USA main indexes

Sum
All 5 USA main indexes are above all pivots, a basic bullish configuration. AugPs had test or near test and all held so far. SPX, DJI and NYA cleared resistance levels last week (YR1 and QR1s respectively).

This is all bullish so the right thing is to set sighs on higher level targets. Interestingly, RUT IWM which had been the clear leader early in Q2 has been unable to clear YR2 and now poised to lead to downside should there be any weakness.

SPX SPY ES
W: SPX clearing YR1 opens door to HR1 / retest of highs.
D: SPY big buying from near test of AugP; clear YR1 points to HR1 target.
ES: AugP near exact on the low.
SPY 2H: Very bullish working off of overbought conditions; quick drop and a few days below a WP and then back above. 
SPX sum: After dropping from YR1 area and JulR2 top, SPX had a few days of shuffle and mild pullback to near AugP (exact on ES futs) which was bought big time. SPX finished above the YR1 which means next move more likely to HR1 which is essentially test of 2018 highs.

NDX QQQ
NDX W: Mild drop from HR1 with 2 relatively tame red bars and already moving back up.
QQQ D: AugP bought. Should see test of resistance cluster of QR1 HR1 YR2.
NDX sum: Should see retest of resistance cluster QR1 HR1 YR2.
 

DJI DIA
DJI W: Between long term levels.
DIA D: Clearing QR1 for the 3rd time. 
DJI sum: Above QR1 bullish for near term. 

RUT IWM
RUT W: YR2 stopped the rally 3x. Above AugP but any further weakness will break. 
IWM D: AugP defended so far.

NYA
W: Between long term levels.
D: Above AugP and cleared QR1 for the 2nd time, bullish.

Total market view

REVIEW
7/22/2018 Total market view: "Bottom line - There have been moderate gains since longs of early July. If RUT cleared YR2 and VIX was below YP then I'd probably err on the side of holding longs. But with the three mains just shy of targets and VIX above YP, with DJI and NYA starting to move negatively from JulR1s, it is time to be watching for a defensive adjustment."

Results - NDX and RUT topped in resistance areas, while SPX exceeded for two days and then dropped. VIX closed one day fractionally below its YP then bounced. It paid to be defensive especially on IWM, XBI and QQQ.

Abbreviated version due to travel. Regular schedule resumes soon.

SUM
Last week was more rotation than pure risk off. The laggards of many months, DIA and NYA, continued up for most of the week with a mild drop on Friday. The two indexes that were first to reclaim above all pivots in Q3, IWM and XBI, had the biggest declines. 

That said the door is open for more selling for the coming week. SPX tried and failed at its YR1; NDX HR1 / QR1 rejection; and RUT continuing to drop from its YR2. Of course FAANG widely owned and the -20% drop sure to have shaken some people up. 

We'll also have new August pivots in a few days. 

Bottom line - Buying into the rally from early Q3 has done moderately well. It turned out the better gains came on the setups after the first IWM & XBI longs - SPY, QQQ, then XLF and INDA. With former leaders now leading down, and former laggards turning into leaders, there is no simple index hedge (though you can always hedge a QQQ long with the same short). That means taking profits, or at least not letting gains turn into losses, was the right move.

If DIA and NYA were leading down and VIX moved more to upside last week, I'd be thinking about a major turn. But with markets making more of a rotation move, I will think at some point soon there will be another attempt to move broadly higher. 

Total market view

REVIEW
7/14/2018 Total market view: "Bottom line - Although the next move up may take a bit more work than the last two weeks, I think SPX is heading to major resistance at 2820-30 and pulling for NDX to reach 7460 - 7570. I am less sure what happens to RUT as that has failed twice on its YR2. I'll keep to this bullish case especially with all 5 main indexes above all pivots."

Result - SPX made it to 2816 but not 2820 yet. 

SUM
The Pivotal Perspective has been emphatically bullish to start the second half. As I mentioned several times, having cash ready, watching for good looking setups and then seeing SPY holding HP the very first day of the new quarter and half was tip to start getting long. On 7/3 sector leader XBI cleared above all pivots, though not above 10 and 20MA until 7/5. Main index leader above all pivots on 7/5 was another clue before SPY and QQQ joined above all pivots on 7/6. 

From these core longs I recommended supplemental positions in XLF, XLE, INDA and potentially SMH (though semi's behind QQQ and XBI). XLF and INDA have gained, the others faded.

Now in monitoring phase of longs checking to see where adjustments might be appropriate. Thus far I have thought if DJI and NYA joined the others above all pivots I would aim for SPX and NDX target zones and expect to see RUT above its YR2. The pivot configuration is bullish but we haven't not quite gotten to targets yet. I'm pulling for these to hit these week, but also ready to make an adjustment by locking in gains, taking a short hedge on DIA, or VIX long, especially if I see a clear message of the market with multiple indexes below WPs and VIX lifting above its YP.

As total volume is quite low, there may not be enough gas in the tank to reach the levels, or the market may need another pullback to have 2H charts reach oversold before big buyers are willing to step in. 

Bottom line - There have been moderate gains since longs of early July. If RUT cleared YR2 and VIX was below YP then I'd probably err on the side of holding longs. But with the three mains just shy of targets and VIX above YP, with DJI and NYA starting to move negatively from JulR1s, it is time to be watching for a defensive adjustment.

PIVOTS
USA main indexes - SPX and NDX haven't quite reached levels. 

Sectors of note - XLF decent bounce from YP, but still below HP and D200MA. SMH has been chopping around its 2000 top for most of this year frustrating both sides. XBI up 18% YTD but the last 5 days stuck on JulR1.

Developed - DAX the weak link, and did not hold on to status above all pivots. Currently mixed above HP QP and MP but not YP. 

Emerging - Shanghai Comp so far low 7/6 and trying to move back above YS2. Global indexes bounced quite a lot with DXY dropping; there may be more to this move with EEM back above its YP as well. 

Safe havens - TLT started the 2H with a move above HP and D200MA, but didn't reach even a monthly resistance level. Sometimes it pays to do homework as I noticed levels on the continuous futures contracts that I thought would stop the rally. This was also part of the XLF long idea. TLT broke down in a big way on Friday and if we emphasize the long term levels of YP, HP and D200MA (or W50MA) then all these are currently bearish for bonds, bullish for rates. Conversely metals though only in avoid or short mode may have found a bottom on the GC current contract YS1. For stock positioning, I'm most keenly watching VIX flirt with its YP. This will be especially the case if we see a coordinated message between VIX and VXX.

Currency - DXY rejected big time at its YP, but still above MP and D50MA. 

Commodity - USO tumbling to start 2H and currently below YR2 and QP, but did recover HP. Not sure which way this goes. 

Crypto - It seems my 3-4K target idea being called into question with the recent pop. For all the decline this year this was a simple retest of the February low. 

OTHER TECHNICALS
Total volume notably low, even for summer. I think this increases the risks on downside and may explain the target fail on SPX and NDX.

Another important note - NDX quarterly RSI about to reach 90. While there have been rare occasions with an asset class that maintains above this level, it is more likely on a monthly or quarterly chart that a major top and big drop is about to happen. For example, DJI Q RSI topped 90 only 2 quarters before the crash in 1929; IBB topped 90 2015Q1-2 before a fast 40% drop off highs. 

VALUATION
Mid 16s. A tag of 17X implies 2850 area. All lines are 10 week averages as provided by Thomson Reuters. 

SENTIMENT
My favorite sentiment meters remain simple put call and equity only put call as they continue to work very well. Simple put call was screaming warning in January at multi-year lows, was massively bullish to start Q2 at multi-year highs, and again warned of a top in mid June. Currently not at extreme so if the market goes higher not everyone has embraced this idea.

TIMING
7/3 - Stock index pullback low
7/10-11 - Actually looks like pullback low on 7/11
7/25 - Pulling for a stock high
7/27 (adding) - Looks like volatility spike

August dates
8/2
8/6-8 strong
8/17-20
 

USA main indexes

Sum
The last few weeks I've been very clear - as SPX just held major support I thought it would make a run to major resistance and so I've been pointing to 2820-30 (QR1 actually 2822) since. Last week reached 2816. Was that it? 

Similarly, NDX not quite at target area QR1 HR1 YR2, but still could power up to test those levels. RUT testing YR2 for the 3rd time this year and so far with the least damage. 

Bullish scenario will be SPX and NDX up to target areas with RUT above YR2. This will be more likely to play out if above WPs next week. 

DJI and NYA comparatively weaker as they have been for much of the year. DJI could be first choice as main index hedge as it has had resistance at JulR1 and if lower will be first to have any pivot break. NYA reflecting global weakness but not a trading vehicle. 

Bottom line still pulling for indexes to reach target areas, but if any signs of weakness may take some off table and/or add hedges on DIA.

SPX SPY ES
SPX Q: High on BB exact to the point so far. 
SPX W: YR1 near test.
SPY D: YR1 & QR1 nearly same level for the ETF.
ES D: Last 2 days just a pullback to nicely rising 10MA.
SPY 2H: All above weekly pivots since 7/5, with the WP perfect buy last week. 
SPX sum: Pulling for SPX to reach QR1 - YR1 target at 2822-2830, but the question is whether 2816 was close enough. Q BB at 2816 exact adding to resistance in this area. Near term tells are the response from the daily 10MA and next weekly pivot. 

NDX QQQ
NDX Q: Q RSI 89.98 - pro selling at 90 area possible. 
NDX W: Healthy lift above YR1 in the 2H so far - enough juice to reach HR1 near 7500?
QQQ D: Resistance cluster QR1, HR1 and YR2 182-184.
QQQ 2H: All above WP from 7/5; dip below last week quickly recovered. 
NDX sum: Still expecting this to reach QR1 HR1 YR2 area 7460-7570 on NDX and 182-184 on NDX sum. Tech has been amazing but people who think it is going up forever with Q RSI at 90 area are delirious.

DJI DIA
DJI W: Recovered above HP the 2nd week of the new half. 
DIA D: 3 of last 4 days resistance at JulR1. If above that QR1 likely strong resistance. 
DJI sum: Weakest main index; below JulR1 can consider short hedge; if down will be first to have any long term weakness. 

RUT IWM
RUT W: Testing YR2 4 of last 5 weekly bars. Last week seemed to give chance to clear but still under the level. 
IWM D: 3rd time up to YR2 with minimal damage so far. 
RUT sum: Back to YR2 for the 3rd time in recent weeks. Will it clear? Not sure, but next week I'll be using the WP as additional clue of whether next move is breakout up or rejection. 

NYA
W: Above the HP but does not look convincing.
D: Also resistance at JulR1 with HP just below. 
NYA sum: Looks vulnerable to drop, but have to give bulls benefit of doubt above HP and D200MA.

Total market view

REVIEW
7/8/2018 Total market view: "The second half is starting with a risk on move. There were a lot of potential buys in the last week and here's the key thing - not much is at resistance yet. Only IWM has reached a JulR1, even 2 hour charts are not overbought on RSI yet, and indexes have room to hit most Bollinger bands (Q, M, W, D). This means a lot of indexes are set up for a decent move higher."

Result - Most USA indexes except RUT higher last week.

SUM
Last week DJI and NYA joined RUT, NDX and SPX above all long & medium term pivots (disregarding weekly & daily pivots for this type of basic status). So bulls have the ball. RSIs on daily and weekly charts are not overbought, so room to move higher in that regard. Valuations per SPX forward P/E still in 16s so even a tag of 17X again would push to 2850+. Sentiment per daily put-call is skeptical. New lows plunged last week, the opposite of what we would be seeing if this rally was about to stall. 

Simply stated most evidence supports the bullish case. OK, 2 hour charts are overbought. Financials are weak and TLT remains stubbornly strong. It is summer and SPX stalled in this 2790-2800 several times this year. If DJI and NYA were below 2HPs I would be sounding more cautious. But with all 5 indexes moving together, it is easy to prefer the bull side.

In the move off the lows, IWM was the first main index to recapture above all pivots. SPY and IWM quickly followed. Among the indexes I track, XBI was actually first, above all pivots on 7/3 and then clearing above all MAs on 7/5. These were core longs. 

In last week's Total market view I mentioned several additional good looking buy setups: XLF was set to bounce off its YP and it did in a big way, until a quick fade. XLE launched then dropped just as fast. INDA had a nice move up. Only SMH didn't work but if already long XBI and QQQ no real need to pile in huge on the tech laggard. So the core longs are still doing fine (thought bit concerned about IWM), the extra setups were mixed.

Bottom line - Although the next move up may take a bit more work than the last two weeks, I think SPX is heading to major resistance at 2820-30 and pulling for NDX to reach 7460 - 7570. I am less sure what happens to RUT as that has failed twice on its YR2. I'll keep to this bullish case especially with all 5 main indexes above all pivots. 

USA main indexes - more detail here.

Sectors of note - XLF weak below HP and finished the week slightly under QP. XLE topped on JulR1 with YR1 just above so no bias to next move there.

Developed - Nikkei improving also above all pivots as of 7/13. DAX struggling, below YP.

Emerging - China starting to stabilize. INDA was a nice pick last week, but still under HP. If EEM and FXI can reclaim YPs then that further supports the basic bull idea.

Safe havens - VIX testing YP with a fractional close below the level on Friday. Any move up could be another hedge idea if other bearish events. TLT the outlier safe haven. Metals terrible.

Commodities - Turned out I didn't miss much in oil as drop came rather suddenly not from any pivot level. Pesky when that happens. Still above all pivots, but prefer to go with indexes that are starting 2H by moving up not with a semi-crash.

Currencies - DXY still under YP. 

Cryptos - BTCUSD really slowing down but if it can't get moving with tech flying higher then probably going lower. Core target 3-4K, possible 4800.

OTHER TECHNICALS
New lows making it more likely current stock rally will continue. 

VALUTION
SPX could easily reach 17X again (green line) currently near 2850 and still rising. 

Sentiment
Put-call still on the high side. Next week monthly options expire. SPX 2825 anyone?

TIMING
July dates
7/3 - Stock index pullback low
7/10-11 - Actually looks like pullback low on 7/11
7/25

USA main indexes

Sum
All 5 USA main indexes back above all long & medium term pivots is bullish. QQQ has resumed as main index leader as IWM has faded a bit with again trouble at YR2 then JulR1. SPY / SPX looks like it should reach QR1 YR2 cluster 282 / 2820-30. Better for bull case for NYA to stay above HP. 

SPX / SPY / ES
SPX M: Monthly close high at 2823 additional factor to watch.
SPX W: Strong move up from 2HP in process; should reach YR2, then if above can think HR2.
SPY D: All Q1 highs directly on levels; not so in Q2. Hoping Q3 back to normal and if so YR2 at 282 decent bet from here. 
ES D: Above all pivots and MAs with MACD positive and RSI not overbought from 7/9 - this means healthy up with room to move higher. 
SPY 2H: RSI near overbought (70) twice on this rally so far; January aside, this is where pros have sold. 
SPX sum: Base case is going for SPX YR2 QR1 cluster at 2820-30, which also happens to the monthly close high area. Upside for the coming week may not be as easy as 7/6-12 but pivot status gives bulls benefit of doubt. 

NDX / QQQ
NDX W: Looks like HR1 / YR2 near 7500 doable. 
QQQ D: QR1, 2HR1 then YR2 all 182-184.
NDX sum: Power move up in play despite last month's toppy bar; new highs last week. Should reach QR1 at least and ideally HR2 or YR2.

DJI / DIA
DJI sum: Above 2HP is bullish. Expecting to see JulR1 and maybe QR1. 
W: Recovered HP weakens the bear case. 
D: Watching JulR1 then QR1.

RUT / IWM
RUT W: Trouble at YR2 but weak selling looks like it try again.
IWM D: Daily chart looks a bit weaker with JulR1 rejection last 3 trading days. Also, hasn't made new high like QQQ.
RUT sum: Was leader on rally last week but fading with YR2 stopping the move and then below JulR1 whereas QQQ and SPY are above JulR1. This is interesting turn of events and given proximity to start of 2H worth bearish in mind. At this point if reducing longs next week IWM would be first to go (compared to XBI, QQQ, SPY); and conceivably could turn into main index hedge which it hasn't been for all of Q2. 

NYA
W: Above HP is bullish but not convincing and may fade.
D: Above HP for 3 of last 4 trading days. Better for bull scenario to stay above HP.

Total market view

REVIEW
7/1/2018 Total market view: "IWM, QQQ and SPY (barring a big gap) are set to open above YP, HP and QP but below MP. There is a fairly big cluster of support on SPY just below - so even if first move is down, dropping onto major support could be a buying opportunity. If the market gaps higher and/or rallies on Monday, then we'll see at least one of these back above all pivots and we'll have an easy answer."

Result - So far 7/2 low on support was a buy. Indexes strengthened considerably Thursday and Friday.

SUM
A lot of recent recommendations tilted bearish or at least encouraged to take profits in small caps and tech (while avoided the troubled global indexes all Q2). TLT long first recommended mid May, then shorts on SMH, IWM, QQQ, and XLF were all mentioned as good looking setups in recent weeks. I was certainly skeptical of the risk on trade seeing several key indexes opening below major support for the first time in over 2 years. 

But as I have said many times, often it is good to start the quarter clean with cash available to spot the next best setups and so far this has worked like a charm. On Monday 7/2 SPY (and ES / SPX) opened below 2HP but rallied to finish above. Tuesday 7/3 also looked threatening with an MP rejection, but again the 2HP held. Thursday was especially strong in ES futures, again testing and holding the 2HP early with a big rally all the way to MP at close. As this happened main index leader IWM closed above its MP, current sector leader XBI closed above all pivots and MAs, and VIX had an MP rejection - all bullish signals. 

Buying in Thursday and adding early Friday on the launch as QQQ and SPY joined IWM above all pivots, with VXX confirming by dropping back below all pivots, is now nicely positioned.

A few other ideas - XLF looks set to bounce off its YP. Usually better to buy strength, and XLF will be under HP, QP and MP, but given all the press on this sector and what I think is a likely turn in bonds this seems like a good setup. Regardless risk is a close below the YP. A lot of global ETFs were beat up in Q2 as currencies slid and trade war impacted negatively. INDA has recovered back above its YP and closed fractionally above its MP as well; this could benefit from additional deep pocket buying and/or DXY slide. 

Right now small caps, tech, and biotech are leading higher. SMH is lagging but could be an add if above the MP. USO is also at highs but to be honest I missed the ball on the last move as I passed on a massive up day then passed again with an entry bang on YR2. But now it is above YR2 for the 2nd time this year, and unlike the May top above YR2 on continuous contract as well. XLE should get in gear and is a potential buy with any further strength next week. 

The second half is starting with a risk on move. There were a lot of potential buys in the last week and here's the key thing - not much is at resistance yet. Only IWM has reached a JulR1, even 2 hour charts are not overbought on RSI yet, and indexes have room to hit most Bollinger bands (Q, M, W, D). This means a lot of indexes are set up for a decent move higher. 

VIX and VXX are looking especially bullish for stocks with a lot of room to drop. The only safe haven indicating otherwise is TLT, and bonds via the ZB and ZN continuous contracts are right at resistance and just asking to be hit. 

SPX valuations are reasonable, still at the lower end of forward P/Es for this year. A return to 17X means well above 2800. Sentiment went bearish in a hurry, with daily put call back to elevated levels with all the press about the tariffs with China. 

It is possible that last week was the JV team and pros coming back from 7/4 week holiday will turn the tables. If that happens then we'll see DIA fail at MP or HP test, and XLF fail below its YP as VIX and VXX turn around. But right now I have to be pretty bullish here and simply thinking the since SPX just held major support it is likely heading to major resistance, and that level is 2830. If that happens then leaders can make new highs so that means IWM above YR2, and QQQ could potentially see QR1 HR1 YR2 cluster 181-184.

PIVOTS
USA main indexes - 3 of 5 USA mains back above all pivots. For the extra bullish scenario it would be better for DIA and NYA to move above 2HPs. If not then DIA can be a hedge. 

Sectors of note - With SMH weaker, XBI taking over as leadership role. This flip flop has happened before. XLE seems like it should rally with oil and XLF set to bounce off its YP.

Developed - By the end of the week DAX has moved from below all pivots to at least above its QP. Nikkei also tested and held its YP.

Global - China taking the hit with SHComp under YS2, FXI and EEM below YPs. It would be a bullish sign for risk in general if EEM recovers back above its YP.

Safe havens - VXX below all pivots means correct to be bullish on stocks. VIX also back under MP. TLT at major resistance via weekly chart and ZB ZN continuous contracts. While someday there may be a sustainable move up in metals right now they just don't seem bothering with. 

Commodities - USO the real leader this year and considering DXY high at the end of June that is remarkable. There has only been 1 trading day below a QP in USO this year, otherwise a monthly pivot breaks.

Cryptos - BTCUSD showing signs of life, actually above an MP for the first time in weeks. I still think it is going to 3-4K.

OTHER TECHNICALS
Per RSI and Bollinger bands on 2H, daily and weekly charts, all USA indexes have room to move up.

Also I'll be watching to see that daily new highs stay above new lows. 

VALUATION
Forward P/E (10 week avg) currently between 16-17. 17X tag would mean above 2800 and given the time and slope more like 2850.

TIMING
While my tweet from 6/19 calling for sideways or down 6/26-8/10 in IWM and momentum names was timely with a 6/20 top, it is looking like I misjudged this year's rare cycle combo.

July dates
7/3 - Stock index pullback low
7/10-11
7/25

Bonds and XLF

XLF has been down 5 months in a row. And yet long term support continues to hold. For most of the year that was at the 1HP. After dropping lower at the end of June there were buyers at the YP. While I think better to position in strength (currently IWM & XBI, then QQQ & SPY, then think about other things) right now this is set for a bounce.

The 2-10 yield curve has been getting a lot of chatter recently, and under 30 bps it probably should. 

On 5/20 I posted 'bond bounce' due to several factors, including the near tag of YS2 on the ZB continuous contract. But now it looks like it is about to go the other way - YS1 tag and HP resistance. TLT should drop back down. This will alleviate yield curve concern and XLF will get a bounce. 

ZB1 cont contract

VIX and VXX

Regular readers know that I especially like setups with VIX & VXX confirmation. These are making it even more clear that Q3 is starting with a very bullish move for stocks. 

VIX
D: Day 1, massive QP rejection and YR break. Day 3, YR1 resistance and below MP. Day 4, MP rejection and back under D200MA. We could easily see YP JunS1 area test and if lower then I'd start thinking 9.4-10.

VXX
D: Day 1, HP rejection; D3 below D200MA; D4, MP rejection and back under all pivots. Should see 32 minimum. Note early April began with YP rejection and this helped confirm the stock rally.

USA main indexes

Sum
Last week numerous long term support levels (pivots and MAs) held, and 3 of 5 USA mains finished the week strong above all pivots. This is bullish as most indexes aren't yet at resistance levels or Bollinger bands yet, and even RSIs on 2H charts are not yet overbought. Path of least resistance is higher.

Whether IWM, QQQ and SPY go for higher level targets sooner or later depends on DIA and NYA 2HP. In other words, it would be a lot more bullish if all 5 USA mains were above all pivots instead of just 3 of 5.  

Upside limited scenario would be IWM topping at YR1, and then SPY and QQQ topping on JulR1s, as we see DIA 2HP rejection. This could certainly happen as it is summertime and a lot of global concerns with trade war etc. But if we think in terms of definitive move beginning near quarter change, then we should at least consider the bullish surprise scenario which means targets of IWM QR1+ 173 (above YR1), QQQ QR1-YR2 area 181-184, and SPY back to test YR1 282.

SPX / SPY / ES
SPX W: Back above all rising MAs, not overbought - room to go up. 
SPX W: Arrow at 2HP - just had huge hold of long term support. Next major resistance is the YR1 at 2830.
SPY D: Easier to see what just held - near test of Q3P, 2HP exact, then MP (arrow) was resistance for 1 day then back to level then launch. 
ES D: Definitive move seems to be 6/28+ hold of major support. Note MACD not even positive yet so barring immediate reversal this suggests early in the move should the blue line cross positive. 
SPY 2H: 2H RSI not even OB (70+) yet. 
SPX sum: Just had huge hold of 2HP and quickly back above all pivots and MAs on both daily and weekly charts. Room to go higher as resistance on pivots, Bollinger bands and overbought RSI not even close. Near term first target JulR1, but bigger picture target has to be YR1 at 2830 as long as above the 2HP at 2707.

NDX / QQQ
NDX W: Although more volatility in 2018 this is still a phenomenal trend not even tagging the W50MA on this year's pullbacks. W10 just held.
NDX W: YR1 turned into support opening door to see HR1 / YR2. 
QQQ D: JulR1 already within reach, then next level of targets 181+.
QQQ 2H: Friday open move was back above all pivots and zoom from there. 
NDX sum: No rebalancing going on here - already back to highs. Above YR1 points to HR1 / YR2 area near 7500.

DJI / DIA
DJI W: Still above rising W50MA = bull market. 
DJI W: However, below 2HP - first long term weakness since early 2016, and first demotion since 12/2015
DIA D: D200MA and QP holding, but resistance at JulP and then 2HP. Above that would help the higher targets on the other indexes.

RUT / IWM
RUT W: Held W10MA.
RUT W: Zoomed back to YR2. 
IWM D: Already at JunR1 with YR2 just above. 
RUT sum: Pivotal main index leader, back above all pivots on 7/5 before the big launch in other indexes. Test of highs likely at minimum.

NYA
W: Saving bull market, above rising W50MA. 
W: Rallying to 2HP. Since less traded, this index more likely to break and recover than others. Still, often a good tell.
D: Held QP then back above MP and now back above rising D200MA. 

Total market view

REVIEW
6/24/2018 Total market view: "It is hard for me to imagine a pure bullish scenario for risk with VIX perking up above its YP, TLT above its MP and toppy looking bars on the leaders. A pure bearish scenario would be risk off with VIX and TLT leading, international names breaking down, and IWM & QQQ fading off highs. But perhaps what I think is most likely is a reversal sort of week - a bounce on DIA and international names, IWM and QQQ moving lower."

Result - bearish scenario won out with IWM and QQQ leading on decline, with international names breaking down.

SUM
As I have said many times on this site, often definitive moves begin near the beginnings or ends of quarters. I can point to examples for most quarters in recent years, but if you want an easy one go no further than the low of Q2 on the very first trading day.

So what are the signs of the next move?

First, DXY has so far topped on near tag of YP. If DXY lower from here, then international names may bounce further in any catch up move. If risk off, then GLD should do well although far from any major pivot level that would make it an attractive buy. That said, DXY set to open above HP, QP and MP so if DXY weakness theme is real we will soon see DXY below another pivot.

On the indexes I track, only USO is set to open above all pivots (any re-entry longs were already triggered). XLE is fractionally below its MP so if that can also reclaim above all pivots that looks good. 

IWM, QQQ and SPY (barring a big gap) are set to open above YP, HP and QP but below MP. There is a fairly big cluster of support on SPY just below - so even if first move is down, dropping onto major support could be a buying opportunity. If the market gaps higher and/or rallies on Monday, then we'll see at least one of these back above all pivots and we'll have an easy answer.

There are several positions one could be holding here, but if not shorting then you'll probably have a lot more cash as the Q2 longs were encouraged to take profits. 

If long TLT - which is set to open above HP, QP and MP - also helpful to have a decent move above its total return YP at 121.83 as shown below. 

With a lot of indexes in mixed condition we will get a clear answer soon enough. 

Bottom line - many long term charts seem to be in a topping process. They could recover and move back towards highs, go sideways for many more months, or break down. I'm kind of thinking the sideways move will be more likely, with exception of USO and XLE. However, it is notable that several key indexes - DIA, NYA, XLF, SMH, ACWI, EEM, FXI - are set to open below HPs (or YPs in the case of the latter two). Dow and financials and semi-conductors below major support with TLT strong? Yes it is true - not the time to be complacent. 

PIVOTS
New HP QP and MPs start 7/2. Quick rundown of USA mains, sectors and international names below.

USA mains

DXY and international indexes

OTHER TECHNICALS
Several quarterly and monthly charts showing divergences, which is often the prelude to more serious declines.

VALUATION
SPX forward P/E just under 17X.

SENTIMENT
Put-call rapidly moving up from recent low levels of 2 weeks ago.

TIMING
If interested in this part of my work then here's a recent dedicated blog post on the subject. According to what I have tweeted recently, I expect further reversal in leaders and potential haywire risk off move in the next several weeks.

June dates
6/2 mild - non event
6/5 esp for currency - 6/6 EEM high otherwise not much)
6/13-14 strong - SPY price high 6/13 although admittedly this was a bit tough to read
6/20-21 strong - now we are talking with IWM, QQQ, DXY turns and possible GLD turn all here.
6/26 - spike low

July dates
7/3
7/10-11
7/25

DXY and international indexes

Sum
International indexes took a bit hit in Q2 as DXY strengthened. This was frequently very much a currency move as nearly all the stock indexes look better than their US ETF versions. 

DXY top near YP 'could be' it for the year. But if that is true then we'll likely see DXY drop under its MP soon - for now still above HP QP and MP.

SHComp dropped all the way to YS2; holding this level would increase the chance of recovery of YP on FXI and EEM. 

INDA has tested its YP a few times this year and benchmark indexes Nifty and Sensex are just off the highs; I think this is my favorite setup and long. Regarding the others, if you took EWZ, EEM or FXI shorts then you are looking good with booked gains or holding below pivots especially the YPs on the latter two. 

DXY
Q:  Big bounce after being down for more than a year; now at 10MA resistance.
M: Congestion between rising 50MA and falling 10MA. 

Set to open below YP with recent rejection, but above HP, QP and MP.

ACWI
M: Benchmark index also below 10MA for the first time since 2015 correction.

SHComp
W: Weak below all pivots, at YS2. If this holds would help EEM and FXI to rally.

FXI
M: Already at 20MA. 

Set to open below all pivots. 

EEM
M: Also testing rising 20MA.

Set to open under all pivots. 
 

KWEB
M: Even KWEB below 10MA.

Also set to open below all pivots except YP.

INDA
W: YP defended. Any further weakness in DXY and/or risk on will help this to rally. One of the more attractive setups long above the YP.

RSX
W: Benefiting from oil rally, but instead of this would rather be in USO or XLE.

EWZ
W: Sad EWZ went from 2018 leader to biggest loser. You just never know when a YP break is going to get serious. 

Bovespa shows how much of the move was currency impact and also gives hope for bounce in EWZ with hold of YP.

USA mains and sectors

Instead of detail on USA mains and sectors, with all the pivots shifting over, I'm going to post long term charts and the projected pivot status. A gap up or down could change things though. 

The larger message is that indexes are mixed, with DIA and NYA glaringly weak amoung the USA mains. No pure leader with both IWM and QQQ set to open below MPs. 

In sectors a surprise turn - SMH set to open below HP, QP and MP, the first move below a HP in many months - the last time this occurred was the start of the -20% drop into Feb 2016 lows (although many other indexes also experiencing long term weakness as well). This is happening as XLE just fractionally below MP and any higher will be above all pivots, once of the few stock indexes I track to even be close to that status. 

SPX / SPY
SPX Q: Divergences building. 2017Q4 high and close outside BB; 2018Q1 high well outside BB and close within; 2018Q2 high and close inside BB. 
SPX M: Holding 10MA for 5 bars but glaring divergence on RSI.

SPY set to open above YP, HP and QP; below MP.
 

NDX
Q: Still high and close outside BB. Might smart money be selling up here with Q RSI approaching 90? 1929 DJI Q RSI top 91 FWIW. Only the 90s had higher on NDX, 98Q4 to 00Q1.
Q: 18 year 1.618!
M: Textbook BB divergence top - Jan high and close outside BB, Mar high outside but close inside, June top high and close inside BB. Uptrends slow before reversing. This is what we are seeing now, as reflected in RSI peak at 85 and June close now at 77.5.

QQQ set to open above YP, HP and QP; below MP.

DJI
Q: After 6 consecutive closes outside the BB (even the Q2 down bar), a close clearly inside the BB. This may or may not be the absolute bull market high but it sure invites selling as the next move - see 1998 Q2. 
M: RSI divergence! But somehow still holding to M10MA.

DJI set to open above YP, but below HP, QP and MP. Weak!

NYA
Q: BB and RSI divergence.
M: 2 consecutive closes under the 10MA, and highlighting the 10MA here. Nice smooth runs when above; close below is sideways chop at best like 1998, deeper pullback in struggling uptrend like 2010-2011 and 2014-15, or worse like 2000-02 and 2007-09. But smooth uptrend phase - while it potentially could recover - is now over. 

Set to open above YP, but below HP QP and MP (like DIA).

SECTORS
SOX
Q: 3 bars near but not closing above the 2000 top!
M: Still above rising 10MA - interesting level to watch.

SMH set to open below HP QP and MP! Seems hard to believe after such a run but true. This would be the first move below a HP in SMH since 12/2015 which preceded the ~-20% decline to Feb 2016 lows. 

XBI
Q: BB and RSI divergence top. 

Set to open above YP HP and QP; below MP.

XLF
Q: Stopped at the 2007 high close bar and didn't even reach the 2007 top. 
M: 2 bars below the 10MA. Might bounce from 20MA though. 

Set to open above YP, but below HP, QP and MP.

XLE
Q: Close above 20MA for the first time since oil crash of 2014-15. This chart could see top of bB again near 95. 
M: Seems stuck near the 50% but above all MAs and RSI not near OB.

Set to open above YP, HP and QP; fractionally below MP.

Total market view

REVIEW
6/17/2018 Total market view: "Bottom line - If markets go higher it is likely the leaders will have another push up to reach IWM HR2 / YR2 area and QQQ JunR2. If lower then likely international names leading down, and one could have already have a partial short position on anything below Q2Ps. Until VIX & VXX confirm trouble the bull trend of risk on gets benefit of the doubt. At the same time the combination of crazy momentum on IWM, quarter end r-ebalancing soon in play, frothy sentiment and the HR2 / YR2 combo make this an ideal area for a decent reversal." [bold added]

Rather nailed that with 6/20 top just a bit above YR2, and then a quick slam the next 2 days. NDX topped on JunR2 near exact (QQQ version a bit shy, NQ futs exact tag).

SUM
While I pay attention to all levels, when indexes are near yearly pivots, support or resistance then these typically become my focus. Last week IWM topped on YR2 in a similar manner to CL1 (oil continuous contract) earlier this year. We might not see the same percentage drop but so far it has been the right move to take gains near that level and reassess or even take a speculative short.

Yearly levels don't always generate major turns but here is a partial list this year:

DIA high of year (1/26) on YR1, along with many other risk asset highs on YR1s that week
SPY low of year (2/9) on YP exact
BTCUSD key lower highs 2/20 and 3/5 testing YP from underneath (since then down ~50%)
ZB1 (continuous contract) low of year 5/18 on YS2
XLE high of year (5/21-22) on YR1 exact, along with CL1 (continuous contract) YR2
SMH 2nd high of year 6/6-7) on YR1 exact
IWM high of year (6/20) on YR2
DXY high of year YP (6/21) near tag
EEM low (?) on YP 6/21 exact

I think you are getting the point now. This means we may have just seen a major IWM high along with a DXY high. Interestingly GLD dropped just a bit under its YP but could easily recover with any more higher.

This week ends 1H and Q2 and June so soon all the pivots except yearlies will be changing over. It is often good to have cash ready for the next best looking setup. It is also time where we can see institutional re-balancing which typically trims winners and adds back to losers - this would put pressure on IWM and QQQ, and potentially support international names and bonds. As it turns out IWM and QQQ weekly charts look quite toppy, and if DXY drops further from its YP then emerging names (EEM, FXI, RSX, INDA) could get more a bounce. Note - all 4 of these had tag or near tag of YP last week and close above. 

It is hard for me to imagine a pure bullish scenario for risk with VIX perking up above its YP, TLT above its MP and toppy looking bars on the leaders. A pure bearish scenario would be risk off with VIX and TLT leading, international names breaking down, and IWM & QQQ fading off highs. But perhaps what I think is most likely is a reversal sort of week - a bounce on DIA and international names, IWM and QQQ moving lower. 

In this system trend trades are my focus, especially what is moving up. In Q2 this meant huge overweight on IWM (read the USA main index post for more detail on this), and then tech names and regional banks. If you were looking to short in Q2 then anything below QPs as other indexes were above all pivots were the candidates and there were several of those. Although the absolute best shorts this year were below all pivots and not just a QP - first bonds in Q1, the BTCUSD and EWZ in Q2.

Occasionally a "surprise" trend change is worth playing like XLE moving above all pivots on 4/11 after being below all pivots just a few days before. These can be tricky because sometimes surprises fade and a quick poke above all pivots remains just that with a fast drop back below (DBA good example this year).

Lastly, once in a great while, I will mention a purely speculative move (short above all pivots at major resistance, long below all pivots at major support) - recently, TLT buy mentioned 5/20, SMH short 6/7, and IWM short last week. 

In terms of new trends, we have the pending 2HP, Q3P and July pivots to consider. There is something interesting going on with TLT and XLF. TLT has been quietly stabilizing since the fast rally off the HS2 low on 5/17. In June YS1 was bought, and it has essentially held its MP since reclaiming on 6/14. At the same time, XLF is glaringly weak. It failed at the Q2P several times, and finished last week under its MP and D200MA! A weekly close at the same price would put XLF below 2HP, Q3P and JulyP. 

Bottom line - If pure bullish scenario next week, then I may miss out on QQQ and IWM bounce gains but I don't think these will be very much. And one can always hop on SPY to add long exposure though it hasn't done much this year. If international names rally then it will be time to scram from any remaining shorts (and if taken against QQQ and IWM longs, one could be out of those already if long side reduced). If the mixed scenario above I'll be watching for deep pocket buying in names like EEM, FXI, KWEB, INDA. If risk off, then GLD could start looking good with a move above its YP.  

PIVOTS
USA main indexes - Another key high near a yearly level on IWM last week. As called! 

Sectors of note - XLF trending weak. XBI took lead on SMH with SMH having YR1 rejection as XBI not much damange then clear.

Developed - Still weak despite DXY fade. EWG below all pivots! 

Emerging - Several YPs in play: EEM YP low exact, FXI YP near tag, SHComp YS2 low, INDA held YP higher low 6/19. RSX also benefited from USO bounce and recovered YP as well. 

Safe havens - VIX above YP some warning for stocks. But could not move above MP last week. TLT quietly strengthening. If GLD joins VIX above its YP then this would point to further risk off move for stocks.

Commodities - USO still fairly strong, with simple pullback to JunS1 and then an explosion higher on Friday to move back above all pivots. 

Currency - DXY YP exact on the high. 

Cryptos - Seems like BTCUSD heading to 3-4K as I have mentioned on this site several times. This is even more likely now with ETHUSD having a 2nd rejection from its YP just last week.

OTHER TECHNICALS
Noticing screaming RSIs across timeframes was part of take gains on IWM last week. That said now lows remain rather dormant and until we see uptick then we have to give bull scenario in stocks some weight.

VALUATION
SPX seeming to have resistance at 17X (green) recently after 18X (orange) earlier in the year, and near 20X (red) on the January blowoff top. 

Sentiment
Equity put-call reaching very low areas near where it was in January. All issue (including index) put-call not that different. 

Timing
If interested in this part of my work then here's a recent dedicated blog post on the subject. According to what I have tweeted recently, I expect further reversal in leaders and potential haywire risk off move in the next several weeks.

June dates
6/2 mild - non event
6/5 esp for currency - 6/6 EEM high otherwise not much)
6/13-14 strong - SPY price high 6/13 although admittedly this was a bit tough to read
6/20-21 strong - now we are talking with IWM, QQQ, DXY turns and possible GLD turn all here.
6/26 - TBD

July dates
7/4
7/10
7/25

USA main indexes

Sum
Among these 5 main indexes, IWM was the clear leader in Q2. It was the first to recover above all pivots in early April, then remained above all pivots with exception of fractional break on 4/30. This happened as all the other main indexes were below Q2Ps, a glaring divergence. Focusing on this paid off with a ~10%+ rally off the early May lows, far outpacing the others. In fact, after launching back above all pivots on 5/4 there was only 1 trading day below a WP, and was again the last day of the month. 

But last week IWM ran into YR2 and got smacked. The most recent Total market view emphatically emphasized that the YR2 / HR2 area was probably good to take profits. There were several reasons for this judgment - major resistance levels, how they have reacted this year compared to last year, RSIs across timeframes, sentiment, and lack of larger participation of other indexes in the rally (only QQQ had made a new high for 2018 in June).

I'm typing up more detail on this today because this move is what The Pivotal Perspective is all about. We focus on strength technical strength - first above pivots, what is holding when others are breaking. This often (not always but often enough if you are comparing risk assets to risk assets and not just risk to defensive names) is the next leader. Then we want to hold, especially above nicely rising daily MAs and/or weekly pivots. Take profits or hedge at major resistance or when there are multiple signs of likely exhaustion. Now we can consider re-entry or try to spot the larger theme for Q3. 

The leaders, IWM and QQQ, look most vulnerable to a drop. SPY which has been middling seems like it could go either way. DIA and NYA have been beaten up, but there is a case for a bounce though they are technically weaker below Q2Ps. Q2 was no exception with the low on all 5 USA main indexes on 4/2, the first trading day of the quarter. 

I have said many times on this site that end/beginning of quarters are great times to be watching for the next larger move. I think it is good to have already raised cash. A pure bullish scenario would be a bounce back on all 5 USA mains with DIA and NYA back above Q2Ps with IWM and QQQ moving back to highs. This seems unlikely to happen. A pure bearish scenario could occur if IWM and QQQ move lower, and DIA stays under its Q2P. This seems a bit more likely to me. But perhaps most likely seems like a mean reversion with winners getting sold and losers continuing bounce. 

SPX / SPY / ES
SPX W: This doesn't look too threatening; could be normal pause.
SPX W: But below HR1 looks a bit more serious, especially with high of year on HR2.
SPY D: SPY also showing resistance on HR1. 
ES D: MACD almost turning negative, with 10MA already resistance and D20 turning into resistance on Friday.  
SPY 2H: Weakening - under WP all last week. 
SPX sum: Pause at HR1, with ES daily chart looking a bit weaker. 

NDX / QQQ
NDX M: 2000H / 2002L 161% = 7305 pretty close so far.
NDX W: Doji bar with perfect BB divergence after multi week run up suggests next move down.
NDX D: High near JunR2; so far holding above March highs; below that could more threatening.
NQ U: But this still looks stronger, just a simple pullback to a rising 20MA.
NDX sum: Potential for a decent top there on interesting monthly 161% extension, doji bar, and JunR2 - but we'll see how far it drops or if rising 20MA bounces again. 

DJI / DIA
DJI W: For all the news last week about 9 days down this doesn't look that bad - far less damage then 2 other 2 week declines this year. Attempt to clear W20MA didn't last.
DIA D: Under QP the last 4 trading days. 
DIA sum: Under QP is bearish.  

RUT / IWM
RUT W: Inviting sellers. 
RUT W: YR2 stopped the move as expected.
IWM D: 1 day mistake above YR2 then wham. 
IWM 2H: Above WP all days except 5/29 since 5/4. Amazing run, but expect to see below WP next week.
RUT sum: Doji bar at YR2 with RSIs at historical extremes just 2 days ago, in a crowded trade, with quarter end profit taking and re-balancing approaching. This should go lower.

NYA
W: Still above a rising W50MA. So, still a bull market. 
W: Still above YP and HP - still a bull market. 
D: Below QP 5 days but strong rebound from MP and back above D200MA.
NYA sum: Below QP and back down to D200MA area which has been a battleground several times this year. Long term trends still intact for now.

Notes on some timing calls

I used to do quite a lot of work on timing the market. This landed me a gig at a hedge fund where for one year at least, percentage return was among the top in the world (triple digits running over 100M). Alas due to a host of other issues the fund closed and I have moved on to something else. Some of my methods are rather eclectic to say the least, and despite performing a truly top tier level another door hasn't opened so to speak. 

Real accuracy takes a lot of research and monitoring and I just don't have the time for this full project these days. However I do take a stab stronger timing dates for turns in each Total market view, and some of these have been remarkably correct. Here's a pretty nifty month from August 2017 when 6 of 7 dates listed were key turns, including the low and high for the month and the second low and second high. Oh yeah all timing dates posted at the end of the month prior - and no fudging.

Sometimes my timing work is in the background of a call without specifically mentioning it - for example, this post calling for a bond bounce on 5/20 (1 day off the low of year for TLT and the one first post on bonds all year) mentioned timing in an offhand way with technicals emphasized. But maybe it is the timing that is calling my attention enough to the technicals to write about them. :)

Very occasionally I have taken to twitter on these and that is what I am going to review in this post, my timestamped timing calls. 

9/1/17
Oil via USO and CL1 (cont contract) doesn't have much going for it technically except recovery of slightly rising daily 50 moving avg
And a maybe higher low compared to June lows. Timing cycles, for the record, point to upside surprise from here through as late as 10/22

Rating - 7 (out of 10).
Oil did start jumping from relative low levels. The only thing off here was that the rally was far from over, and you could say out-performance continued into early November. I might have revisited that in a Total market view, but I didn't tweet into the thread.

10/21/2017
Next specific timing call: Rates via $TYX and $TNX more potential to breakout up, ie $TLT breakdown, 10/19-11/14.

Rating - 3.5.
Initially this looked on track with a new multi-month low on 10/26, but after that TLT bounced back to a multi-week high by 11/7. But jeez this was spot on for LQD and HYG, with LQD dropping down after a 10/13 high to a multi-month low right on schedule on 11/10; and HYG playing along with a 10/23 high and very sharp drop into 11/14-15 lows. Right idea bout rates moving, just wrong vehicles. This is what I mean by what it takes for real accuracy - sometimes I can get a theme right but in this game that isn't enough - you have to have the right vehicle. 

1/24/2018
Special timing post: volatility cycles picking up 1/25-2/2 maybe through 2/15. This does not mean i am saying stocks down from here. There are a lot of YR1s to watch though. Yup back in UVXY already.

2/6/2018
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.

Rating - 11
Honestly - does it get any better than these two? Nailed the volatility spike and then what stands as price low of the year in most major indexes. Hello hedge funds? I have made this sort of call many times. Just based on these two alone one would think some funds might be watching or at least interested in my methods, but if they are I haven't heard about it. 

5/14/2018
Special timing post: whatever move begins 5/15-16 could dominate markets through mid-June at least and possibly later. Prefer stocks to fade and begin multi week decline, but this timing cycle historically does more damage in existing downtrends.

Rating - 6.5
This wasn't too bad actually. The historical pattern repeated and I should have just kept to that. instead of thinking stock drop. Several risk assets in existing downtrends on 5/14 actually did go quite lower into mid-June: 

BTCUSD 5/13/18 close 8683, 6/12 low 6436, -26%
EWZ 5/11/18 close 40.94, 6/7 low 31.28, -24%
SHComp 5/11 close 3163, 6/18 low 2871, -9%
These three were below D200MA, and in case of BTC and SCHomp, already below YP as well. 

EEM 5/11 close 47.40, 6/19 low 43.41, -8% (still above D200 but below D100 and a sharply falling D50)

Didn't start as severe a downtrend but still lower highs and moved below Q2Ps
FXI 5/11 close 48.16, 6/19 low 45.78, -5%
EWG 33.15 to 30.51, -8%
There are several others like this with garden variety -5% pullbacks.

And let's not forget TLT low of year on 5/17/2018! So that counts as "change of character" that I mentioned in a Total market view for this 5/15-16 area. 

So what is next? Momentum trades, so that means small caps and FAANG most of all, should take a hit or go sideways at most starting 6/26 for the next few weeks at least and possibly through 8/10. Additionally, in this timing window there is also some chance of a wildcard haywire event that could be quite severe like summer 2011. And these are going on Twitter too.

Total market view

REVIEW
6/3/2018 Total market view: "Bottom line - Easier money usually made by long strength and avoid/short weakness. After small caps (IWM and KRE) led in May, in the last few days all tech indexes - QQQ, SOX, XBI and KWEB - have been on fire. If market plays out bullish, tech likely to make new highs. If bearish, the international names likely to drop. At some point we may see an institutional rebalancing move, but these typically take place in the latter 2 weeks of June and not in the beginning of the month."

Result - IWM and the tech names higher in June; several international names lower that 6/1 (SHComp, EEM, FXI, INDA, EWZ and RSX). 

SUM
All 5 USA main indexes are above long and medium term pivots, but there is notable difference between leaders IWM and QQQ (both well above YR1); SPX in middle zone doing fine but not yet back to YR1; and then the more international influenced DIA and NYA which remain relatively weak. 

Sectors are similarly mixed, with SMH and XBI just off recent highs at YR1 and HR1 respectively, yet XLF unable to clear QP. 

EFA, EWG and EWJ all below QPs as well. And then in the emerging indexes that I track, only only China tech KWEB has joined the party in June. 

As mentioned above, it has been a great strategy to focus on the technical leaders and avoid the laggards. But heading into the last 2 weeks of Q2 there is more chance of an institutional rebalancing move which would pressure the leaders and could help a bounce on the losers (which could mean bonds as well as international stocks).

Momentum on IWM using RSI and BB across timeframes is at a fever pitch, so all the more reason to be locking in gains near the HR2 / YR2 combo (one more push up would do it). This could potentially be a speculative short as well. I have already mentioned SMH in this regard, and so far YR1 remains the top.

Yet the reason to still be decently long here is VIX, closing below its YP and thus below all pivots for 5 of the last 8 of the last trading days. If there is any bear scenario for USA main indexes we should see VIX back above its YP. 

TLT reclaimed its MP last week after holding its YS1 for 5 consecutive trading days. That said, weekly chart seems to limit upside.

Metals perked up then got totally hammered the next day with DXY strength seeming to have a delayed reaction. GLD nearing its YP support (with GDX already below all pivots) could be level to watch for further breakdown.

Bottom line - If markets go higher it is likely the leaders will have another push up to reach IWM HR2 / YR2 area and QQQ JunR2. If lower then likely international names leading down, and one could have already have a partial short position on anything below Q2Ps. Until VIX & VXX confirm trouble the bull trend of risk on gets benefit of the doubt. At the same time the combination of crazy momentum on IWM, quarter end r-ebalancing soon in play, frothy sentiment and the HR2 / YR2 combo make this an ideal area for a decent reversal. 

PIVOTS
USA main indexes - For this week SPX / SPY HR1 to watch. Bullish above, weaker below. 

Sectors - I mentioned SMH as long early May, then said hold above Q2P; so far YR1 is the top. XBI has been a bit stronger, currently above YR1 but slightly under HR1.

Developed - DAX well above all pivots, EWG not; N225 the same with EWJ. Issue is DXY strength.

Emerging - RSX joined EWZ below all pivots last week. Several of these names at areas of weekly Bollinger bands / 50MA that would bounce if typipcal correction territory. As EWZ showed this is not guaranteed to happen. 

Volatility - VIX below all pivots; no problems for market until that perks up.

Bonds - TLT strength and XLF weakness both point to upside limited for leaders as players more inclined to take gains off the table if the next move is risk off. 

Metals - Any lower and all three metals ETFs will be below all pivots.

Currency - DXY massive move from HP low last week; seems like it should test YP.

Crypto - BTCUSD near major low area for the year and no real bounce. Testing JunS1 here, but first major support is 3000-3700.

OTHER TECHNICALS
Currently on RUT
Quarterly RSI at 79 higher than all bars than 3 in the late 90s. 
Monthly RSI at 75 higher than all bars except 10 bars since 1988. 
Weekly RSI not extreme but 2 bar close outside BB fairly rare, with RSI at 68.
Daily RSI has stayed overbought in June, a sign of strength, but making slightly lower highs.

This is what I mean by "crazy" momentum - this is a stretched move, speculators are record long the Russell. There is a lot setting up for a reversal here. Have I been clear enough on this point?

VALUATION
SPX forward P/E under 17. Implied valuations rising nicely due to increased earnings. SPX could reach 3000 area and be less expensive than the January top.

SENTIMENT
Equity only pull call near lows of the year. Those calls likely on popular tech stocks and small cap names.  
 

TIMING
April dates
4/2 - USA main index low, date listed per 3/18 Total market view
4/13 (mild)
4/18 - so far stock high
4/23 - 4/24 close low, 4/25 price low slight miss

Why do I quietly persist in this timing project? Because of 4 dates listed for April (from the end of March!) 

• one was the low of the month across the board for USA stock indexes, and same date TLT high
• the date listed as mild was mostly non event, perhaps a small pullback low on SPY and other stocks
• 4/18 was the high of the month for stocks
• 4/23 slight miss, 4/24 close low 2 weeks with 4/25 slightly lower lows

Not bad eh? 

May dates
5/6 (could be 5/4 session or 5/6 globex)
5/11 for currencies esp - DXY pullback low 5/10-11
5/15-16 area looks important change of character -5/17 TLT low of year

June dates
6/2 mild - non event
6/5 esp for currency - 6/6 EEM high otherwise not much)
6/13-14 strong - tough to read with a few stock tops but not much bearish on 6/15 and could have been pullback low on 6/15 (+1)
6/20-21 strong
6/26

7/4
7/10
7/25

USA main indexes

Sum
Leaderboard pretty clear - QQQ and IWM, with QQQ at a new price and close high on 6/14, and IWM price high 6/12 with close high 6/15. In terms of momentum these are both reaching late 90s levels and if time permits I'll try to do more on that this weekend. QQQ has soared above all major resistance with only JunR2 the next level; but not so for IWM, with HR2 YR2 area overhead a great area to take profits from early May longs and perhaps try speculative shorts.

SPX in the middle, but for now bullish holding above HR1. 

DIA and then NYA bringing up the rear with totally different action; well off January 2018 highs, with NYA back testing its Q2P.

Long / overweight IWM and QQQ and avoiding DIA has been great way to play the USA mains in Q2.

SPX / SPY / ES
SPX W: Upper BB would seem to be capping upside here.
SPX W: But so far above HR1 which is positive; could reach YR1. If back under HR1 would look more bearish.
SPY D: SPY Ex-dividend move, but still above HR1 slightly.
ES U D: I don't like that rollover contracts with the 'wrong' yearly levels are still in play, but they are. 
SPY 2H: Only a few 2 hours bars below weekly pivots since May 7.
SPX set sum: Upside seems to be limited although so far maintaining above HR1s means bulls keeping the ball. ES (U) YR1 also key level at 2790 to watch.

NDX / QQQ
NDX Q: If time permits I'll do a study on how far highs and closes outside the bands - this has got to be rivaling late 90s. 
NDX Q: Fib fans take note.
NDX W: Pushing the band.
NDX W: Blasted above YR1 and then through HR2.
QQQ D: 1 day bear wonder at March highs then hold HR2 QR1 as support and raced higher. 
QQQ 2H: Momentum could be slowing just a little but that's all to say - incredible run the last 6 weeks.
NDX sum: Along with IWM the main index leader. Above earlier March 2018 highs, held above YR2 and QR1. Next pivot resistance is JunR2. Tech is going crazy compared to the other USA indexes but beware quarter end re-balancing which in Q2 often begins now, before the 7/4 holiday, as opposed to Q4/Q1 which begins after the winter break. 
 

DJI  / DIA
DJI W: Sharply falling upper BB 'should be' resistance.
DJI W: Bewteen long term levels (SPX testing that HR1 in comparison, and NDX above HR2!)
DIA D: Above all pivots; fell back under JunR1. 
DIA sum: Obviously lagging. 

RUT / IWM
RUT Q: Might be the furthest outside the Q BB ever. Only 1997 Q3 looks like it could compare. 
RUT W: 2 consecutive closes outside the BB is rare and often near trading tops. 
RUT W: YR2 HR2 looking good to take gains and perhaps short. 
IWM D: What a run above a rising 10MA every day but sonce since 5/4. Still I think YR2 stops the move. 
RUT sum: Paying attention to leadership in April and May gave overweight to IWM. But now I think time to be locking in gains near HR2 / YR2 and could be speculative short. 

NYA
W: Looks more like DJI.
D: 2 days above JunR1 and then that was it; back to QP. 

Total market view - delay this week

Due to weekend travel, the regular Total market view post will be delayed or simply omitted for this week. 

Total market view

REVIEW
5/27/2018 Total market view "Bottom line - I still think it is time to watch to lock in stock gains and will do so when the market tips its hand with a DIA QP break, QQQ YR1 rejection and VIX/VXX confirmation. Until then perhaps the bulls will surprise me with a push to higher levels."

In the last 2 weeks, it was correct to lock in gains on USO/XLE, but not so much for IWM, QQQ, SOX or XBI.

SUM
In May I have been stressing the yearly levels in play - IWM YR1, QQQ YR1 and VIX YP. First IWM cleared its YR1 and then it held on a test. Last last week QQQ finally blasted through its YR1 after sitting under it since 5/10. But VIX is still above its YP, and really tech is the outlier in terms of strength as most other indexes, especially international, haven't had the same move.   

Either tech strength will lead to a bullish resolution with DIA recovering its QP, or DIA and other international indexes will drag others lower. 

Let's just point out the Pivotal Momentum basics - stock indexes to stay above QP or recover above it first:

USO 2nd time above QP 4/9 from there huge out-performance until 5/22 continuous contract YR2 top
IWM 2nd time above QP 4/10 and above from there; led USA mains through 5/30
XLE recovered above all pivots including QP 4/11
KRE 2nd time above QP 4/23, from there up to 5/22
QQQ 3rd time above QP 5/4

Others that cleared QP later, although I did go out of the way to recommend SOX as it recovered above its MP on 5/4 (mentioned in 5/5) Total market view.

These have been the best longs. 

And what had bearish action from QPs?
EWZ, EEM, INDA, SHComp below QP entire Q2
FXI below QP except 1 trading day
RSX below QP except 2 trading days
KWEB below QP except 3 trading days
XLF below QP except 5 trading days
NYA below QP except 10 trading days
DIA below QP except 14 trading days

These have been avoid or short. 

I don't know the way the market will go, but we aren't seeing the coordinated strong trend of 2017. Therefore long/short strategy doing well, if you get on the right side of the trade.

In general DIA pivots do seem to be especially important for the larger market, so until DIA joins IWM, QQQ and SPY above all pivots I have to allow for the possibility of a bearish scenario. It just wouldn't take much more for DIA to clear its Q2P.

Bottom line - Easier money usually made by long strength and avoid/short weakness. After small caps (IWM and KRE) led in May, in the last few days all tech indexes - QQQ, SOX, XBI and KWEB - have been on fire. If market plays out bullish, tech likely to make new highs. If bearish, the international names likely to drop. At some point we may see an institutional rebalancing move, but these typically take place in the latter 2 weeks of June and not in the beginning of the month.

PIVOTS
USA main indexes - QQQ blasted through YR1 resistance but DIA unable to reclaim QP.

Sectors - SOX and XBI powering up. XLF not so much.

Developed - Some trouble in Germany.

Emerging - Most names weak for much of Q2.

Safe havens - TLT hanging on by a thread. 

Commodity - USO topped as CL continuous contract ran into its YR2.

Currency - DXY above JunP; still gets benefit of doubt on long side which pressures DIA and other international names.

Crypto - ETHUSD 1 day break and then recovery of YP; but still under MP and QP. Reclaiming JunP would really help the rally case. BTCUSD also below JuneP. Personally I think these are going lower.

OTHER TECHNICALS
There are only 10 times when the 10 period average of weekly new highs resumed above the 10 avg of new lows. All these are shown in green arrows below. 4 of these 10 times had 2 in fairly quick succession. So far this decade these have haven't been bad times to fully recommit to the long side:

8/2010
12/2011
7/2012
11/2014
3/2016
5/2017
 

On another note - watching the Q Bollingers closely across the board.

VALUATION
Institutions were all over the drop in SPX valuations in March and April.

SENTIMENT
Put-call far from the lows of January. The only crowded long per COT is the Russell, which further suggests tech taking over leadership for June.

TIMING
April dates
4/2 - USA main index low, date listed per 3/18 Total market view
4/13 (mild)
4/18 - so far stock high
4/23 - 4/24 close low, 4/25 price low slight miss

Why do I quietly persist in this timing project? Because of 4 dates listed for April (from the end of March!) 

• one was the low of the month across the board for USA stock indexes, and same date TLT high
• the date listed as mild was mostly non event, perhaps a small pullback low on SPY and other stocks
• 4/18 was the high of the month for stocks
• 4/23 slight miss, 4/24 close low 2 weeks with 4/25 slightly lower lows

Not bad eh? 

May dates
5/6 (could be 5/4 session or 5/6 globex)
5/11 for currencies esp (DXY pullback low 5/10-11)
5/15-16 area looks important change of character (5/17 TLT low)

June dates
6/2 mild
6/5 esp for currency
6/13-14 strong
6/20-21 strong
6/26