnings may also act as resistance ahead.

SENTIMENT
Put-call reached multi-year lows in January and is now heading up. If time permits I'll review this in more detail soon.

TIMING
Alas no date on the high, however:

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

Why am I not a strategist at a hedge fund again? Just contacts, marketing and self-promotion skills folks. I'm doing some great stuff here. 

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

February dates
2/2 - middle of drop
2/9 - added per tweet maybe low
2/12 - ?
2/15 - negative for risk and end of volatility window per tweet above

USA main indexes

Sum
All USA main indexes continued dramatic rejections from YR1s that began on 1/30 and rapidly reached long term support levels. On Friday pivotal momentum main index leaders NDX and INDU held 1HPs and both closed above Q1Ps. SPX, NYA & VTI tested and held YPs on Friday's low. RUT/IWM broke its YP one day, then recovered to close near the level. This means 4 of 5 USA mains tested long term pivots support at 1HP or YP and so far are having a decently positive response. 

This is enough major league support for more bounce, but my more bullish near term view based on market response to Twitter projected low area SPX 2511-2838 was tempered by checking the quarterly charts this weekend. I suspect the Bollinger bands will be resistance going forward. If this is correct then upside is limited. This means pro selling on bounces and risk control for anyone who added back some longs on Friday. 

To keep it simple, unlike 2017 when virtually every week was all 5 USA mains above all pivots and above all daily moving averages, right now the pivot status is mixed:

SPX above YP & 1HP; below Q1P and FebP
NDX above YP, 1HP and Q1P; below FebP
INDU same as NDX
RUT testing YP, below 1HP, Q1P and FebP
NYA and VTI above YP and 1HP; below Q1P and FebP

In addition, all but NDX negative YTD. This is also a key level that functions as a pivot. 

Bullish scenario: SPX, NYA and VTI clear Q1Ps and move back towards even YTD, then we'll see.
Bearish: Q1P rejections on SPX, NYA & VTI and any break of levels that held last week. 

SPX / SPY / ES
SPX Q: BB resist 2675.
SPX M: 10MA support 2563, BB resist 2788
SPX D: 1HR2 top, YR1 rejection, 1HP bounce, fail and YP bounce. If you don't understand what i am saying here look at the chart and the FAQ for abbreviations. 
SPY D: Held YP, 1HP but Q1P resistance. Also, red line at 2017 close shows negative YTD.
ESH D: Mild RSI divergence; lows outside BB. Needs to clear Q1P and D100MA.
Sum: Major support YP 1HP and D200MA holding so far (also weekly near 50MA tag, monthly 10MA). Daily needs follow through above Q1P or risk is return to lows and/or breakdown. Issue with bounce is that Bollinger bands on Q and M more likely to be resistance areas from here. If market bounces I'll be watching those areas for pro selling. 

NDX / QQQ
Q: Falling back inside BB, resist 6495.
M: 10MA support,  BB resist 6913
W: 20MA support
D: 1HP exact low
QQQ D: Also above Q1P and slightly positive YTD. 
NQH D: Better shot at bounce.
Sum: Stronger position than SPX, low on 1HP not YP, above Q1P not below, above D100MA, daily close inside BB. However, the quarterly chart is still a problem - will pros push this up outside BB again or selling on bounces? I think the latter. If stocks down the YP is significantly lower than other indexes and looks like last chance bull market support should that test (implying that worst case yet still bull scenario si 4/5 indexes breaking and NDX keeping trend alive at that point). 

INDU / DIA
Q: Still all outside the BB! To me implies further to drop. 
M: 10MA near tag, BB resist 2584. 
W: 20MA test.
D: 1HP hold. 
DIA D: 1HP hold above Q1P (arrow). Negative YTD.
Sum: Despite falling -10%, INDU is still outside the Q Bollinger band! If markets lower then INDU YP and D200MA combo will be critical areas. 
 

RUT / IWM
Q: BB 1542 resist.
M: 10MA support, 20MA not far.
W: 50MA and lower BB support.
D: YP 1 day close below, Friday on the level and below 1HP.
IWM D: On the YP, below 1HP. 
Sum: RUT/IWM was rec'd as short-hedge vehicle near the high due to chart homework and glaring weakness compared to others. Last week first to break YP and weekly close below long term support (1HP).

NYA & VTI
NYA: YP and D200MA hold, 1HP resist.
VTI: YP and D200MA hold, 1HP resist. 
Both of these are also under Q1Ps (not shown) and negative YTD.